<p>It’s interesting that the top universities and LACs charge practically the same amount, no matter where they are located, when costs to the schools cannot possibly be the same.</p>
<p>Perhaps they charge… what they can?</p>
<p><a href=“The Price of Perception - The New York Times”>The Price of Perception - The New York Times;
<p>^^^^^^^ bingo</p>
<p>It’s been argued that the top schools (HYPSM) should actually charge more than they currently do because their education is “worth more”. I tend to think that the cost of operating a private college is similar across the country. You need a certain number of teachers, dorms, admin, class rooms, etc. which don’t vary significantly in cost.</p>
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<p>I don’t think this is right. Land costs vary enormously from market to market and by location within major metropolitan markets, and construction costs vary substantially by region. For Columbia or NYU to add dorm or classroom space is going to be ridiculously expensive; other places it will be comparatively cheap. (Probably one major reason, along with differences in food and labor costs, that a year’s room and board at NYU costs $15,182, almost exactly twice as much as a year’s room and board at Earlham, $7,570). Labor costs vary by locale; with the exception of faculty and top administrators, most college and university jobs are pretty low-paying, but how low depends a lot on wages in the particular job market, as well as whether the workforce has a union contract. Even faculty salaries vary considerably; the average full professor at Harvard makes $198,400, while just a few miles away at Brandeis the average full professor makes $130,000–so the Harvard professor is making 53% more than her Brandeis counterpart. Most professors at LACs make even less; at Oberlin, the average full professor makes $113,100; at Earlham, $78,800. </p>
<p>And while it’s true that every college or university needs “a certain number of teachers,” that “certain number” varies from school to school. Princeton thinks it needs 1 professor for every 6 students; Carnegie Mellon thinks it can get by with half as many, 1 for every 12 students (and since Princeton also pays its professors considerably more, we can surmise that Princeton’s faculty costs per student come out higher than Carnegie Mellon’s by roughly a factor of 3). Health insurance is a huge cost item in college and university budgets; its cost varies considerably from one market to the next. Energy costs vary by region (electricity costs more than twice as much per kWh in New York as in many Midwestern states), as does energy usage which also depends on the energy-efficiency of the campus infrastructure. Library costs vary considerably, depending on the school’s holdings and the library services it provides; a 2007 study found that the top third of US News-ranked LACs spend nearly 3 times as much per full-time equivalent student on libraries, compared to the average for all LACs; private university library spending probably varies even more, though I don’t seem to be able to find figures. Then there’s the cost of labs and other research facilities; STEM-heavy colleges and universities are going to spend far more on this stuff than are humanities-oriented schools. Oh, and the athletic department; Northwestern, which competes in the Big Ten (well, at least they’re *in *the Big Ten), shells out about $15 million/year in athletic scholarships (265 scholarship athletes at $57K per), an expense item that many other private colleges, e.g., the Ivies and Div. III LACs, don’t have. And of course, we all know that how much of their own money schools spend on need-based and merit-based financial aid varies enormously; Harvard’s need-based financial aid spending per student is nearly 4 times that of NYU.</p>
<p>I just don’t think there’s very much of this that is standard, at all. The budget categories would be pretty uniform, so that a financial officer or college president could move to almost any other college and immediately grasp the budget; but the expenditure amounts would vary by school in almost every category.</p>
<p>[Hechinger</a> Report | Student subsidies of classmates? tuition add to anger over rising college costs](<a href=“http://hechingerreport.org/content/student-subsidies-of-classmates-tuition-add-to-anger-over-rising-college-costs_9333/]Hechinger”>http://hechingerreport.org/content/student-subsidies-of-classmates-tuition-add-to-anger-over-rising-college-costs_9333/)</p>
<p>Not everything in this piece is 100% accurate, but it does shed some light about costs vs revenues.</p>
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Priceless!</p>
<p>^ Not sure how internationals “subsidize everyone” to a greater degree than full pays at private schools? What am I missing?</p>
<p>The hechinger report- they’re funded by Gates/Broad/Lumina et al. right?</p>
<p>He lost me after complaining that grad students cost a lot more, etc etc because of profs and fewer students per class. Duh, did they NOT forget to consider grad student ‘wages’ into the equation? or grants / contracts that may be paying for faculty AND grad students?</p>
<p>It is a puzzle. I’ll supply a few stats (source is Congressional Budget Office):</p>
<p>College costs are increasing abnormally. From 1979 - 2005 (if I was ambitions, I’d use 1979 to now, but since this was the data in front of me…)</p>
<p>aftertax household income of the 80th percentile of households rose from 35k to 172k (390% increase) while after tax income of the 60th percentile from 20k to 70k (250% increase). This is in actual dollars, not inflation-adjusted.</p>
<p>In the same period, Harvard tuition increased 460%, from 5k to 28k. I don’t know about fees or other components of COA.</p>
<p>Curiously enough (for all the blaming of Federal loans), if you peruse this chart </p>
<p>[InflationData:</a> Education Inflation](<a href=“http://inflationdata.com/Inflation/Inflation_Articles/Education_Inflation.asp]InflationData:”>http://inflationdata.com/Inflation/Inflation_Articles/Education_Inflation.asp)</p>
<p>you see that the rate of increase was very stable up to about 2001, thought the Federal loan programs were liberalized in 1992. Wonder what happened in 2001? Food for thought. It clearly isn’t rising incomes or faculty salaries that are driving the price increases.</p>
<p>Those income figures are not credible, StatBeast. According to the U.s. Census Bureau, 80th percentile household income in 2010 was $100,065, about where it had been for 4 years. Anything above $180,810 put you in the top 5 percent. Sixtieth percentile household income in 2010 was $61,735, again just slightly off the 2008 peak.</p>
<p>Hi bclintock. It is my mistake. I had in my notes the data as quintiles (not percentiles). In a stat course the first quintile would be 20th percentile, etc., but in BLS talk a quintile is the average income of that 5th of the population. So instead of 80th percentile, I should have said average income of the top 20 percent of the population. Similarly, fourth quintile is the average income of the 60th through 80th percentile.</p>
<p>It’s purely supply and demand. Imagine a world where GM turns down more than half the people who come to the showroom with cash or a line of credit on hand, simply because they don’t have enough cars to satisfy everyone. What do you think is going to happen to the price of cars? Compared to many other industries, colleges have the luxury of having their customers have ready access to money in the form of loans.</p>
<p>Even with the constant dramatic rise in college costs, they still claim that the tuition/fees don’t cover the cost of a student’s attendance.</p>
<p>^ The question is, if true, does that have to be the case?</p>
<p>In the article I linked to, a former university president, says</p>
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</p>
<p>No matter how big my house or my purse, is I can still find ways to fill it.
No matter how large my budget is, I’m sure I could still find ways to spend it.</p>
<p>As long as there is demand for what the colleges are offering, with or without loans & discounts, not a lot of incentive for schools to offer a Melba toast version.</p>
<p>When it isn’t unusual for a pair of women’s jeans to cost upwards of $100, and a families phone bill to run upward of $ 150, why are we surprised that a college degree will be a minimum of $100K?</p>
<p>Is it possible that college fees are increasing because donations and grants are decreasing ?</p>
<p>^ definitely not at the top schools. Can’t speak for lower ranked schools.</p>
<p>CJaneRead: re: “Not sure how internationals “subsidize everyone” to a greater degree than full pays at private schools? What am I missing?”</p>
<p>Isn’t it because international students don’t pay federal or state taxes?</p>
<p>^ Well, all the more on how they are NOT subsiziding everyone. At private schools internationals don’t pay more than U.S. full pays and at state schools they don’t pay more than OOS full pays, and they haven’t paid into the system as taxpayers.</p>