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<p>Look @ the CPI (Consumer Price Index); it’s on the graph.</p>
<p>“Finally, there is probably some truth in the fact that if a school turns down a lot of applicants, they could charge a lot more in tuition,”</p>
<p>Application to a school is not the same thing as agreeing to pay the tuition bill. While it is true that absent enough students willing to pay the current tuition, it WILL fall, it is far from obvious to me how the college scene will change to meet the lowered demand.</p>
<p>How many schools will close ?
How much need and merit aid will remain ?
How much EC support will remain ?
What form will dorms take ?
… the list goes on.</p>
<p>As these things tend to go, the people whining the most stringently about the cost, will be the same voices whining the loudest about access and conditions. I think of it as the ‘Colorado Springs’ syndrome.</p>
<p>This article is a rant, not an analysis. However, I am amused by the bullet point that says that half of students drop out before completing a bachelor’s degree; as if the datum by itself implied ‘bad’ business. </p>
<p>I guess that colleges make more money from that cohort, than the students that stay for the duration. What is the marginal cost to put a student into intro classes that hold hundreds of students, and are taught by non-tenure, $40k/year teachers ?</p>
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Items like this have become huge profit centers for schools.</p>
<p>My S’s double dorm room, which is less than 200 square feet, costs $4400 to rent for less than 8 months. That’s $8800/room for cinder block walls, one window, decades-old furniture, and bathrooms by the floor, in a building at least 50 years old. The cost for two of these rooms is more than the mortgage on my house. At a number of schools we looked at, the room price was 50% higher or more, for similar accommodations.</p>
<p>I must have missed the lazy river. Never saw any leather either.</p>
<p>The meal plan costs an average of $9/meal. You can eat cheaper than this at the food court at the mall.</p>
<p>My alma mater recently started requiring sophomores to live on campus. Why? Too many students moving off campus to escape the outrageous r+b, leaving them with too many empty rooms. So even if you want to do something to lower your costs, the schools are actively opposing this.</p>
<p>^^ does the off-site housing include utilities, internet, proximity, and security ?</p>
<p>The cafeteria meal plan costs are harder for me to judge, but I am pretty confident in saying that for equivalent quality, they are no more expensive than private options. Cooking for oneself is <em>much</em> cheaper, but that is an apples to oranges comparison that most students are not interested in.</p>
<p>duplicate post</p>
<p>25% of students at Syracuse are attending for FREE? No wonder their tuition is rising so rapidly! That is insidious. And its another example of liberal policies gone mad. I bet MOST of those freebies are in the form of financial aid and athletic scholarships which goes 90% to URM’s. There has to be a limit to this. The more they raise tuition they more they have to give financial aid…its an UP spiral until it blows up.</p>
<p>And we all thought it was because of rising healthcare costs.</p>
<p>don’t believe everything you read. Syracuse’s financial aid stinks and your comments are ignorant and racist.</p>
<p>^^ It’s also suspicious. Syracuse undergrads receive a total of $186,973,980 in grants. The current COA is ~$50k, and if 25% of undergrads got $50k in aid that would amount to $170,637,500 in grants dispersed. That leaves only $16,336,480 for the remaining 48% who receive grant aid, for an average of $2,493 per person. I doubt that 25% receive full rides but everyone else qualifying gets less than $3k.</p>
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If I paid rent for my house for what my alma mater charges per sq foot (adjusting for common areas) I’d be paying $120,000+ per year. That would pay a lot of utilities. 
Plus, many off-campus rentals do include heat/hw, which are the big expenses.</p>
<p>And the dorm security is a joke. I’ve walked into my kid’s dorm a number of times without my kid there without needing a key or anything. The students politely hold the door for me.</p>
<p>I can’t argue with proximity - there is definitely value to being right on campus. But does that justify paying 5x or more the market rate for living space? </p>
<p>If an apartment complex can make a profit charging $10/sq foot when they have to pay a mortgage, taxes, and provide kitchens, bathrooms, and appliances, how can a college justify charging $50/sq foot for 4 cinder block walls and some old furniture when they have none of these expenses?</p>
<p>It’s thievery, but it’s allowed the schools to hide what would be even higher tuition increases than what they report by shifting it to r+b (note the graph in the article is only tuition+fees, it doesn’t include r+b). And it leads to situations like at my old school where they are forcing more students to pay for overpriced product, simply because they can. It’s a pure money squeeze.</p>
<p>Another big contributor to college inflation being much greater than CPI is the existence of a third party payer.</p>
<p>ANY TIME a third part payer is involved the price will increase, unless access is rationed. In this case a major third party payer is the Federal Government with some grants (but mostly subsidized loans). If those did not exist many, many families could not even think of most of the colleges that their children now attend.</p>
<p>The same is true for health care. When there is a third party payer (insurance or the government (medicare) then inflation in that sector will rise substantially.</p>
<p>Also, there is great societal as well as governmental pressure for diversity. Therefore, the “sticker price” of the tuition rises and the really well-off pay sticker that helps subsidize the rest of the students who get grants from the school as well as loans which makes up the total financial aid package.</p>
<p>If college were a fee-for-service like it used to be then far fewer people would go to college. However, we could probably use more electricians, plumbers, carpenters, welders, etc. anyway over history, poly sci, psychology and other majors (not picking on any but jobs for those and similar majors for an undergrad are slim).<br>
Then the inflation for college would be lower because there would be far fewer people trying to get in…supply and demand.</p>
<p>4-year Colleges are pricing themselves out of the market for more and more students which is why going to a community college for 2 years and transferring…saving loads of money.</p>
<p>Similarly, the increase in on-line colleges and on-line offerings from brick and mortar colleges at less cost are due to technology as well as a way to deliver instruction at reduced cost for those students priced out of the traditional college market.</p>
<p>Grove City College is an interesting study. They do not participate in any federal program and so students pay the tuition (there is some merit and need-base scholarships, but MUCH less than most schools) and the tuition is substantially less that schools of comparable quality (Grove City is a very solid academic school). This is their statement touting that fact…[GCC:</a> Benefits of Independence](<a href=“http://www.gcc.edu/Benefits_of_Independence.php]GCC:”>http://www.gcc.edu/Benefits_of_Independence.php)</p>
<p>This is not to sell Grove City, just an example that shows how taking out a third party payer can bring rationality to the market and bring costs in line with overall inflation.</p>
<p>The direction the college costs and healthcare costs are going are not sustainable…change will come…the laws of supply and demand will bring corrections…it might be painful to many.</p>
<h1>31</h1>
<p>In general I understand where you’re coming from but the economics of “college” are so complex it’s difficult to sustain so many generalities.</p>
<p>“Another big contributor to college inflation being much greater than CPI is the existence of a third party payer.”</p>
<p>Per student support has declined in many states and the actual payer of the loans is the student and/or his or her family. The relationship between 3rd party aid and coa does not seem to fully correlate. In my state Pell grant totals have gone up an average of $700, yet public COA has risen 7K and private 11K.</p>
<p>“Also, there is great societal as well as governmental pressure for diversity.”
This assumes that URM’s are always or often poor. At many schools this is not the case, and at many schools the percentage of URM’s is very small or in decline.</p>
<p>“4-year Colleges are pricing themselves out of the market for more and more students”</p>
<p>At many schools applications are booming and people, rich and poor, are beating down the doors to get in. In fact, most of the top schools could double their COA and still have a full house.</p>
<p>I could go on and on…</p>
<p>lol i was talking to my proff randomly, he said when we went to IU, it gost him $700 US a semester + books+ rent around $1k. Still with inflation adjusted that is ridiculously cheap.</p>
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<p>Yes argentina has free schooling, but then when you get out, you make around 3000 pesos a month. Thats less than 1000$ a month. Whereas, the average top business school gets around $50k a year. More then 4 times an average starting salary.</p>
<p>It is a good investment if you get the right degree.</p>
<p>About perks like lazy rivers and dorm fireplaces- I haven’t seen these (yet). Even if they would make my dd more likely to want to attend, to me, the tuition payer, they would scream “frivolous and wasteful spending, no wonder the COA is so high.”</p>
<p>It’s human nature to want to make continuous improvements. When there is what seems like an endless source of cash, it will be tapped and spent.</p>
<p>Start taxing endowments and that’ll change</p>
<p>How extensive is hyper demand outstripping available supply of seats - and thus ensuring rising prices of college? Is the cost of college absurdly high in ALL colleges or in just the most ‘desirable’?</p>
<p>I see this occuring the top X colleges certainly, but when I was poking around during my first daughter’s college searching a couple yrs ago, I saw some 2nd tier and third tier colleges having a significant number of seats (dorm rooms) EMPTY. They seemed to be BEGGING for applicants/students. They were talking deal, too, but my daughter had her heart set on this one school.</p>
<p>How extensive, in other words , are these feelings of desperation and need for prayer to get into college? Only in the top X schools?</p>
<p>When I first started applying to college, we experienced a lot of trouble with the FAFSA, and my father - graduate of one of the top business schools in the country - commented that he wished colleges would switch their business model from one that gives out a lot of FA, but costs an enormous amount to one that costs about half the price (20k or so) but only gives FA to the students who truly need it. At the time, I thought he was crazy. Now, seeing this graph, I’m not so sure.</p>
<p>Then again, I speak as one of the middle class “too much money to qualify for aid, but not enough to actually pay 50k a year” applicants.</p>
<p>A few schools have experimented with giving a straight up price and doing away with the discounting BS. I believe Bethany College in WV. did that. How they’re faring I don’t know. At most privates the COA is artificial and tuition discount averages somewhere around 40% which allows colleges to adjust the price to the qualifications of the student and allows the college to get maximum dollar from wealthy families whose kid simply has to be there. The system allows for a lot of flexibility, although as aid fails to keep up with cost, gapping increases for lower income kids, and those numbers decline. The COA can keep rising but as long as the actual discounted cost doesn’t increase very rapidly, the economics are viable. As long, of course, that consumers understand the system and don’t take the price at face value. That requires some tricky communication.</p>
<p>As for the need based schools. As long as status and reputation are important decision factors for wealthy apps and elitism remains valued that system can continue. If it falls a little short, schools can adapt a hybrid model were some of the aid is parceled out to attractive candidates through merit. </p>
<p>Judging from thread after thread on CC about getting into the top schools, no matter what, I suspect the demand for those top schools has not abated nor will do so anytime soon.</p>
<p>The publics of course are a different matter.</p>
<p>In many cases funds to pay graduate students in the sciences comes from the grants won by university researchers. The grants are charged for hiring graduate students as research assistants. Plus, recruiting the best grad students can be as competitive as recruiting the best quarterbacks especially grad students who bring their own money awarded through national competitions.</p>