Why is college so expensive? Charging U explores the causes of high college tuition. If you want to know where all your money is going and why college costs so much more now than it did in the past, join host Larry Bernstein as he looks at how individual pricing, government policy, rankings, endowments, loans, luxurious amenities, administrative bloat, athletics, research, and other factors affect the price we pay for college.
The underlying cause of the high cost of college is an inability to objectively demonstrate quality or the value added by a college. Currently, college rankings are determined by the amount of money they have and spend. Those with more prestige are able to charge higher tuition. Higher education institutions need to be incentivized to adopt a system which measures the knowledge and abilities of students and make those results publicly available.
This would involve organizing colleges to prioritize student success. They can reduce spending on programs which do not advance their missions of instruction and research. This would include removing institutional support of intercollegiate athletics and frivolous research. It would also entail eliminating student services which do not substantially improve the acquisition of skills or learning outcomes. The federal government can fund the research necessary to determine what interventions will lead to the formation of a successful system and incentivize colleges to adopt them.
17 Apr 2024
14. Why Does College Cost So Much? Putting It All Together
The high cost of college prevents many from attending or causes others to go into debt at an early age and delay life plans.
Why does college cost so much?
Because there is no objective measure of quality, prestige is determined by how much money a college has and spends.
Individual pricing by private colleges allows them to charge each student the most that student and family are willing to pay, now and in the future, to attend that college. The steep increase in wealth of the top 5-10% enables them to afford the higher tuition. Financial aid, loans, and tax policy make more money available. Colleges are aware of this and want at least a portion of those funds.
State appropriations decreased in the 1990s and early 2000s forcing public universities to raise tuition. But they raised tuition much more than the reduced funding.
Both private and public colleges have dramatically increased spending on intercollegiate athletics, research, buildings, administrators, and other programs related to societal issues and to the personal lives of students. They then pass the cost on to students.
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10 Apr 2024
13. If Purdue Can Do It, Why Can't U?
Purdue University has frozen tuition for the last 13 years while improving its reputation. This has saved students $6,000 per year, reduced the amount of debt, and improved graduation rates. How did it do it and why don’t other universities do the same?
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3 Apr 2024
The Interests of Colleges and Students Do Not Align
The priorities of boards of trustees, administrators , and faculty are often different from those of the students. Those students are paying into a system which directs funds into activities that do not align with their interests. They do not have the ability to opt out of services they do not wish to receive and those looking to enter or remain in the middle class do not have the option to forgo getting a college degree.
Theme music credit: Sunshine by lemonmusicstudio via Pixabay
3 Apr 2024
12. The Interests of Colleges and Students Do Not Align
The priorities of boards of trustees, administrators , and faculty are often different from those of the students. Those students are paying into a system which directs funds into activities that do not align with their interests. They do not have the ability to opt out of services they do not wish to receive and those looking to enter or remain in the middle class do not have the option to forgo getting a college degree.
Theme music credit: Sunshine by lemonmusicstudio via Pixabay
27 Mar 2024
11. Why Not Use the Endowment To Pay For Everything?
Wealth inequality among universities enables the rich to get richer. The design of college endowments limits the extent to which they can be used to reduce tuition for everyone.
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20 Mar 2024
10. Do Campus Luxuries and Amenities Make College a Lot More Expensive?
Climbing walls and lazy river pools are conspicuous and attract much attention but add relatively little to the cost of attendance. On the other hand, colleges have been raising the prices they charge for housing at a rate much higher than inflation. The building boom on campuses has expanded space greater than the increase in student enrollment and has been very expensive.
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13 Mar 2024
9. The Rise of the Administrative State on Campus
Federal regulations and reporting requirements of colleges have grown in recent years forcing them to hire non-instructional staff to comply. But this only accounts for a small part of the amount spent on administration.
Colleges have expanded their scope beyond the core missions of education and research. They are now more involved in the oversight of student life and health. They are providing more social support of students and they are addressing larger societal issues. In addition, information technology is a relatively new, growing, and sizable expense.
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6 Mar 2024
8. How Much Are College Students Paying For Research?
Institutional support of sponsored research has grown at twice the rate of inflation for over 60 years and is an overlooked cause of high tuition. The annual expense of unsponsored research is many thousands of dollars per student and may be an even larger contributor to rising costs.
This National Science Foundation website https://ncsesdata.nsf.gov/profiles/site (https://ncsesdata.nsf.gov/profiles/site) can be used to look up information regarding funding sources for university research. On the left side click on "Search by institution name.” Once the institution comes up, click on it and then scroll down to Data Tables. Under R&D expenditures select “By source of funds and R&D field.”
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28 Feb 2024
7. Do Professors' Salaries and Baumol (Service) Cost Disease Explain Why College Costs So Much?
Service fields such as higher education do not experience large improvements in efficiency so the cost of providing that service rises.
The salaries of professors may contribute a minor amount to the rising cost of college; however, reduced teaching loads and other perks are more important factors which cause the price of tuition to go up.
21 Feb 2024
6. How Much Do Intercollegiate Athletics Cost Students?
All intercollegiate athletic programs lose money, except for a few at universities with successful football programs Students are charged up to several thousand dollars per year to make up the deficit. Compliance with Title IX also adds to the cost.
Websites mentioned in this episode:
Office of Postsecondary Education website under Equity In Athletics:
https://ope.ed.gov/athletics/#/institution/search
Knight-Newhouse College Athletics Database website:
https://knightnewhousedata.org/
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14 Feb 2024
5. What Role Do Rankings Play in the High Cost of College?
Influential rankings are based on the wealth of an institution, not how much students learn. This incentivizes colleges to maximize income in order to remain competitive.
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7 Feb 2024
4. Do Loans, Grants, and Tax Breaks Really Make College More Affordable?
Government grants, easy access to subsidized loans, and tax breaks have made more money available to students, but somehow, students are even more overwhelmed with the burden of paying for college.
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31 Jan 2024
2. Individual Pricing of College Tuition Leads to Higher Charges
In this episode, we discuss:
Individual pricing, the most important factor contributing to the rise of tuition sticker price at private colleges and universities.
The effect of economic surplus, market segmentation, and enrollment management in setting a price to extract the maximum amount of current and future wealth from a student and family.
How the relative increase in wealth of the top 5-10% both here and abroad and the desire for prestige has led to an increased demand for the static number of seats at selective colleges allowing them to increase the tuition they charge.
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31 Jan 2024
1. The Problem of High College Tuition
Once upon a time, Americans had access to affordable higher education and could pay for it by working while in college. This promoted social mobility. Over the last few decades, costs have risen dramatically causing current students to drown in student debt, alter life decisions, or forgo college altogether.
In this episode, we introduce the problem of the skyrocketing cost of attending college. We cover:
How previous generations of Americans had access to an affordable college education which enabled social mobility.
The economic and societal impact of the meteoric rise of college tuition which causes students and families to borrow more, alter life decisions, or forgo college altogether.
How the present debate centers on how to get more money to give to colleges without looking at how the money is spent.
Special thanks to Joyce Lieberman for technical advice.
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31 Jan 2024
3. Shifting Public Support of Colleges and Universities
In this episode, we examine public colleges and universities and discuss:
The high variability in higher education funding between states.
How state appropriations dropped during the decade of the 2000s causing public colleges to make up for the shortfall by raising tuition.
How the decrease in state appropriations explains only a part of the reason tuition was increased.
Theme music credit: Sunshine by lemonmusicstudio via Pixabay.
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