I understood you and agree.
My point is that irrational markets correct. Sometimes the correction is violent. See dotcom bust of 2000 or housing crisis of 2008. I believe that the next correction will be colleges. We will see.
Regulations- ahh.
Do you want to be the college president who wakes up to find PETA demonstrators throwing eggs at the house? Demanding more oversight over the monkeys in the labs? No. So you hire four administrators to certify the treatment of animals- one in the bio department, one for psych, one for chem, and one for the pharma research going on in your med school.
Do you want to be the college president who ends up paying out a multi million dollar lawsuit because a kid who was allergic to peanuts ate something that was cross-contaminated in your dining hall and died? No. So you hire a supervisory nutritionist and four assistants to maintain allergen free areas in all your facilities.
Do you want to be the college president who wakes up one Sunday morning to find out that a HS girl was gang raped at a frat party (off campus, but affiliated with the college)? No you don’t. So you hire a Risk Manager for all Greek related activities, three lawyers, and an expert in sexual assault.
You really think it’s the government driving all these hires? No. It’s us. Look up the number of payouts in the last few years that colleges have made when drunk (falling down drunk) students have fallen off roofs, balconies, or just plain fallen. Before mom and dad can even get to the hospital there is a personal injury lawyer at the bedside. The notion that when you are drunk you shouldn’t be on the roof of a building escapes these folks. Sue the deep pocket i.e. the college.
Dean- wake up. Take a look at where the money gets spent- it’s driven by people like you and me.
When I went to college health services was an RN and a three cubicle “sick bay”. You had strep- you checked in so you didn’t infect your whole dorm. And then you went back. Anything more serious? They called 911 and off you went.
Today parents are up in arms if their kid can’t get in to see the allergist, ENT, army of psychiatrists to manage meds for anxiety and depression, endocrinologist, etc. All on campus mind you-- a full array of medical specialists. Back in our day if your kid had a serious medical issue they lived at home and commuted. Now? Parents post here asking about colleges which can deal with a wide range of pretty serious stuff- and if a poster suggests “maybe your kid shouldn’t be living 500 miles away from you while managing a serious illness AND going to class” the other posters bombard the parent with how insensitive that is, every kid should get the full-on college experience.
It ain’t the government telling colleges they need to hire experts in anorexia and bulimia. It’s parents whose kids have been struggling with these conditions for 5 years who show up on campus needing monitoring and treatment.
With all due respect, DeanW, colleges going out of business has nothing to do with the “pricing model”; rather, its the college’s costs which exceed its revenue that will drive it out of business.
And, yes, we are starting to see a correction driven in part by the declining number of middle-upper class (aka full pay) high school graduates.
I will respectfully and strongly disagree.
I went to one of those high fallutin CC Top Liberal Arts Colleges in the 80’s. I will guess that the administrative costs were a small fraction of the university budget. Now? Please! Now, the school must comply with myriad title 9 and diversity and inclusion and whatever else the government can mandate.
Is the campus more luxurious - dorms and dining etc - and does that factor in? Yes. Are there more deans today? Yes. But, it is undeniable that government involvement has raised the costs substantially.
Oh, and in my day, they had yet to invent garbage disciplines like “intersectionality” or “white privilege”. Those bogus concepts were invented in the late 80’s by “academics”.
Well. if the schools are priced higher than people can afford … they have a pricing problem. Next question … why are they so expensive? IMHO - The costs are too high because of money spent on administrative waste.
Regardless, of why or how, there will be private colleges failing everywhere.
There’s some cost increase due to regulation, but more due to goodies and more price discrimination done by colleges. A lot of those administrators aren’t there to deal with government regulations but to provide services that upper and upper-middle-class parents/students demand.
For instance, in real terms, net tuition at a public, on average, has barely gone up over 20 years:
https://trends.collegeboard.org/college-pricing/figures-tables/average-net-price-over-time-full-time-students-public-four-year-institution
It looks like, in constant dollars, average tuition went from roughly $2500 to $4K over 20 years.
Regulations affect publics as well, but if that was the sole reason, why have prices not gone up much?
I didn’t go to a liberal arts college. I went to a university, and in the 1970’s there was a gym, a health center (referenced above- one RN and three beds in cubicles), a few dining halls, none of which were open past 7:30 pm.
On my last trip back I was astonished. There is a full blown athletic center-- not for athletes mind you, but for ordinary students who get the complete luxury health club experience- stacks of towels, toiletries in the showers, myriad employees to mop the floors and do the laundry. An aquatics center. Every kind of fitness class you can imagine.
The government doesn’t mandate that a private university offer ballet and fencing and Px90 and every form of aerobics and weightlifting and pilates known to man. That’s not regulation, that’s keeping up with what kids (and by extension, their parents, who end up paying for it) want.
Can’t get a meal past 7:30? Boy, that’s so 1970’s. Maybe the sushi bar closes early but the other food stations, in a university owned dining hall, can manage to scrape you up a meal (no iceberg lettuce- mesclun mind you) at 8 or 9 pm.
There is no government mandate to offer hydroponic lettuce. There is no government mandate that dining halls stay open all evening. That’s consumer demand.
You can disagree all you want, but look at the cost centers of a modern university and they have NOTHING to do with intersectionality (your biases are showing by the way- you can criticize intersectionality and white privilege without using the word garbage in case you didn’t know it). None of these things costs the kind of money that turning a university into a Hyatt hotel costs. Labor, labor, labor. You hire one professor to teach a discipline you think is garbage-- ok, that’s money. But you need hundreds of additional people to keep your aquatics/pilates/gourmet food service/state of the art health care center operating.
Where is the government mandate on teaching pilates? Show me the regulation on the sushi bar and gourmet pizza oven???
Without reading the article (I will later), my initial instinct is that the price should have declined over the past 20 years with the advent of new technologies.
Either way, the day of reckoning is fast approaching. One major factor in college selection in 2018 - will your college exist 20 years from now?
@“Dean wormer” You might find this article interesting, but maybe not.
“really top students… are less interested in schools that shut out the truly poor.”
Some really top students are less interested in schools that shut out middle class children of farmers and small business owners.
Some really top students (at least in one case the #1 student in her high school) are interested in very good schools that actually admit students based on their academic performance.
I understand that this is a game, and that well ranked schools are trying to bring in a lot of money at the same time that they bring in a range of students that meets their political agenda. I am personally bothered by the degree that this penalizes top students with parents who are close to or past retirement age with no pension who have sufficient (ie, large) savings, the degree that this penalizes children of the self employed (by which I will include farmers and owners of small rental properties), and the degree that this makes admissions unpredictable for students with straight A’s and 1500+ SATs.
However, this is of course a game and if we play it well then nearly all of us should be able to find an appropriate school to attend at a reasonable price. It just might not be a “famous” one. To me this devalues the brand of the “famous” and “prestigious” schools, but it hasn’t stopped my daughters from finding schools which are affordable and a good match for them.
@“Dean Wormer” - In the context of my post about colleges that spend more on hedge fund fees than financial aid, I (which clearly implies large endowments) I think saying there is a tax on “investment returns” versus the “earnings” is a quibble
We live in a representative democracy. If the voters wanted to pay higher taxes and have government take something on, we could have anything we want (within constitutional limitations, and even then there are procedures for modifying it). We simply have no consensus, and in fact Democrats and Republicans are moving farther apart.
And it’s not just administrative costs – it’s also that what you get at a private university: small classes taught by highly trained experts, individual mentoring, leading-edge research versus longstanding published textbooks, and so on. Much of this is resistant to cost-saving technology, so costs are rising faster in higher education than in industries that have been more easily mechanized and computerized. (I wouldn’t pay the same tuition for my daughter’s private college that I would pay for ASU’s Global Freshman Academy, for example.)
There’s actually a similar problem in healthcare – when I see a doctor, I’m also meeting one-on-one with a highly trained expert. Yes, there are clearly ways to improve efficiency, but the service will never be exactly cheap.
And currently healthcare and college are rationed by private corporations. At least we the people can theoretically vote out a government.
Students are subsidized to the extent of 27K of loans (plus Pell Grant in some cases), but the COA of the most expensive colleges is 10 times that. How does that inflate demand given that the COA is still way out of reach?
My point about subsidies wasn’t about regulation but rather price subsidies. Basic economics: if you subsidize the cost of something, you will get more of it and the price will go up. If you look at the chart in the article that PurpleTitan linked, you see the net costs are not going up much but the sticker price is. Not much of an issue if you are not paying sticker price but many people are. As those sticker prices increase, more and more families are priced out. And that is without even touching the issues raised by another concurrent thread here about families with money being able to pay for opportunities (sorority parties that promote networking, volunteer positions to build resumes when poorer kids have to take paying jobs to live, etc.).
We often see lists ranking colleges on “value.” But those articles tend to discount the reality that kids pay different amounts for college. “Value” at any given college changes significantly if I am paying very little to attend versus someone spending sticker.
Even in mostly capitalist economies like the US, the state is generally expected to be responsible for a number of services, like military defense, law enforcement, courts of law to settle disputes, etc., and is expected to need to collect taxes to pay for such things. Those would be included in the “classic tenets of collectivism (socialism or marxism).”
“Without reading the article (I will later), my initial instinct is that the price should have declined over the past 20 years with the advent of new technologies.”
Not if upper and upper-middle-class parents and kids demand and are willing to pay for more goodies.
I went to a top-15 uni. When I visited recently, I saw that the school was flying out students to NYC, SF, and DC to meet with alums and network for jobs. They now give grants to students to intern over the summer at places that don’t pay. When I was there, they just started one study-abroad program in Germany for engineering students my junior year (there were a few study-abroad options then but you just couldn’t do them if you were in engineering because the classes you would have taken in study-abroad wouldn’t have matched the engineering curriculum). Now they have study-abroad programs to all over the world tailored to all sorts of majors.
Look, as I pointed out, you can get a rigorous University of London degree for less than $10K total. Do you want that?
You can even get a small school LAC experience with low student-faculty ratios and personalized attention at a reasonable price:
Total list cost for Blackburn College is $30K
Total list cost for College of Idaho is $42K
Do you want that?
No, they have a cost problem. (yes, I get your point that they are related, but by focusing on the wrong term – price – the press and political sound bites will easily fall into the wrong discussion hole. In other words, ‘we the public policy makers need to subsidize the price of tuition by grants, etc.,’ rather than attack the root problem which is costs of education. (exact same issue for healthcare, which is why it won’t be solved anytime soon…)
Or Truman State University at $23,428 or University of Minnesota - Morris at $23,242 (billed costs for out-of-state students in each case).
With all due respect to all the points made here. I will link a great article from The NY Times that illustrates why College costs have risen so much more than the rate of inflation - https://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html
A few choice excerpts:
‘major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.”
“What cannot be defended, however, is the claim that tuition has risen because public funding for higher education has been cut. Despite its ubiquity, this claim flies directly in the face of the facts”
Lastly, if you want the government to provide your education and healthcare - you are a collectivist and asking to give up your personal liberty. There is no kind way to say this.
Dean Wormer: Some would say that freedom from fear of destitution if a medical tragedy hits is liberty.
BTW, why are you stopping at healthcare and education? Why ask the government to provide policing as well? By your reasoning, wouldn’t you have more liberty if there were no government police forces?
“major factor driving increasing costs is the constant expansion of university administration”
Yep. All those goodies and programs need administrators to run them.
Again, if you don’t want administrators, why not opt for that bare-bones U of London degree?
Very few administrators per student there.
Just an idea - read the article and then comment on it.
Let’s keep this simple - the role of federal government - military and providing for the common defense - YES!
Healthcare and education - NO!
I am a tenth amendment kind of guy.