At The Atlantic, Jordan Weissmann writes on rising tuition costs:
Experts have attributed the rise in state school tuition to a whole host of factors, but the basic story of the past decade looks like this: State legislators are slashing funding, which requires college to either cut costs or raise tuition. At the same time, market pressures have led schools to spend more on student services, which include everything from fancy, L.A. Fitness-quality gyms to career services departments. Because of ample student loan funding, colleges often choose to up their tuition rather make hard budgeting decisions, or look for ways to increase their efficiency.
The White House wants to untangle that knot. And the place the administration has to start is state funding. During the past five years, states have slashed 3.8% of their support for colleges. That figure masks some significant gaps between states. Twenty one states spend more on higher-ed today than they did in 2007. But New Hampshire and Arizona have slashed their funding by more than 30 percent. Several large states, including Florida, California, and Michigan, also drastically decreased higher-ed spending.
From InflationData
Schools have “slashed funding” by a whopping 3.8%, says Weissmann. Schools were “led” into paying for amenities that aren’t essential to the overall education experience. Weissmann’s argument – which is borrowed from many others who support Big Government policies – ignores the fact that tuition prices have outpaced general inflation during both boom and bust cycles. Even when states have been flush with cash, tuition has grown several percentage points faster than general prices.
The College Board collects data on tuition inflation. While the data presented in this table ends at 2007, the trend displayed by their statistics seems to have continued through to today. The CB found that college tuition generally inflates by a 2:1 ratio over general inflation. This has generally held since the late 1950s (when the GI Bill was being widely used and at a time when the government was gearing up their foray into education subsidization.) Accepting the College Board’s (probably low) inflation figures, college tuition prices have risen by about 5% annually. Over five years, this amounts to an increase of about 34% which is far greater than the loss in state funding. The Bloomberg link provided above shows that tuition jumped 8.3% just last year – over double the general inflation rate. The gap is greater than the entire 5-year decline in state budget financing.
As is always the case in the many attempts to disentangle this policy issue, Weismann just accepts that schools are paying for amenities like stadiums, new facilities, student centers, superfluous staff and faculty, and extra programs (that end up not being very efficient uses of resources). But he doesn’t think about what spurred such investments. Could it be the actual provision of funds that are not tied to the market mechanism that is driving prices upward? Federal subsidies, guaranteed loans, and tax deductible tuition costs all distort the market and funnel money towards colleges and universities. This is a windfall for the institutions. They are like lotto-winners who never had a good use for 12 bathrooms and a yacht (they live inland), but buy such things because, well, might as well spend the money, right? And the schools aren’t checked by a market-oriented demand curve. The demand is pumped up by the grants and loans that the government will provide or secure no matter what. The government and the schools are essentially communicating back and forth, colluding on procuring the most amount of future income from students that they can.
Of course, it’s never stated exactly like that. The feds and the schools – in a bit of self-aggrandizement serving as ego-protection – think that they are doing something in the best interest of the students and the overall economy. And when it fails, blame is shifted somewhere else – usually onto the backs of taxpayers.
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Look at the rise in the salaries of full-time tenured college instructors, that is the culprit. And if you do look into this, also look in to how many truely under paid part-time instructors they are using so that the full-time tenureds can sit on their ass and do nothing.
I actually think that Obama’s plan is worth a try.
rjp,
that’s going on, i’m sure, but it’s still not the cause. it’s an effect. with money flowing in from a third-party backer i.e. the government, schools can spend their money a lot of different ways. they can build stuff they don’t really need or they can pay part time instructors and profs.
Completely off topic.
Here’s a Jezebel story about a female student’s complaint about the Sexual Market Place environment at Yale that you might want to blog about. The false rape society guy had a link to it, but didn’t write it up.
http://jezebel.com/5879162/are-yale-guys-bad-at-sex
What I think she’s really complaining about are hookup culture and the fallout Roissy has talked about since ages ago of feminists railing against slut shaming, which helps lead to hookup culture.
i remember being a kid in elementary school 30 years and hearing teachers (or should i say administrators) harping on doing XYZ so they could secure ABC funds from the “fed”. It might have been, 40% of our students must pass the citywide test in order to secure 1 million. Or the flip-side, 60% of our students must FAIL the citywide test, in order for the school to be labeled as failing, and THEN we get all this cash!
to me, its no different than any organization that has ties to the Govt. You want to see another one that works in almost the same exact way.
look to your friendly neighborhood POLICE DEPT. Other than solving crimes and catching criminals, it seems as if most cops(or i should say, administrators) are there to either make money for the state (tickets, quotas, etc) or figure out how to get additional funding from the feds.. Like by testing out the new SWAT truck, or seeing how the new M4 carbine works in the field, or even by padding certain crime stats.
When the government financially backs something, its tantamount to welfare. Does anyone ask WHY do the schools need all these awesome student services to attract students?
Lets say i own a gym. my gym has no pool. so i go install a pool at great cost to me. Why did i do that? to say “hey, i got a pool? lets parrrtty” or did i install the pool because i did research and determined that i could get MORE gym members AND charge them a higher price if i had a pool.
It seems to me the colleges are adding all these services in anticipation of more students and more tuition. But if we have been in a recession for the last 4 years, and there’s 16% realized unemployment, why are colleges still building and adding services when the outlook is so bleak for current and future students. Seems to me, they have the idea that the money train isnt stopping any time soon.
In other words, colleges are increasingly more like low class people: trying to keep up with the joneses yet innovate at the same time. Cannot be done.
Can you imagine a college proposing cuts to it’s admittance? Thats the most politically incorrect icky feeling a liberal professor can have. You are admitting you have to necessarily eliminate some of the unintelligent from the ranks. It makes perfect sense to thin out the herd, but like everything else today, instead of being accountable, find the most people to subsidize the wet dream.
Meanwhile, my state Governor delivered his state of the State address today, asking for more college scholarship money.
He states, “So today I ask the members of the General Assembly to invest in our students. I urge you to act in the coming year to make a significant investment in more state scholarships to help our bright young students attend college.’
That, along with more of the never-ending goodies for single moms, ” doubling the Earned Income Tax Credit and improving the personal exemption, we are providing targeted tax relief to a million working families and their children. People like Rhonda Jones. Rhonda is a single mom who is raising five children on the South Side of Chicago.
Funny aside – college charges what its degrees are really worth – $0.
http://captaincapitalism.blogspot.com/2012/01/antioch-college-accurately-prices.html
jz you and i and every one reading knows raRHODA Jones isn’t even going to do anything meaningful in life. (raRHONDA/Rawanda).
Most of the “City Colleges of Chicago” (like they should be called colleges) specialize in Remedial Classes.
I have said in the past (maybe not here) that the lawsuits against “for profit colleges” are going to amount to nothing if they have the balls to use the HBCUs as a defense as their graduation rates generally beat the HBCUs.
Negroes don’t want to pay for anything. Their great great great great great grand parents were slaves for christs sake.
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