Seriously, Why Does It Cost So Much?

Parents Forum
1

<p>We know that college costs rise faster than inflation. FinAid.org says 5% to 8% per year. I did a spot check on my alma mater, a private school, and it's been 7% per year over 35 years. Over that same period, CPI-U and CPI-W have gone up about 4% annually, and the CPI Medical has gone up about 6.2% annually. (Source: Tom's Inflation Calculator via Google). Really? College costs are going up faster than health care costs? Why?</p>

<p>In health care, we're paying for more tests, more procedures, more medicines, more malpractice suits, living longer, and so forth. New houses are larger and have more amenities. We have new products like cell phones. One could argue whether all of those changes are for the better, but at least we know where the money goes. </p>

<p>In college education, the service has not changed much in 35 years. What improvements have been made? Faculty don't seem any more numerous or well-off than 35 years ago. If anything, this is a mature market segment and the cost should be decreasing. </p>

<p>Now, many states are cutting support of public schools due to budget problems. There is a war of words between college administrators and state government, but I believe the students and parents end up losing that one.</p>

<p>Too many college parents treat this financial burden as a rite of passage, and just bear with it. But higher education appears to be the most out-of-control segment in the economy. We should be demanding answers and accountability from the schools. How to go about that effectively? Where to find some leverage? Are we creating our own inflationary bubble by chasing desparately after the most prestigious schools?</p>

<p>This probably comes across as a rant, but really I would like to hear some practical approaches.</p>

2

<p>Hmm, I do think that costs have risen. Most kids pooh-pooh any college that does not have high speed internet these days. Suite-like dorms are definitely preferred. A college with a new science building/the latest lab equipment gets kudos. The admissions office has to be spit-polished to give a good impression. Everyone wants free parking (and a free lunch, water bottles, cookies, umbrellas when it rains) when they come to visit. Small class sizes are essential to good USNWR rankings. As knowledge grows in some fields (biology is a good example), students are looking for more specialized course offerings. Science students all want to have research opportunities. Students want more off campus study options (which in turn require more coordination staff on campus). Everyone wants campus safety - blue light systems, more security officers on campus, expenditures on things like buzzer systems when dorm doors are propped open, etc.</p>

<p>And, of course, everything (utilities, salaries, etc.) also goes up right along with the rate of inflation.</p>

<p>I am not excusing the colleges for this. But… if you want a cheaper college experience, forego many of the items listed above. A lot of our state colleges (especially the non-flagship sites) and junior colleges have not kept up with all these changes. And they are cheaper to attend.</p>

<p>Oh… and you have to pay a larger admissions staff to review what is 10 times as many applications as they had 30 years ago at many colleges. :)</p>

3

<p>For one, baby boomers and their children tend to be a bit spoiled. Many of them have bought into the ‘prestige’ aspect of education, insisting that if their child can’t get into that Ivy or Ivy-caliber school, then nothing less than a posh little private LAC will do. The state u is where the poorer, dumber kids go. (Obviously exaggerating a bit here.) Schools compete for those student and alum dollars by spending tens of millions of dollars on ever-fancier facilities. Even those modest state u’s now have country-club-caliber gyms, climbing walls and state-of-the-art science facilities. Yes it was a bubble and could be bursting real soon. </p>

<p>But I do think that CC world isn’t the real college world. The fact is, MOST kids go to their #1 choice, which is their state college or state university. Increasing numbers of them choose the community college route first. A relatively small percentage of the total population spends $200K on a bachelors’ degree. And my bet will be – in another decade or two, as the middle class in the US continues its downward slide – that number will be even smaller.</p>

4

<p>I know this is a really smaaaaaaaaaaaallll part of where the money goes, but I will never forget our tour of Cornell. The guide was most excited to tell us about all the clubs available and if there wasn’t one you were looking for, just ask and the school would fund it for you. He went on and on about how he belonged to the red m&m club and the best part was their activities were funded by the school. He was so proud of this and used this kind of funds available as a selling point as if the money was dropped from heaven. All I could think of was that it could be MY money funding this club?!?!? I know that is just a drop in the bucket, but at some point all those drops add up to a bucket of money!</p>

5

<p>Best I can do is guess. Chances are most employees aren’t getting rich on super-high salaries, and most institutions (at least the kind we discuss here) are not-for-profit.</p>

<p>So, technology. Hey it’s expensive to wire a campus, especially in a really old building, and keep up with the latest. </p>

<p>Costs. Employee health insurance, liability insurance, the gas bill, the light bill</p>

<p>Competition. Yeah, mostly on CC we talk about the same handful of schools that turn away the majority of students. That’s probably not the case with the majority of colleges. They compete for students. And it costs. You know all that stuff you see on the tours? The new apartment style dorms? The climbing wall? Somebody pays. And, of course, there are marketing costs.</p>

<p>Expectations. Students want. Remember your old dining hall? Were there “stations” for pasta, pizza, salad of the day? No way. We were super excited to get a deli line in the 80s, so we could have a sandwich at lunch instead of the standard 3 hot lunch choices. Well, it’s not just the dining hall. Students expect a lot of amenities and if you don’t have them, students vote with their feet.</p>

<p>Scholarships. No, full pay students don’t cover the cost for those on scholarship, but every full pay student is that much less that comes out of the endowment. And not every school’s endowment is fat. </p>

<p>In the case of state schools, decreasing state support. In the case of privates, decreasing state support in the form of decreasing amounts for state grants.</p>

6

<p>“We know that college costs rise faster than inflation.”</p>

<p>For prestige privates, we DON’T know that. In fact, for the top 10-20% of the population which is their prime recruiting ground, assets of this group have risen significantly faster than both college prices and inflation over the past 30 years. They are now less expensive than at any time since 1980.</p>

7

<p>It costs so much for the reasons you expect: Colleges are paying higher salaries to lure better talent. They build newer, nicer buildings with more technology in them and often build them greenly (which saves money in the long run on heating/cooling costs, but costs a little bit more up front for materials). They’re building nicer dorms and gyms to attract students. They’re paying more for higher quality food. They’re running big sports programs. THey’re sending more students abroad. They’re trying to entice more socio-economic diversity and also more international students (both of which require sizeable scholarship pools). There are new course offerings needed to meet new demands (how many universities worried about the size of their Arabic department or how many classes they offered in urdu 20 years ago compared to now?). They’re adding wi-fi to campus buildings, buying new things for the libraries (not just books, but DVDs now as well), trying to build attractive archives and art museums. </p>

<p>Whether or not we’re working ourselves into an inflationary bubble is hard to say, and certainly I think colleges and universities need to take a harder look at how to keep the costs lower even as they seek to increase enrollment. But to say that the product has not changed is incorrect. Whether the product has changed so much as to justify the increase in price is certainly debatable.</p>

8

<p>mini… you love repeating this often… "In fact, for the top 10-20% of the population which is their prime recruiting ground, assets of this group have risen significantly faster than both college prices and inflation over the past 30 years. "</p>

<p>Fact is it’s NOT true. Now if you said top 0.5 to 1% of wage earners it would be true.</p>

9

<p>For the vast majority of people, who will not be attending elite schools where large grants may be available to reduce the list price, college costs truly have increased faster than all of the important points of reference: the CPI, median income, and even medical costs.</p>

<p>For example, see [this</a> chart](<a href=“http://www.nytimes.com/imagepages/2008/12/03/education/03college.web.html]this”>The New York Times > Education > Image > Soaring College Tuitions).</p>

10

<p>Yes, the rich are getting richer and the poor are getting poorer. Except it’s the super-rich that are getting richer, and the “poor” are growing.</p>

<p>But for the super-rich; yes they may have billions now rather than only hundreds of millions, but they were always able to afford college.</p>

<p>It’s not like there’s reverse financial aid, where the rich have to pay more than standard price. They’ve always been in a position to pay for education, so it doesn’t really affect them. The people being affected the worst are the poor and working class.</p>

11

<p>Ordinary Lives, I totally disagree with you.</p>

<p>At the top – president’s salaries have gone way over the top. There are increasingly more administrative people. And inflation of job credentials. When I went to college, at a large university, the Dean of Students was a woman with a masters who had worked her way up from RA. At my DDs school, Dean of Students has a Phd. I certainly dont think a Ph.D should disqualify anyone for a position, but it seems that more and more often there are admin jobs which “require” advanced degrees for no particular reason.</p>

12

<p>Well, it’s not faculty salaries, which have been either declining or stagnant in real dollars for several years now, and below the pace of inflation for many years.</p>

<p><a href=“http://www.nytimes.com/2011/04/11/education/11faculty.html[/url]”>http://www.nytimes.com/2011/04/11/education/11faculty.html&lt;/a&gt;&lt;/p&gt;

<p>On the other hand, faculty and staff fringe benefits, especially health care, have become much more costly, and since salaries and benefits probably represent the largest single expenditure item at any college or university, the effect is significant. But obviously there’s more to it than that.</p>

<p>I don’t have a complete handle on the situation, but I’d point to a couple of things. First, at the most basic level of classroom instruction, it’s hard to make real productivity gains; or, perhaps more accurately, most of the productivity gains we can imagine (e.g., more students per professor, whether in the classroom or by distance learning or in overall student-faculty ratios) are generally construed by the consumers as diminution in quality. So there’s pressure at the elite and near-elite level to go in the other direction: to have fewer students in each classroom and a lower student-faculty ratio, which adds to the cost.</p>

<p>Second, a huge area of growth over the past 30 years has been in administration. Some of this may be in response to legal requirements; state and/or federal law requires colleges to have compliance officers and programs for this, that, and the other thing. But mostly I think it’s a response to consumer demand. Students want great study abroad options; someone needs to staff that. Students want more and better career services; that requires more and better (i.e., pricier) staff. Students and/or their parents want counseling and psychological services: more staff. Tech support: more staff. Multicultural programs: more staff. Writing support: more staff. Centers for this and that: more staff. At many schools there’s also been a proliferation of intermediate tiers of management, between the president and provost at the top, and deans and faculties at the bottom. This is not so much a response to consumer demand as it is a response to conflicting political, social, academic, and economic pressures on top-level administrators who feel they need help to do their extraordinarily difficult jobs successfully, and who may also want to create a layer of flak-catchers to insulate themselves from the daily onslaught.</p>

<p>Third, there’s also consumer demand for newer, shiner, more luxurious facilities. Faculty want better labs, but so do students. Students want state-of-the-art fitness facilities and eye-popping student centers and “dorms like palaces.” Colleges that decline to participate in this arms race get left behind in the competition for top students, and in their US News rankings. For its part, US News rewards lavish spending; the more a college spends per student, the better its “financial resources” index, an important component of every school’s overall ranking. And students (and their families) sometimes foolishly use price as a proxy for quality; there have actually been colleges that raised their tuition in order to fight the misperception that they couldn’t be as good as their pricier peers because the tuition was too low. </p>

<p>Fourth, I think the curriculum has gotten a lot more complex at many institutions. There are more majors, more departments, more faculty specialties than there were 30 years ago, and that requires more faculty, and more support This is perhaps more true at major research universities than at LACs, but even LACs keep adding programs in linguistics, and neuroscience, and Arabic, and whatever the major-du-jour is today. Again, partly a response to student demand, but partly colleges in a competitive arms race trying to steal a march on their competitors, driving up everyone’s costs.</p>

<p>What to do about it? Just start saying “No” and insisting on cheaper and more basic alternatives.</p>

13

<p>“…international students (both of which require sizeable scholarship pools)”</p>

<p>For most schools, international students are guaranteed full-play students.</p>

14

<p>Fact is it’s NOT true. Now if you said top 0.5 to 1% of wage earners it would be true. "</p>

<p>You’re looking at wages. I’m looking at ASSETS (which is what college tuition bills are supposedly paid out of.)</p>

15

<p>BC - This ITA. </p>

<p>At many schools there’s also been a proliferation of intermediate tiers of management, between the president and provost at the top, and deans and faculties at the bottom. </p>

<p>As to the reason, I would suggest a lot is inadequate review by Trustees in allowing this to happen. How many times does a president hire a crony? Is anyone watching?</p>

16

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<p>At least at top schools increased tuition is being used to offset loans in the Financial Aid with free money. Some one have to bear the cost of the generosity of the HMSPY and so full paying students are burden with the cost.</p>

17

<p>I suspect we will start seeing the return of the world of my parents. Very few middle class kids went to private schools.</p>

18

<p>We live in a litigious society and the costs and payroll of running a university reflect that. Go deep into the bowels of the administration of any big U and you will find lawyers, directors of risk management, and deans/associate administrators who exist to prevent or mitigate law suits as a full time job.</p>

<p>Slip and falls- date rape- suicidal sophomore- allergic reaction to a peanut in the dining hall- gender bias- too many male football players and not enough female lacrosse players… all of these engender lawsuits or the threat thereof. Insurance rates of all kinds have soared; the cost of hiring administrators who can keep the university off the front page every time there’s an incident keep going up.</p>

<p>“Back in the day” (the 1970’s) if you wanted a cup of coffee after 7 pm when the dining hall closed at my university you heated up a cup of hot water in your dorm room and poured in some Nescafe. Or went to the local gas station if you wanted it brewed. What kid in America today would attend a college without an espresso bar open all night (or at least until 2 am) with appropriate panini/snacks to go with it?</p>

<p>My roommates were athletes one year- they took Greyhound buses to compete, if they had an injury they either saw a doctor or sat on the sidelines until it healed, they ate junk food and ran or swam in the off-season to keep some muscle tone. Now they’d be taking private transportation, they’ve got a full time trainer/masseuse, they get nutritional counseling and one-on-one conditioning.</p>

<p>The market has spoken. Do you remember how utterly shabby college dining facilities used to be???</p>

19

<p>kayf, as long as a fair amount of them can go to public schools, that’s OK. My fear is that even the publics will be out of reach of the middle class.</p>

20

<p>The flagship at my U has athletic facilities that rival an Olympic village, 24/7 dining options, air conditioning in every new dorm, and a capital budget bigger than some third world countries GDP.</p>

<p>Don’t kid yourself that the arms race is confined to public U’s.</p>