Will college tuition eventually be infinitely expensive?


#21

I just want to point out that “foreign” here means non-EU, so it’s free to not not only Danes but all students from the EU. Such are the joys of the EU law.


#22

You commie bastards! Embrace 40.000€/year costs of education like freedom-loving 'Mericans!!

^please note the above is a joke at the expense of my home country^


#23

I’m singing, “If I Could Turn Back Time,” right now, but unfortunately, we can’t. “70’s education,” doesn’t exist now as a theory or method. It was based on costs at the time, regardless of educational method or strategy.

Yes, Mike, I agree with you entirely on the point that education has skyrocketed. But to drive my side point, I don’t think that a fix would ever be as easy as just reducing spend levels.

A lot of the right feels that privatizing education would magically reduce costs to a level that is ideal, or increase scores to a level that equates to spending. I just don’t see the magic for either being practical.I should point out that I DO think there are ways to decrease some of the spending, but without knowing everything that costs go to these days, how do we determine that?


#24

No, reducing spending levels to inflation-adjusted 70’s would just be mass chaos.

For sure. We desperately need to know were the extra costs are coming from, and how they came about, before having a hope of stopping or reversing the trend. My point is that pattern of increasing costs is very important, and my preconceived ideas about the source of the cost growth don’t seem to explain things. It’s not a simple case of the cost of professional’s time going up, or evil corporations padding their bottom line or even benefits really.

The blog I linked also has some interesting about how harried medical professionals feel these days, compared to the 60’s and 70’s, and how by certain standards care has gotten worse. That’s even leaving out inter-country comparisons.


#25

I know locally, we have had a ton of new schools built, as the number of students per class goes up, they have run out of room and needed more schools, or extended others. But without knowing categories or anything, who knows.

To Wumpus’s question, where/when does this trend stop?


#26

As a market commodity, you’d expect exactly this to be the equilibrium point (though no reason the system should change). You should probably pay about your expected returns - maybe a bit more, since college is quite an enjoyable experience.


#27

I don’t have any answers here, but I can toss out a few data-points and/or ideas.

Teacher salaries are fairly flat when adjusted for inflation, even though the educational requirements to become a teacher have increased pretty radically. Teachers are still civil servants and many of them still receive pensions if they stick with it over a long period of time… and those pensions are significantly more expensive than they were back in the 70s or 80s, even adjusted for inflation.

My high school-aged kid has a school-issued laptop; I think that’s still fairly atypical for a public school, but it’s becoming more and more common. Every classroom around here has a “Smart Board” device that is the primary lesson-projection interface. I’m not sure if all those electronics increase or decrease overall costs, but they surely introduce a support layer that didn’t used to exist.

I’m not sure how big a deal books are nowadays. They used to be a HUGE expense, but for high school classes a great many of them are on-line, which you would think would lower costs.

My college-age daughter has relatively few physical textbooks and those that she must buy she picks up on Amazon for far less than what I paid back in the 1980s for college books… not even accounting for inflation! As she takes more specialized 300 and 400-level classes, the books she has to get are self-published by the professors and they are even cheaper than the generic “Chem 101” books she had to get for her Freshman year.

For colleges, food, housing and facilities costs have gone up considerably.

The dorms that college students live in are MUCH nicer than what I was wedged into last century, and the food is night-and-day better in most cases. Now, these costs ought to be separate from tuition, so it really shouldn’t matter much… except that most schools require Freshmen and maybe Sophomores to live on campus, so it does affect the bottom line.

Many of the bigger colleges have gone on spending-sprees to build massive exercise facilities that rival or exceed the nicer commercial workout facilities (e.g. Lifetime) – indoor tracks, pools, state-of-the art electronic equipment, etc. Sports facilities are a big thing too – by this I mean basketball courts, soccer fields, baseball diamonds and volleyball courts for “club” sports, not the varsity teams’ sites that have been around forever.


#28

Technology costs are a HUGE reason for the cost of manufacturing workers going up. There is a lot more technology involved per item made, more support for said technology, and more technology used per worker.

I can’t see where schools would have had a way to avoid that. I’m sure it’s a big piece of the pie.


#29

In many places it’s pensions.

And eventually supply and demand will dictate that the rising costs are unsustainable. When people are no longer willing to take on the debt and attendance shrinks.


#30

College costs as much as it does today not because of any rules of supply and demand or any logic about return on investment, but simply because IT CAN. That is thanks to the Federal Government.

If you talk to college administrators and loan officers, they will spin you a sorrowful tale about how college used to be super-affordable because the government (both State and Federal) subsidized a lot of the cost of educating young people, but over the years funding was cut, grants programs abolished and student aid shrunk to the levels where colleges had to raise tuition to cover the loss of funding. That all sounds totally legit, until you look at stuff like the charts posted earlier in this thread and see the ridiculously exponential growth in the cost of a college education. No amount of additional cost burden taken on by the schools adds up to those sort of increases, even when you factor in that a much larger percentage of high school seniors now go on to attend college than were doing so in the '70’s and '80’s.

So if it’s not cuts to funding that has caused the increase, then what is it? Ironically, it’s actually the availability of money for college that has directly resulted in the rapid increase of costs. It’s a huge fallacy that public funds for college are at an all time low. The opposite is actually true, as state appropriations for college funding have increased to nearly $90 billion and the Federal Pell Grant program (of which I was a recipient way way back in the day) has increased from $10 billion in 2000 to $35 billion today. More public money (as a percentage) is now funneled to colleges than ever before. On top of this, the ease and availability of financing options for college costs has directly contributed to the sharp rise in those costs. Having a GIANT pool of money available for students to borrow from essentially caused colleges to perk up their ears and say “Whoa! Let’s get us some of that!”. In simplest terms, college costs so much money because there is so much money out there for people going to college. Colleges don’t give a rat’s ass that YOU have to pay that money back, you’re out of the equation by then. They only see that a student can borrow $50K or $100K for college, so they set costs accordingly because at the end of the day who doesn’t like money?

And where does that money go? College Administration has grown at an exponential rate in the past 30 years, while faculty levels have grown at a much more pedestrian rate. Many colleges have up to four times the administration staff they had 25 years ago, but only 15% more faculty. Administrative staff also costs more, with lower level staff needing to be paid competitive market rates and higher level staff often commanding ridiculous salaries. The higher levels of college administration now resemble the higher levels of healthcare administration, with top administrators at universities commanding seven figure salaries and luxurious perks. Meanwhile, many universities have also been involved in an ever-escalating race to provide every cutting edge student service imaginable along with facilities for sports teams that most professional franchises would envy, and rebuilding every building on campus at regular intervals to remain “fresh and relevant”.

What we’re left with is a chicken and egg scenario. Does college cost so much because they have to spend so much money on Administration, Sports, Facilities, Increased Enrollment, Student Services, etc., or do colleges spend so much money on all of these things because they can get away with charging so much?

The solution could be to cap college financing. If a student and their family can only borrow so much to attend undergraduate school, then they will likely choose less expensive in-state public universities. This in turn will cause private schools and schools interested in attracting out-of-state students to lower tuition to attract those students, and that in turn will lead to public universities also lowering tuition to retain students. It will never happen though, as it would put a huge dent in what has become a giant money-maker in the financial industry (student loan debt is now a significant part of the economy). Much like healthcare, the college cost and student loan crisis is not an easily solvable problem. It is tied directly to the economy, Wall Street interests (and lobbyists) and the Federal government, meaning that only a sweeping reform carefully researched, painstakingly written and gradually implemented will resolve it. Our government has proven time and time again that is capable of NONE of that when it comes to legislation on such matters.


#31

Great Post! Ideally you’d like the government to be able to look at the system of incentives, analyze the problems and change how it intervenes so that things move in a sane direction over time. Yet, the government itself is caught up in the system of interlocking bad incentives, so things move in the opposite direction instead…


#32

@SlainteMhath Awesome post. Great write-up


#33

I’m joining the crowd here, great summary of what’s going on.


#34

I’m just waiting for people to need a 4 year degree to make $12 an hour.

There are already places offering that for 2 year degrees out there (with a year of experience!).
Once the only options are underemployment or unemployment the whole system will collapse.

Of course the whole nation and economy will likely collapse before that point, so it becomes rather moot.


#35

I imagine making student loans dischargeable debt in bankruptcy proceedings would also help with the overabundance of money, as well.


#36

I agree that there should be a cap on student loans. Phase it in over five years so it isn’t painful to a single class, but over time private institutions will lower their costs to suit.


#37

This is actually a good point as well. Besides a cap on financing, make it a normal debt, not one with privileged rules. Make it deductible, and make it more susceptible to be discharged or limited during bankruptcy. The effect would be loan amounts and availability for college going down, and costs wouldn’t be able to hold?


#38

Thanks for the kind words guys. it’s time consuming to put coherent thought into words, so I’m considering making the career change to Right Wing Pundit. Here’s my rebuttal to what I wrote above from my new position as a Conservative Christian Republican talking head:

You’re Fake News! That’s why you’re asking me about this instead of focusing on the real problem, Hillary’s emails! Also, because Jesus!


#39

Dischargeable loans would mean either more scrutiny from the banks or higher interest rates. If the government keeps a cap on interest rates, it’s going to be more scrutiny and therefore less funds for college, dropping prices to maintain enrollment, and more calls from my alma maters begging for donations.

I think you’re right, but the downside is this won’t be an immediate process nor will the growing pains be equitably applied, as more prestigious colleges will be able to maintain their high prices and wealth. The hits will be felt on the mid-tier on down, which in turn will disproportionately impact students and families of less privilege. It should be noted that high end schools often have large endowments to make them financially accessible to high-performing students from all economic ranges, but wealthier students still typically have much more access due to numerous reasons.


#40

True, which would probably make the situation worse. I didn’t think that through. :{