Why are college costs rising?

Last week I got an e-mail from my state representative discussing solutions to the rising cost of college. Here are my representative’s ideas on SF 2361 –making college affordable. They read like a collection of unsubstantiated fixes that do nothing to make college more affordable or to keep college costs down. If anything, they require both more administration and a fast track to college education that might not benefit students. His absurd thoughts about college costs sent me to do some research. Why are college costs rising?

I found some things that surprised me. For example, this is a highly partisan issue. Republicans blame colleges and Democrats wish to make more money available to keep costs down. This is what my research taught me:

  1. College costs have been rising rapidly since the 1980s. Here’s a chart showing this rise. What happened in the 1980s? Reaganomics. Reaganomics is an unproven economic theory which is pretty much the boat that Republicans cling to even  today–cutting taxes, especially at the top, and shifting spending to the military will stimulate growth in all areas. Thus, government support for education came crashing down, and falls down whenever Republicans are in charge of the budget. I’ll leave it up to you to decide if this policy works for the nation or not. All I can say is that this is when it all began.
  2. The costs per student have risen over time, even as student-faulty ratios have increased, meaning that faculty salaries can’t be the cause of rising college costs. Here are some references, although you will have to wade through them. However, let’s look at personnel as a cost factor for a moment. As Central College President Mark Putnam points out, colleges are “professional services.” They require on face to face contact with educated and sought after professionals. Doctors, dentists,and lawyers are other examples of such professionals. These sectors of our economy can’t increase productivity without decreasing quality. They can’t replace workers with robots or outsource to another area of the globe. Yes, there are on-line colleges and Trump University but they aren’t as valuable as being on campus in classrooms, doing hands-on things such as research with professors. As we all know, part of getting along in the workplace is learning to work with others, to have team work. However, although it is difficult to decrease worker costs, faculty salaries are NOT the main reason for tuition increases.  Not only have faculty salaries risen slowly, slower than inflation, they account for around thirty cents of every tuition dollar. Also, college and university faculty get paid less than their private sector counterparts. In fact, professors are considered underpaid. Why do they still teach? Besides finding it enjoyable and a public good, they are willing to take less salary in order to have job security. Like other areas of the private sector, colleges are faced with rising medical and dental benefits for their full-time staff. However, instruction quality increases when faculty have adequate benefits.
  3. Extra administration has often been cited for the increase in college costs. Non-teaching staff and administration make up the bulk of a college’s cost nowadays. Some of these positions, in IT for example, did not exist in the days of low tuition. Others are in areas such as counseling and fund raising that either meet a need or secure funds for the future. More administration is most certainly is a reason for higher costs. However, colleges have a lot of extra accountability these days and parents do want their students to have access to many of these services. In fact, studies have shown that college students today are more needy, perhaps due to helicopter parenting or life’s harsh realities or even parental demands that colleges assist the students with every challenge. Students and parents do not want any surprises. In my own experience, not only have administrative costs risen, what needs to be put on a syllabus has skyrocketed as well. I suspect that much of this comes from the diverse group of students who attend college. No longer is it just for the privileged few who have parents who went to college and can give advice. It’s been, thankfully, opened to many and administrators and advisers are needed to keep pace with the demands.
  4. Colleges face huge costs when it comes to technology. I personally oversee a fleet of measuring instruments. Many were not commonly used when I began teaching and now are so routine that every lab must have one in order to teach students the skills they need for the future. I got outside grants to pay for them but they still add expense as they must be maitained. Personal computers have been cited as a huge expense for colleges and universities. Having a high technology program on campus such as an engineering or medical college also raises costs.
  5. Colleges get about half of the money it takes to run them from tuition. Even as tuition is rising, it doesn’t pay the full cost of educating students. Other sources of money to pay for college include private donations, government money, and grants from private and government sources. Personal giving has helped keep colleges and universities affordable.
  6. A few reasons floated for the tuition increases include cushy dorms and other attempts at branding. This occurred in the past ten-fifteen years as colleges struggled to differentiate themselves from each other. Another idea is that costs have gone up because there is too much demand for college. Those who can’t afford it simply shouldn’t go. These are theories only. I’m not saying these haven’t raised costs but I am not seeing the numbers to prove it, particularly for the second one. However, college costs rose after the GI bill so there might be some credibility to it.
  7. Perhaps the most cited reason for tuition increase is this one: less support from the government has helped raise tuition costs. Tuition is lower in states that support higher education. Here in Iowa, the change in state appropriation for higher education has decreased nearly 20% over the past fifteen years while college tuition has gone up just 7%. Colleges are trying to hold the line on tuition increases and making do with less. This LESS is due to cutbacks. Reaganomics.

Is college worth it? There are many statistics to say that it is.

Unemployment rate for college graduates is 2% vs 8% for non degree holders.

Only 4% of college graduates live in poverty vs 12% for non-college graduates.

College graduates earn over 60% more.

College graduates are happier, healthier, and live on average seven years longer. 

I’m not an expert on college tuition and the rise in costs are complicated. Feel free to disagree with me! For simplicity’s sake, if  you are angry about the cost of college and want something to put on a dart board, I offer this official photo of the man who started it all.

220px-Official_Portrait_of_President_Reagan_1981

Ronald Reagan is an example of someone born poor and helped by the government who later made sure that the poor got less help than he did.

 

 

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