<p>We have a relatively fixed supply of colleges (many are over a hundred years old, at least). We have an echo boom in the college age population. For years, we’ve had a surge in female attendance. Chinese and Indian students now apply in large numbers.</p>
<p>So I’d attribute any inflation in college costs to supply and demand. As long as admit rates keep going down, prices will keep going up. Affluent families will keep filling half the spaces with full-pay students. Growing endowments will subsidize poor students. The middle class will be squeezed out (at more and more public flagships as well as private schools). Or else … this will turn out to be a bubble, too.</p>
<p>While many of the things mentioned contribute to cost–I think that bclintonk nailed it when he brought up productivity. For most businesses–the means of production bear little resemblance to production 50 or 100 years ago. But a college student from 1911 would feel right at home in a college lecture hall or seminar room today. Sure, today the professor will use a computer and projector rather than a blackboard–but the basic teaching methods and practices haven’t changed all that much. Higher education today is still largely hand-tooled. And that is very expensive. </p>
<p>We do have the technology today to vastly improve productivity. Today, one professor could lecure to millions of students simultaneously. But those methods–such as online education–are still largely shunned as vastly inferior. Someday. the skyrocketing costs will force universities to rethink this.</p>
<p>There are more and more references to foreign students in the media and here on CC. After 911 there was concern about getting student Visas but that obstacle didn’t slow the tide by much, and only temporarily. The fact is there are a lot of universities in the US - and there are a lot of high performing, technically oriented students in the world who would like to go to college. Until their country has enough slots to take all the talent their elementary and secondary schools produce, the affluent from other parts of the world will apply here.</p>
<p>I see this as a rapidly developing force in the supply/demand equation. I don’t think most US students are prepared to keep up with their foreign counterparts and there are anti intellectual attitudes in the US that threaten to undermine our best hope of maintaining our edge in world competition. The sense of entitlement doesn’t start with the kids - they have parents who think the US is unbeatable just because they wish it to be so - and regardless of the lack of support for education that is being marketed as fiscal conservatism.</p>
<p>College costs have risen at more than double cost of living for (at least) four decades now - which is true whether or not rich people are richer or weather is more unpredictable.</p>
<p>And didn’t you intend the late 90’s for your (bogus) point? (1980 was just before the 2-decade boom - not that it matters).</p>
<p>I think a lot of it has to do with artificially high demand, from a lot of sources. The marketing has lead people to believe that they “need college to succeed” (vs. trade schools/skills). College has also filled the primary education gap as remedial HS for many. The growth of financial aid has contributed - third party payers make folks price-indifferent. The aggressive packaging of loans has the same effect, unfortunately to the detriment of the students.</p>
<p>It seems on this thread and a lot of others the health care cost keeps coming up. HC costs not only increase college costs, but every sector of the economy. It is just so out of control that people are being priced out of the health insurance market. I suppose this really should be another entire thread, but it seems to touch on this issue as well. I read a funny, yet true blog pointing out some of the craziness that goes on in the world of healthcare (Healthcare Hullabaloo: Bizarro #6 – Back Seat Drivers). Maybe we need someone to do a blog on the craziness of college costs</p>
<p>Already, demand for spots in state universities is increasing, perhaps at least in part due to private university costs increasing rapidly. Meanwhile, state universities are facing cutbacks due to state budget problems.</p>
<p>As even not-too-special state universities become more expensive and more selective, more students go to community colleges instead; the community colleges now often have trouble handling the increased enrollment under fiscal austerity.</p>
<p>However, the world of the 1950s was one where few high school graduates eventually completed a bachelor’s degree at any university.</p>
<p>Increasing tuition at our state’s universities is due to the state legislature funding less and less, so students/parents must pay more and more. It is still a bargain compared to a private school, but it’s pricing the middle to lower class out of a flagship eduction. Meanwhile, families who thought 18 years ago that they would send their students to private schools are rushing to the state flagship because in the current economy, they can’t justify $40,000+ per year. </p>
<p>As for new facilities, at least in our state, new recreational facilities were funded by student fees, voted on by the student body before they were constructed. And new intercollegiate sports facilities were funded by private donations, not tax dollars.</p>
<p>I think this is grossly exaggerated. Last year our state flagship paid out a total of $889,000 in legal judgments and settlements. That represents about 3/100ths of 1% of its $2.9 billion budget. Virtually all that legal representation was handled in-house by the University’s own Office of General Counsel, a small, cost-effective, in-house legal shop that not only defends the University against lawsuits but also handles legal aspects of all the University’s contracting, labor negotiations and arbitrations, administrative compliance proceedings, internal investigations and disciplinary proceedings, technology commercialization and patent protection, real estate transactions, copyright and trademark protection, international exchanges, debt financing, purchasing, external sales, athletic compliance, other legal compliance, internal legal counseling and training, etc. All this for approximately $4 million/year spent by the Office of General Counsel, together with another $2-$5 million in outside legal services, for a total of less than 3/10 of 1% of the University’s budget. </p>
<p>Not trivial, you say. But here’s the rest of the story: over the past 5 years the General Counsel’s office has brought in more than $550 million in legal judgments and settlements, most of it intellectual property-based claims, suits to enforce charitable donations in wills, and litigation against the IRS for tax refunds. That’s an average of over $100 million/year in judgments and settlements in the University’s favor—a pretty nice return on an investment of $7 to $9 million in legal expenses. Not to mention the tens or hundreds of millions in non-litigated revenue streams the General Counsel’s office helps to arrange through intellectual property licensing agreements, contracts, etc. </p>
<p>So I’d be pretty hard pressed to say that litigation, the threat of litigation, and legal services represent a net drain on the University’s budget, or are in any way driving up the cost of education. Pretty much just the opposite of that. </p>
<p>Now if you want to define the job of every equal opportunity compliance officer, every contract compliance officer, and every risk manager as “exist[ing] to prevent or mitigate lawsuits,” I suppose you could arrive at a different set of figures. But that’s a pretty extreme view. Avoidance of lawsuits is, of course, part of what these people do; it’s part of what we all do, every day, every moment, in every walk of life, by observing the law, not needlessly exposing others to danger, and so on. But most of us would say we follow the laws and administrative regulations, abide by our contractual obligations, and not expose others to avoidable risks because it’s the right thing to do, not because we live in constant fear of lawsuits. Same goes for colleges and universities.</p>
<p>A lot of great points on this thread, which I largely agree with. I just want to add a few points:</p>
<ol>
<li><p>It’s well known in the industry that tuition signals quality. The best way to make your program or school look stronger and better is to have higher tuition. As I’ve personally witnessed in my own school, the demand for our program skyrocketed the year we raised tuition a double digit amount (and it has not ceased).</p></li>
<li><p>Gigantic investments in wooing students and their parents that may be education related, or maybe not. This appears in the form of infrastructure. staff and facilities: from fancier buildings and smart classrooms, to small class sizes, more facilities for those with learning disabilities, cutting edge technology, manicured gardens, honors colleges, study abroad, coops, fantastic gyms. All the competitive trappings of what makes ‘college life’ better at one place over another. </p></li>
<li><p>Investments in marketing. Be it adverts, brochures, tours, emails, communications with prospies, open days, processing of a million more applications garnered from all the advertising, and all the behind the scenes game playing that goes into moving up in the rankings. </p></li>
<li><p>Salaries. I think more senior administrators make a lot more than they used to! What was that headline recently about the Presidents over a million, even at smaller colleges? How about Deans? And many more administrative staff are probably employed now. And while salaries might look stagnant across the board, there are big salary differences by school and field. Private schools and professional schools, at the higher end of the spectrum, also set the tuition standard it seems. In my field- which I realize is not representative - teaching loads have gone wayyyy done and salaries have gone dramatically upward in the past two decades. </p></li>
<li><p>Costs of research. We often picture the classroom as the center point of universities, when often it’s the research facilities and labs, especially in the hard sciences. I just cycled passed our new aqua-ecology research laboratory this morning. How many millions outside of grants and fundraising did that amazing facility cost? How much to hire those post-docs, staff, and world reknowned scientists to run it? How about the new medical research building? The national laboratory for particle physics? The new chemistry building? And on and on. </p></li>
</ol>
<p>Not that I think all these factors justify the increase, but they probably play some role. </p>
<p>Though for what it’s worth, tuition up here in Canada (and the overall cost of education from the public purse) has not increased at all like tuition in the US. We have faculty who are on average paid higher than US faculty, we have world class research facilities, our students come out very well prepared for graduate school and work…and the total cost of attendance is around $15k a year.</p>
<p>Per the colleges that endorse new club, I like that idea. Small investment. Kids socializing over red M&M’s… beats a lot of the college hobbies/vices that we read about.</p>
<p>*
In college education, the service has not changed much in 35 years*</p>
<p>Oh yes it has…technology advances require much more expensive equipment in the classrooms and labs.</p>
<p>And, campus security demands have risen. Schools now employ full time police force, have security cameras everywhere, have police patrolling everywhere, dorms/buildings have security beefed up. </p>
<p>Schools have tram systems and other niceties…better fitness centers and such…MUCH nicer dorms and dining halls…free tutoring and other support groups.</p>
<p>*Increasing tuition at our state’s universities is due to the state legislature funding less and less, so students/parents must pay more and more. It is still a bargain compared to a private school, but it’s pricing the middle to lower class out of a flagship eduction. Meanwhile, families who thought 18 years ago that they would send their students to private schools are rushing to the state flagship because in the current economy, they can’t justify $40,000+ per year. *</p>
<p>Yes, and many families who always thought that their children would go to their state flagships are finding them to be unaffordable as well. While it may seem “cheap” to spend $20-25k per year to send a child to a state flagship, if the family has 2-4 kids, then that can be several hundred thousand dollars to get them all thru. For those who earn too much for “free aid,” but not enough to pay full freight, even a state flagship can be out of reach. </p>
<p>For many, simply having an EFC of $5k or more can mean no free aid at some state schools.</p>
<p>"Though for what it’s worth, tuition up here in Canada (and the overall cost of education from the public purse) has not increased at all like tuition in the US. We have faculty who are on average paid higher than US faculty, we have world class research facilities, our students come out very well prepared for graduate school and work…and the total cost of attendance is around $15k a year. "</p>
<p>Does Canadian government give financial support to the universities? Any idea how much? US States provide between 6 and 15% of operating funds to big universities as I understand it.</p>
<p>I’ve worked at a public university for almost 12 years. Almost every year our funding has been cut by the legislature. No employee has received a raise for the past 3 years. At the same time, our health care costs have risen, so basically we have taken a pay cut. The university has a policy to subsidize part of employee health care costs (on a sliding scale based on employee income). I’m in one of the higher brackets and I pay over $800 a month for health insurance.</p>
<p>We have also lost our ability to attend educational conferences due to budget cuts. Computers are replaced on a 6 year cycle (used to be 3-4 years). My job requires some high computing power and I often have to wait quite a while for my computer to handle what I’m doing; one of my co-workers has me do some of her queries because her computer shuts down when she attempts it.</p>
<p>We have to pay a lot of $ for technology - things like the ability to register on-line, apply for admission on-line, retrieve your grades on-line, pay your bill on-line - have annual fees to technology vendors, plus hardware like servers, plus other payments to infrastructure software/hardware, etc. We have various offices requesting technical assistance that would require more technology purchases and we can’t fit it in our budget. Our department also has a freeze on hiring. One of my co-workers left and the rest of us had to pick up the extra duties. I found out that a neighboring university has 9 people doing my job - no wonder I am always snowed under. </p>
<p>Luckily, most of our scholarships for our students comes from our endowment association. While it has taken some hits with the economy, it is still in fairly good shape and scholarship dollars have increased. However, federal and state funding for some programs has been cut so students are losing some of that money.</p>
<p>The way our budget is structured, designated university income has to be spent on infrastructure (not permitted to be diverted to salaries or other costs), so we are fortunate that our maintenance has not been neglected. Some neighboring public institutions have a different budget structure and their buildings are crumbling and they literally have to block off sections near buildings so students don’t get hurt by falling debris.</p>
<p>Big snow storm? More costs incurred for snow removal. </p>
<p>I could go on but I think you get the picture - right now a state legislator is mad at us and wants to cut our funding literally in half. Hopefully this won’t pass, but if it does I have no idea what else we can cut.</p>
<p>I understand that IT costs have gone up at colleges, but I am confused - havent they brought efficiencies? Less personnel costs? I would have thought that colleges, like the business world, could decrease the cost of personnel that previously did things without automation (eg registatration, admissions). I realize that there will also be some humans needed, but I would have thought there would be some effeciencies.</p>
<p>Many good points here. I wonder how much insurance has risen for schools. All you need is a few lawsuits over alcohol poisoning or other tragic issues and costs rise dramatically. </p>
<p>One of my friends attended a college open house, and the potential students were amazed that her alma mater, located in Massachusetts, didn’t offer air conditioned dorms. It was a deal breaker for some. As the kids get pickier, the costs rise for each school to be competitive.</p>
<p>Well, a lack of air conditioning is actually a safety issue for a young woman who might be on the first or second floor and forced to leave her window open. I would be very uncomfortable with that scenario, myself.</p>
<p>I really think it is simple supply and demand, with the demand also fueled by the easy availability of loans. The same number of people are currently getting undergrad degrees as were getting high school educations when WWII started. The loans exacerbate the cost issue, but as long as the demand is there, it’s just Econ 101.</p>
<p>Kayf, I think there is some reduction in personnel and other savings due to technology - for example, we have phased out the printed schedule we used to produce each term for registration. It was out of date before it was even printed, and we have an online version that is not only up-to-date but also is in a format that the student can print themselves if they want. They can even do a search first and refine the results and then only print that section.</p>
<p>However, we also have a huge demand for services which require people. Just because a student can register on-line doesn’t mean they don’t go to the Registrar’s Office to get a transcript. Or even if they request an official transcript on-line and pay for it on-line, an employee still has to process the request. Just because something happens online doesn’t mean that human intervention is not required. </p>
<p>When we used to release financial aid refunds, there would be a huge line snaking around the corridors while students waited. Now we offer the ability to have direct deposit. But our Business Office found that they were still just as busy - no long lines, but a steady stream of students who have sometimes complex situations and questions that cannot be handled with a simple FAQ posted on a website. </p>
<p>My current position was created when we implemented our administrative software system. At some point you might think when we finished implementation my job would be done. Except we have required upgrades, new features to implement, new leadership who sometimes change prior policies (which requires translation into the software), training for new employees, support for departments, etc. The system itself is not static: annual budgets, salaries/benefits and higher health care premiums so paychecks come out correctly, new course offerings, consolidation of academic departments, etc. - all that ends up requiring people to enter/program/trouble-shoot system errors.</p>
<p>Good question. Almost all the schools are public and so supported by each respective province directly, though this clearly not the full source of funds (e.g. our federal research grants play an important role). </p>
<p>What I found on the provincial govt website is that they claim to currently provide $10,000 per full-time student (an increase from 8,440 in 2001), the average tuition is $4800, and that this tuition covers 1/3 of the cost of their education. Apparently $1.9 billion was “the amount invested in support of post-secondary education” last year, and that supports 202,000 full-time students across 25 colleges and universities. (take all with a grain of salt as this reads not like an official audit, but rather as a promotional advertisement by the currently elected govt).</p>