Chart of the day: College Tuition is Out of Control
This is about a week old, but the comments are pretty telling. What do you think?
Originally posted by Posted by Brad Plumer
Earlier this week, the College Board released its data on the rising cost of college. The numbers were striking. In the past year alone, tuition for four-year public universities rose 8.3 percent for in-state students and 5.7 percent for out-of-state students. Some of those hikes are likely due to state budget cutbacks, but the same thing occurred with private colleges — a 4.5 percent tuition increase in the past year.
Those figures are stunning. But what’s especially mind-boggling is this chart from Matthew Philips over at Freakonomics. You’ve all heard about the high-octane rise in health care costs, right? Well, since 1978, college tuition and fees have been getting expensive at a much, much faster rate than even medical care:
So what gives? As far back as 1993, experts were observing that tuition was rising so fast because parents were willing to swallow the cost. More recently, a U.S. News & World Report story from 2009 argued that prices were ballooning at elite universities because they’re all in a bidding war for top faculty and better services for students. That competition for students has also forced schools to hand out bigger and bigger scholarships, raising the sticker price of education. Meanwhile, Ronald Ehrenberg, a labor economist at Cornell, has blamed “the shared system of governance between trustees, administrators, and faculty” at many private universities, which “guarantees that selective private institutions will be slow to react to cost pressures.” Whatever the reason, those tuition trends don’t seem to be slowing anytime soon.
Here are the comments:
10/31/2011 1:43 PM MDT
It is generally conceded that one factor in the escalating rise in health care costs has been the “third party payer” phenomenon, the fact that market dynamics don’t work well if someone else is paying the bill. In the case of college tuition is it possible that the same principle is at work, but in this case the third party payer is debt? It is a question worth exploring, at least.
10/30/2011 11:26 AM MDT
10/29/2011 10:04 AM MDT
When was the last time a university announced a layoff? That they were freezing their pensions, putting professors on furlough or cutting pay?
Have your kids bought a $200 textbook and had the college bookstore offer $10 at the end of the semester to buy it back? Have they had a professor who wrote that textbook and required them to buy it?
To say that costs are skyrocketing in large part because of declining state support is simply not true. The real reason why is that colleges are part of an oligopoly that can force people to pay whatever they want them to pay.
If you can’t afford it, they simply accept richer students from other countries, which is why our universities are becoming “international” and graduation rates for U.S. college students are plummeting.
10/30/2011 11:31 AM MDT
“To say that costs are skyrocketing in large part because of declining state support is simply not true.”
It’s partly true but just since the recession as states cut back their subsidies and schools respond with tuition increases. But over any longer term you are absolutely correct.
Want to really get mad at the way your money is being spent? Take a look at this…
10/28/2011 7:44 PM MDT
There is a reason that both college tuition and health care have the largest increases in costs. In both cases the recipients decide where they want to go but someone else pays the bills.
Colleges obtain prestige (and the administrators better pay) by having the most applicants thereby making them the most selective. Their goal is to make students happy to help attract future students, not to control costs (and unfortunately not really to educate the students best). The goal of making the school attractive to potential students also helps explains grade inflation. No one wants to keep paying for little Johnny’s education when he is getting D’s. No one speaks highly of a college they failed out of. Colleges also get prestige when their students get into graduate schools. High grades help that too.
Finally healthcare and education have in common that the recipients don’t really know the what actual cost is when they sign up. When you enroll, you know the cost for that semester only. After that you are a sitting duck. Are you going to pull little Susie away from her friends because the college raised the cost 8%?
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10/28/2011 2:13 PM MDT
What in the world are you trying to say?
10/28/2011 1:12 PM MDT
I had children in college from 1991 to 2007. Thankfully only 1 of them went on to grad school. In that time period college tuition rose to beat the band BUT a lot of it was because high schools were graduating students that couldn’t read, couldn’t write and couldn’t add. In 1991 is was safely assumed by any college that a high school graduate that wanted to continue on to college had received an education that prepared them for college. By 2003, colleges needed to test incoming students in math and English to determine if the student was in fact ready or if they needed classes to get them ready for a college curriculum. Add to that the number of students that are attending college because their parents are insisting on it so all they want to do is party which in turn increases the need for campus security. There is a lower motivation from a larger number of students who feel college is a right not a privilege which leads to huge array of expensive issues. The real difference between a public college and a private college is that private colleges can still turn unqualified students away or increase the tuition rates so they can offer qualified students scholarships. Public university systems are hard pressed to acknowledge that students from their own state are poorly educated in high schools in said state and do not have the legal means to offer scholarships to the extent of private systems. Every one of my children attended college with scholarship money and we looked for schools that were prepared to offer scholarships based on hard work to get there. Yes we still fought and fight with the loan mess, The youngest had almost as much to pay per year as the oldest had in all 4 years and yes we did it because you get no where without a degree these days, which of course only increases demand which increases costs.My point is the problems are many and diverse and they start in Kindergarten and won’t end until we somehow fix the entire educational system in this country.
10/28/2011 1:01 PM MDT
I heard Bill Bennett, former Secretary of Education under the first George Bush, talking about this very issue one morning on his radio show. He said it’s no secret among educators that when the the government makes any kind of move to help students with college costs or student loan debt, before the ink is even dry on legislation, tuition costs magically rise at colleges and universities across the country. But when asked to pitch in when money is tight and state budgets all over the country are being slashed to meet fiscal requirements? My alma mater, Penn State, promptly threatened to close a large satellite campus, which would have harmed thousands of kids. They,ve got us coming and going, where’s it going to end?
10/28/2011 12:45 PM MDT
You compare the tuition increase at public and private universities by saying “the same thing” happened at private universities. But look at your numbers….the increase at public universities for in-state residents, the vast majority of students at most public universities, was nearly TWICE is high as that at private universities. And that is attributable in large part to cutbacks from the states. When you combine the decline in state aid with the increase in health care costs (which have a substantial impact on universities’ costs, given that the bulk of their expenses are labor costs), well, it is not surprising at all that tuition is going up fast. The cutbacks in state aid have been humongous and cannot be brushed aside.
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