<p>When I graduated from my Boston suburb private university in 1983
the all-in cost was $12,000. I picked up a $10k loan and did some student
work. I had the loan with its small payments paid off in a few years.
The BLS inflation calulator estimates that $12k in 1983 equates to
$29,000 today in buying power. How did pretty much every private
undergraduate program end up at over $60,000 a year? Some people
blame the student loans that were meant to help low income students.<br>
The argument is that just became more easy cash for the universities.
Was it demand? We just started sending every kid through college
because that's perceived as the only road to success? Was it competition
among the colleges to build ever more buildings and fund more research
and graduate programs and undergrad tuition was simply an afterthought?
Just curious what other folks on CC think was the root cause. </p>
<p>Market-based tiered pricing. Also an increase in inequality leading to more rich kids essentially demanding more amenities and hand-holding at top privates leading to a ballooning in administrators.</p>
<p>Government loan programs have not really changed in decades.</p>
<p>Rankings to an extent as well. The increase in average net price (after taking out financial and merit aid) has not really gone up much above inflation, but there has been more redistribution. Why has there been more redistribution? Because the greater increase in wealth of the top X percent makes them less sensitive to price, which means schools can use that extra money to buy better test-scores/students with merit and financial aid. Also an increase in intra-elite competition, which makes people think that an elite degree is required (and that is also tied in to widening inequality). Also more international students (willing to pay full-freight) making the top of the market less sensitive to price.</p>
<p>Agree with the above - plus the increase in government regulations in the past couple decades has led to the need to add staff and pay for training.</p>
<p>Another thought I had was the big stock run-ups in the dot-com era and today. Universities would have to compete for talent with the inflated salaries, stock options, stock purchase plans of private industry. </p>
<p>The effects of income distribution and foreign student cash-on-the-barrel-head are interesting. State-of-the-art facilities I’ve seen on the college tours. </p>
<p>I have to say that my donations to my alma mater feel more like I’ve enabled the 1% beast at this stage.</p>
<p>Tenure is a mighty enticing carrot. However, I have to say that smart motivated folks I knew from college and HS who pursued the academia route have been stuck in tenure-track purgatory when they likely would have earned a decent bit of money by now if they had gone in to industry instead.</p>
<p>In my mind, donations are mostly for rankings. </p>
<p>There’s been an awful lot of new building on college campuses in recent decades.</p>
<p>To be fair, fin aid for the poor has gotten better at a top handful of schools (back when I went, you had to take out loans even if your parents made nothing; now, some schools give all grants to some fin aid kids). On the other hand, fin aid has gotten worse at many more colleges. When I went to college, the Stafford loan, work-study, and Pell Grant was enough for everything at my state flagship (then and now above average in in-state tuition). These days, that package wouldn’t pay for a semester. That brings up another point: states in general have been cutting back on funding of their public universities. These days, VA contributes 6% of UVa’s budget. Tuition at the publics has had to rise to make up the difference, and the good public colleges have gotten wise about soaking rich OOS students who are willing to pay for the privilege of attending (back in the day, even OOS at universities like the UCs and many publics outside of UMich were a relative bargain; not these days).</p>
<ul>
<li><p>Abundant student loans</p></li>
<li><p>Facilities resort-ification to compete in USNWR rat race</p></li>
</ul>
<p>-Administrative staff bloat</p>
<ul>
<li><p>High tuition/ high aid pricing model</p></li>
<li><p>“Keeping up w the Jones” perception that high tuition price means high prestige & high quality</p></li>
</ul>
<p>Another factor is the expectation of “the college experience”. When I was in college in the late 70’s the cafeteria had two entree options, a limited salad bar, and two side dishes. The dorms had communal bathrooms, and one television on the main floor of the 13 story dorm. </p>
<p>Nowadays new dorms offer rooms with more plush furniture and private bathrooms. Dining halls offer all day eating opportunities with multiple serving stations, and all kinds of options. Student activities that are available through the schools themselves (often for free or at very reduced prices include trips to nearby cities and amusement parks and all kinds of other things.</p>
<p>Add that to the technological costs that we didn’t have way back then, and it all adds up.</p>
<p>I will give one example that illustrates the kind of changes that have occurred. (It does not tell the whole story by any means.)</p>
<p>One of the literature classes I teach requires a lot of 19th century novels that are not “popular” enough to persuade publishers to create audio versions. Several years ago, one of my students had a reading disability so severe that our ADA coordinator determined that s/he was entitled to audio versions of all the books. What to do? We paid a guy to read each of these books, totaling probably 2000 pages, into a microphone.</p>
<p>Sure, it’s an extreme case, but it NEVER would have happened 30 years ago.</p>
<p>Part of this is a desire for more “equity” - no one pays full price except for some of those with high income, AGI > 200,000 at many elite colleges. So inflated sticker price helps subsidize more diversity (full tuition need based scholarships for those with AGI < $80,000). And of course a significant part of college cost is labor cost - wages/salaries rose faster than inflation for many years. But the increase in cost is staggering.</p>
<p>In today’s dollars, inflation adjusted, Rice University cost under $8000/year tuition in 1980, only $24,000 in 1998 and 26,000 10 years ago in 2004 but is $39,880 this year (and that is cheaper (!) than many elite colleges). Inflation adjusted tuition is 50% higher than 10 years ago - and that tuition inflation rate is better than some (and Rice has also good financial aid which has increased).</p>
<p>Seems like a crazy system for pricing colleges in the US. Makes it very hard for students and parents to predict what is affordable, and the best choice financially especially given the atrocious graduation rates at some flagship public universities.</p>
<p>The one big change that will clearly have an effect is the rise of Coursera and equivalent on-line courseware. With well designed, rigorous on-line courses, with good lectures starting to be produced by leading Universities, especially over the last three years, this will have some long term effect on prices (perhaps allowing, even elite universities, improved labor saving efficiencies and slight reduction in cost).</p>
<p>I also wonder if some of the non-tuition related cost increase is related to pampering kids as @KKmama suggests. How many colleges have fitness centers on campus that replaced an old no-frills student gym? or have dorm rooms that are nicer than their room at home? or have nice buffet meals available each day, nicer than what they ate at home? … and certainly nicer than was typical 20 years ago in colleges …</p>
<p>@2018RiceParent I love coursera. I just started one from MIT to fill in some gaps on my computing knowledge. I just jumped into the profession without any technical college background and paddled like hell. Kind of interesting to learn what the heck I’ve been doing.</p>
<p>@KKmama:
It’s tied in to increasing inequality. Basically, the rich have become really rich, and their kids want furnishings and options that are far more than monastic and spartan:</p>
<p>@2018RiceParent:
You have the cause and effect wrong. College administrators have wanted to provide equal opportunity to the less well-off for generations now. But because the top 1% have done well (and top .1% have done even better), the elite colleges can afford to soak the rich more (and use the extra revenue to subsidize the poor more).</p>
<p>As you’d know if you study pricing, tiered pricing captures more of the surplus (while getting you the best student body in terms of quality possible).</p>
<p>Note that while sticker price tuition at privates has far outpaced inflation, it has tracked the growth of income of the top 1% very closely. Basically, the elite privates will always keep sticker price tuition where roughly half the student body is full-pay. So long as there is growing inequality and income growth of the top 1% far outpaces anything else, sticker price tuition will keep increasing at a fast clip as well.</p>
<p>Well income is much more volatile (taking big dips during the 2000 dot-com crash and recent Great Recession).</p>
<p>Also, income of the top 1% has grown faster than that of the top 5%.</p>
<p>Tuition has grown as if those crashes never happened.</p>
<p>Also, are you taking about Rice tuition? Because Rise starts from a low base. 20 years ago, their tuition was much lower than the other elite privates. Harvard tuition has grown by 50% over the past 10 years, for example.</p>
<p>38% rise in public school tuitions 2003-2014 (inflation adjusted)
23% rise in private school tuitions over the same period</p>
<p>Mean income (inflation adjusted) of the top 5% households rose at a similar rate to private schools for that period (most of the top 5% income is earned by the top 1% of course) but much lower than the rate of increase of public school tuitions.</p>
<p>The Chronicle of Higher Education also has a scary calculator which I just noticed which lets you pick individual schools and track their detailed tuition trends year by year from 1999-2010</p>
Kind of interesting to learn what the heck I’ve been doing.</p>