But at a much lower total funding level than for most private universities, reflecting the economy style provisioning. Here’s a breakdown of UC funding, which totals about $33K per FTE student, and has a much higher share from state subsidies than UK universities:
https://lao.ca.gov/Education/EdBudget/Details/338
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The 78% reduction in subsidies in the UK is misleading because the figure only includes direct subsidies and doesn’t include the public cost of the heavily subsidized loans which have replaced direct payment. In other words, instead of the schools being subsidized, now the students are being subsidized.
And regardless of which country subsidizes its public institutions more, my point remains the same. It makes no sense to compare the price at heavily subsidized institutions which practice ‘economy style provisioning’ with private institutions that don’t. One can argue, as you may be arguing, that we’d be better off is our elite private schools adopted a more austere education model, but that isn’t likely to happen, and seems well beyond the scope of the discussion.
@Creekland wrote quite an insightful post upthread on (the flaws of) human perception. NYU professor Scott Galloway has said that the upper echelon of US higher education is now akin to a “luxury good” in which higher prices have a positive signaling effect.
In the UK, the government caps undergraduate tuition - as a consumer in that market, I am very grateful. Imagine getting an Imperial, UCL, LSE, Oxbridge, etc. education for around US$12,500/year (tuition). Of course, this means that students enjoy fewer frills than at elite US universities but, as a parent, I am okay with a less than luxury experience for my D22. (As an aside, mirroring the phenomenon in the US, most UK schools set their tuition at or near the cap - again, signaling effect.)
Some Asian universities (e.g., NUS, HKUST, KAIST) seem to be rising rapidly in stature globally, particularly in STEM fields.
Top US colleges (public and private) retain many strengths but the growing complexity and opacity of admission is aggravating - your comparison to US healthcare is spot on!
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My question was rhetorical… of course it costs the same to run the infrastructure, and because higher ed is labor intensive, the advantages of scale are not as apparent as they would be in a more capital intensive environment.
We have chosen to make higher ed labor intensive. Universities used to ( and in most countries still do) operate with far smaller administrative and support staffs which increase labor cost.
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Agree- but ask why we need such large admin/support staffs.
PETA shows up on the president’s doorstep to protest the use of rodents in the genetics lab. Students parents sue because their drunk kid was clowning around on a terrace and fell off, broke both arms. An employee sues for creating a hostile work environment because someone at a meeting asked “Did someone make coffee?” Kids with celiac, vegans, peanut allergies show up on campus and need to meet with a dietician, kid with unspecified anxiety needs an emotional support animal in a dorm and now housing needs to provide custodial services to clean up after an animal in addition to several hundred messy college kids; I could go on and on.
Kids in Europe who have food allergies bring their own lunch from home. We are not the rest of the world- in some cases- fortunately, and in other cases- sadly. I have seen up close the budgetary impact of these non-academic, non-instructional hires at universities and it is sad. The number of “risk management” professionals (lawyers, insurance, security, training) required to operate a mid-sized university- Wow.
Yes it’s a choice, but imposed by whom??? Can you imagine the number of frivolous “slip and fall” or “coffee too hot” type lawsuits that a university deals with every year? Kids who drink too much do stupid things. But why should the “deep pocket” (the college) pay out for it?
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Frivolous lawsuits/legal are also part of the reason our health care costs are so high.
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Agree. The wealthiest person in my town (at least I suspect so) is a medical malpractice lawyer. Cosmetic surgery is the latest target- you got a procedure on your tush and you still don’t look like Kim Kardashian? Someone’s got to pay…
Many larger companies/business organizations throughout the US and the world have been increasing the number of in-house counsel/lawyers. Referring matters to outside law firms is extraordinarily expensive, and particularly for more routine work, that’s being done by in-house counsel. That’s actually a cost-saving measure that also helps mitigate risk.
Earlier in my career, when I was in-house counsel, our company’s legal department was quite large. We did a huge amount of work in-house and outsourced specialized/complicated matters outside. I believe that trend has grown quite a bit in the ensuing years.
Whether this applies to universities, I don’t know. But, I think it would.
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Interestingly, it’s a smaller part than you’d think though. One of my patients is a physician and an authority on healthcare reform. He said that is responsible for about 1%.
The biggest culprit, we just charge too much for procedures and drugs. A heart in India, at a very well respected transplant hospital was $67k as of a few years ago. The average in the US at the same time…$1.4M.
There’s a new drug for a condition that several of my patients have. It can be blinding, but it isn’t in most cases. It’s almost always unilateral. The drug is $500k per year.
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Who in the world are Stacey Dale and Alan Krueger?
Here’s the Dale/Krueger research and paper that have been mentioned upthread (this is the updated version): Estimating the Return to College Selectivity over the Career Using Administrative Earnings Data | NBER
The paper was published here: Estimating the Effects of College Characteristics over the Career Using Administrative Earnings Data on JSTOR
Adding the original paper from 1999: Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables | NBER
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The cost of procedures is high because doctors earn a lot. They need to earn a lot because medical school is so expensive. But there’s no easy solution, certainly not just capping payments through Medicare for All, which would cause older doctors to retire and younger ones to go bankrupt.
Likewise there’s no easy solution for higher education. Even though it’s easier to keep down the salaries for academics compared to those for doctors, you are unlikely to be able to reduce their salaries further.
It’s not this simple. In most instances, they charge WAY more than they take home, because they’ve built such opulent practices with ridiculous overhead. A friend of mine just retired from a specialty practice. His personal overhead was $500,000/year. He had to produce over $40K/month just to get paid. That’s bad business, not the expense of medical school. Nowhere else in the world are hospitals and clinics like palaces. I’d prefer reduced costs and better outcomes to marble and a big screen in the waiting room. There’s a major problem if doctors can’t survive on Medicare.
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You can certainly apply the same to higher education (and from your previous posts I assume you do). Many would prefer economy class hospitals just like they might prefer economy class state universities. But in practice people tend to pick the “best” (for which a proxy is “most expensive”) facility, especially as these facilities have an interest in insulating people from exposure to the true cost, helped by price discrimination so that poor people pay less for health insurance or education.
IMO, healthcare is an apt analogy to higher education in this country. For a small minority, we have arguably the best medical care and higher education in the world. However, for the vast majority, they both are needlessly confusing and way too costly, compared to the rest of the world. On a per capita basis, we somehow manage to pay more for less. Neither is on a sustainable trajectory.
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People want the deluxe residential college experience for the price of commuting to a minimalistic community college.
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I’m often misunderstood out here. I’m not a “they’re all the same, choose the cheapest one” guy…with the limited exception of families that will have to leverage themselves excessively.
Unlike hotels and cars, where paying more almost always gets you more, the same cannot be said of colleges and universities. In fact, in some cases, paying more nets a worse experience. I won’t throw any school under the bus, but because of rankings, plenty of kids attend schools that have giant lectures, are very bureaucratic, and have much of their face to face instruction done by graduate students, and pay exorbitant out of state tuition for the privilege.
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Or medical facilities
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But I do feel like parents do a lot to “feed the beast” of higher education. We get sucked into thinking we have to pay for tutors and college consultants, and we agree to pay 10-30+ application fees (anyone have access to data on how much colleges make from application fees each year?) - and although we complain bitterly about tuition prices and fees for some colleges and wonder whether our kids really need to go to a college with fancy dorms or robots that deliver food or have a lazy river on campus, we write the check. We gasp at the various college admission scandals but still encourage our kids to fight for a coveted spot at the colleges that participated.
Parents (and kids) can get off the hamster wheel at any time and stop all of this. There are many ways to get a relatively reasonably priced education. We can move to a model where our kids go to CC for the first 2 years and then to one of their state universities, or we can do more to promote a route directly into the hundreds of trades that are severely shorthanded (many of which pay extremely well). Kids can work their way through college and live at home (even better, EVRYONE can take a mandatory gap year after HS graduation and work or serve the community in some capacity and use that year to apply to colleges).
It’s hard to be the first person that steps off and wonder whether others will follow but it is possible to stop the insanity.
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