Visualizing the Higher Education Industry

The importance of higher education is hard to overstate. Going to college enables individuals to acquire the knowledge, skills, and abilities they can leverage to improve their economic prospects and their quality of life. These benefits extend beyond the individual to communities, as college graduates tend to be more civic-minded, and are more likely to volunteer, read newspapers, and participate in public life. The relatively higher salaries of college graduates can even stimulate the local economy.

But higher-education’s generally-lauded attributes mask the fact that colleges and universities also make up a huge, complex industry with multiple missions, constituencies, and agendas. Nationally, there are well over 7,000 postsecondary institutions. The sheer number of schools is beneficial, as it enables the US to provide critical access to increasingly-necessary higher education. These schools also employ nearly 3 million full time staff, who are responsible for everything from teaching classes and balancing the books, to hosting welcome week events and landscaping duties. These same schools spend nearly half a trillion dollars annually in their communities. This economic impact shows how colleges and universities have a far-reaching presence in their communities, extending beyond what we think of as traditional functions of improving the minds of the students they serve.

High employment and huge expenditures are complemented by a wide geographic reach: There are over 16 colleges in the average Congressional district, and there are no Congressional districts with fewer than four schools. By sector, these averages break down to about four public colleges and universities, eight for-profits, and four private nonprofits for every Congressional district. On average, schools in each district employ over 6,000 full time faculty, staff, and administrators and spend over a billion dollars on total operating costs. Combine these jobs and dollars with the pressing need for more Americans to get college educations, and you can see why colleges and universities are powerful constituents.

Explore the data above. The full tool is available on New America's website, Atlas

This power is well-recognized in Congress. Consider remarks Sen. Lamar Alexander (R-TN), the chairman of the powerful Senate Health, Education, Labor and Pensions Committee, made recently before a group of college presidents. The former Secretary of Education and Governor of Tennessee was talking about “regulatory relief” efforts in higher education that he hoped to pass in Congress:

“Sometimes university presidents come to Washington to meet with members of Congress. That’s the biggest waste of time I can think of....But almost every single senator who is on the committee that is going to deal with this is home every weekend, and the Senator from Tennessee, with all due respect, doesn’t really want to see the president of the University of Maryland. He would like to see the president of the University of Tennessee or of Vanderbilt or of Milligan College or Maryville College or Rhodes College. If five or six or eight of those [college] presidents say, “Senator Alexander, may we have a 30-minute appointment with you while you’re home next month?”, I’ll do it in a minute. So will every other senator. And you have the credibility to go to that member of Congress and say, “Will you please vote for this? Will you cosponsor the legislation? Will you support it? Will you encourage the president to sign it?” Odds are, if you do that they will. It’s about that simple.”

Campaign contributions probably spring to mind for most people when thinking about political influence. Aside from the for-profit sector, however, which spent over $4 million in campaign contributions in the 2012 cycle, this is not the primary way higher education exerts political influence. The sheer number of schools makes them a politically important constituency in their own right, and their impact is amplified by prolific and diverse lobbying activities. Education organizations have spent $39 million on lobbying so far in 2015, not an insignificant number, even when compared to some of the most notorious lobbying groups, such as pharmaceutical companies ($125 million) or oil and gas companies ($64 million).

Of education-related lobbying expenditures, the largest single spender was the Association of American Medical Colleges. DC-based associations like the AAMC play a huge role in shaping federal higher education policy, and their strength comes from representing thousands of institutions across the country -- who they can mobilize to lobby for or against particular legislative or regulatory policy. Colleges, universities, and higher education associations also spend considerable time addressing regulatory procedures, generating commentary on and pushing for or against proposed rules. The Sunlight Foundation has compiled comments submitted on behalf of different issues and proposals through it’s soon-to-be defunct docket wrench tool. Among organizations generating the most comments related to specific higher education regulations, for-profit schools take the top spot, followed closely by individual private nonprofit and public four year institutions.

Some of these efforts are not surprising and at least appear to align with the interests of students, such as lobbying to increase Pell grants for low-income students. While we typically think of the financial aid as providing benefits to students, most of these dollars are turned directly over to institutions, so it is in the schools’ interests to ensure that more dollars are flowing. But it may not be in the institutions’ interest, for example, for prospective students to know if the school does a poor job at graduating students or whether students who finish never earn enough to comfortably pay down their student loans. This is where colleges’ and students’ interests diverge and schools have the upper hand on Capitol Hill.

Altogether, these lobbying efforts have paid off. Overall, $135 billion dollars were funneled into the federal student aid program in fiscal year 2014. This includes $31 billion in Pell grants, and $102 billion in new federal student loans. These same schools also received $12.2 billion from the Post 9/11 G.I. Bill and other veterans benefits programs, $22 billion in tuition tax breaks, and additional funding awarded through research grants or other contracts. Very little is asked in return for these dollars. In all likelihood, many of these schools would be unable to operate without these federal revenue sources, further emphasizing the need for an active and well-organized industry effort to preserve these dollars.

The time, money, and influence of the higher education industry enable these actors to advance their own ideas through regulatory and legislative channels. While these goals are not always out of sync with the altruistic reputation the higher education community has cultivated, it should not be surprising that when the needs of students and colleges conflict, many schools are putting their own interests up front.

Authors:

Kim Dancy is a senior policy analyst with the Education Policy program at New America. She works with the higher education team, where she conducts original research and data analysis on higher education issues, including federal funding for education programs.

Amy Laitinen is director for higher education with the Education Policy program at New America. She previously served as a policy advisor on higher education at both the U.S. Department of Education and the White House.