Just because students can borrow more, they keep raising the price?
I’ve never understood this logic. Recently, the fed put limits on the amount undergrads can borrow and stopped the guaranteed student loan program through private banks. How did making subsidized loans less available and capping the amount that can be borrowed an “expansion?”
There is no “simple reason.” There are several complicated interrelated reasons for the rise in college costs. Some of these reasons are not unique to educational institutions (i.e. costs of complying with regulations, employee benefits costs). Some are (increased student and parental expectations of what services a college should provide).
Agree with NJSue that student expectations have increased. Just listen to them.
Immediately after the 2008 crisis, my U aggressively went after back room costs, reducing staff, hours, budgets, and extras, changing the structure for salary increases among faculty and staff. It’s true there are new hires, some at generous salaries, but generally related to the mission or bringing in funds. An external committee dictates more than many are comfortable with.
Consider what you and your own kids want in a college, who fusses over dorm amenities, food quality, the gym, security, intramural sports, shiny labs, career services that hold hands, etc. It’s complicated.
Supply / demand situation as with any other product / service.
Dorms and food are separate itemized costs. They really have stayed little closer to being real numbers compared to tuition which seem to have jumped up 5% year over year every year.
That may be family costs, not cost of operation.
Student loan is definitely a very significant factor in driving up the tuition. The other is the reduction of state funding for state univerities. The third is expansion of bureaucracy of virtually all schools.
@texaspg Yes I believe this is correct reasoning. A few years ago asked a Stanford Board of Trustee Member why tuition cost had gone up so high and this is the exact reason that was given to me. I was surprised at the time but have since done research and do believe this is absolutely the driver. Consumers then buy into the crazy idea of paying $250k+ for an undergraduate education at these institutions. Guessing once the Millennials get political power they will change this for the next generation–or at least hoping so.
Let’s not forget financial and school paid merit aid. A larger and larger portion of students receive assistance which drives up costs for full pay families. What is more amazing is the huge disparity in prices for an essentially similar service. Families with low(er) cost alternatives are sending their children to cheaper institutions ; witness the lower admission rates and higher yields for in-state flagships. A few years ago upper middle class families would not hesitate to send their children to full pay private schools, now they are considering the value option.
Stanford 2005-2006
2005-2006
Tuition $31,200
Required Fees $425*
Room and Board $9,932
Room Only $5,275
Board Only $4,656
Total direct to Stanford - 41,557
Stanford 2015-16
FIRST-YEAR UNDERGRADUATES
Tuition $45,729
Required Fees $591
Room and Board $14,107
Room Only $8,346
Board Only $5,761
Total direct to Stanford - 60,427
An increase of 45% over 10 years.
That increase in Stanford costs is far greater than can be explained by government student loans and grants.
I agree that there is no “simple reason” for the increase, and that several factors are at play. I have in the past included this link to a study which suggests that price discrimination is one of those factors at play, with “sticker price” increases serving to have full-payers subsidize financial aid packages, while net costs adjusted for inflation have not increased as dramatically.
30 years ago when my sister attended medical school, the cost was $3,000 a year. Now the cost of attending medical school is between $40,000 and $75,000 depending on the school and in-state versus out of state.
I think for state medical schools the prime reason is that the state no longer provides as much support as it did in the past. So medical students must take out loans of $200,000 accruing interest from day one to attend. So fewer medical doctors can afford to go into rural practice or family practice as they have to pay off the crushing debt. So the country has fewer family practicioners or doctors in rural areas. So there are programs to subsidize those who will. So it goes full circle.
“The third is expansion of bureaucracy of virtually all schools.”
It’s cute to call it bureaucracy. Meanwhile, woe be to the college who doesn’t have a well maintained and continuously updated web site, Facebook and Twitter, not only for itself but for “subgroups” (the athletic teams, the art museum, etc) - versus in our day, where a mimeographed newsletter went home with the tuition bill. Woe be the college that can’t accommodate kosher, gluten-free, etc dining - versus in our day, where you got the slop and you ate it. Wow be the college who doesn’t have a full complement of advisors for career counseling and studying abroad - versus our day when it was a book of resumes and brochures with a sign-up sheet, and studying abroad was exotic.
^^^ exactly! I took a quick look at the website of DS’s school, and in addition to those above, there is the Diversity staff, International Students staff, Band and Spirit staff, Title IX staff, and the list goes on and on…