Every two years, an organization called the National Center for Public Policy and Higher Education issues a lengthy report on college and university issues that draws tremendous media and public attention. This year was no different, with the New York Times and many other media organizations trumpeting NCPPHE’s contention that higher education is rapidly becoming unaffordable for all but the wealthiest Americans.

The finding is bunk.

For one thing, there are some basic methodological flaws. The report’s authors claim that they measure the true net cost of sending a student to school, after subtracting financial aid, but their statistic is goofy. It doesn’t factor in the value of educational tax credits and government-subsidized student loans. On the spending side, it includes the average total expenditure for housing and feeding a student. That sounds reasonable at first, until you consider that young men and women have to live and eat regardless of whether they attend college! The true net cost is the difference between the average living expenses of college students and similarly aged young people in the labor force. That’s a far smaller number. Plus, because there are no reported data on room-and-board costs for community college students, NCPPHE’s measure assumes that those costs are the same as for university students. Nonsense. University towns are a lot more expensive to live in than the average community with a two-year college, and large numbers of students in the latter situation live at home with their parents or other family members.

The bottom line is that a superior measure, from the College Board, estimates that in 2008-09, the true net tuition and fees at the average two-year college will be just $100. The true net tuition and fees at a public university will be $2,850. The net cost at a private university will be $14,930. None of these prices is even close to making up as sizable a percentage of family income as the NCPPHE warns about. As for living costs, there is no good measure of the true net, but using the gross expenditure in such analysis is grossly misleading, as it makes up the majority of the estimated public-college cost and a sizable percentage of the estimated private-college cost.

The second part with the whole endeavor is that, as my colleague George Leef observed over at Phi Beta Cons, it assumes that an unsustainable trend will be sustained. No, it won’t. If colleges price themselves out of the reach of virtually all their potential customers, what would happen to them? A little common sense would be welcome here, though of course we are talking about university people and their lobbyists.

There is a productivity problem in higher education — as in K-12 education and health care — in that it has proven difficult to invest in capital that boosts the output per hour of labor. That’s the old Baumol disease issue. The perverse incentives created by government finance play a role, as does the original conception of the good in question (presence in a classroom). Now, web-based distance learning promises to deliver real productivity gains, allowing professors to reach larger numbers of students at a lower cost. Changes in certification policies and public attitudes will, one can hope, exert competitive pressure on traditional campuses to deliver value in post-secondary education and training or (or, as would be fine with me, stick to a totally different mission of providing four years of immersion in the life of the mind, quite apart from any vocational application, at the student’s expense). Or else they’ll start a decline towards obsolescence.

Uh-oh. I think I just spotted the next bailout trend.