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The Real Reason College Tuition Costs So Much

182 pointsby colincslabout 10 years ago

22 comments

reuvenabout 10 years ago
American universities aren&#x27;t just about education. Or even research, for that matter. They&#x27;re often about providing a &quot;life experience&quot; for undergraduates. So you have a huge investment in sports, entertainment, and living facilities that are basically unheard of in other countries. Plus, all sort of administrators and advisors who help students in a variety of different ways.<p>These add up to a great experience, and arguably make the education better. But they also reflect how little the US government provides vs. other countries. And how much students depend on the university to provide services that in other countries would be provided by other agencies. And how an American university is expected to provide much more than just classrooms, lectures, and research.<p>I graduated from two American universities (MIT and Northwestern). Each of these had an on-site medical facility (unnecessary in countries with nationalized health insurance), financial aid offices (unnecessary in places where the tuition is lower, or handled by centralized government agencies), student-only shuttle services (unnecessary where public transportation is good), sports teams (unheard of outside of the US), and a wide variety of extra-curriculars (again, basically non-existent outside of the US). Each of these requires a bunch of administrators.<p>The building in which I did my PhD had a huge support staff. In an Israeli or European university, I think that the 15-20 secretaries, planners, and managers would have been replaced by 3-4 people. Overworked and underpaid people, mind you, but that&#x27;s how you keep costs low. And my office (as a graduate student) in the US was positively opulent compared to what you&#x27;ll find abroad.<p>I used to think that student aid in the US was a great thing. But I do believe that American universities have basically decided that they can raise tuition without any penalty, because almost no one pays that sum out of pocket -- and everyone else just takes on crushing debt for many years to follow.<p>Now, the fact is that I had a blast in my undergrad years, and my experience editing the student newspaper led directly to my current career. But having met many students and graduates in Israel (where I live), where universities are places to learn and do research, rather than have &quot;life experiences,&quot; I&#x27;m not at all convinced that the added expense and overhead are worthwhile.
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snogglethorpeabout 10 years ago
One thing I&#x27;ve noticed about American universities compared with universities in other countries (Japan, Korea, UK), is that almost every decent American university I&#x27;ve seen seems to be <i>really</i> well-maintained, in that the campus is very clean, in good repair, frequently renovated, etc, even the out-of-the-public-eye spaces (grad student offices and the like).<p>Japanese and Korean universities, on the other hand, are often rather shabby, even the top-tier ones (Toudai etc). They&#x27;re still perfectly fine places for the intended purpose, mind you, just maybe a little worn.<p>I dunno how much of a part money maintenance and construction play in university costs, but I imagine it&#x27;s labor-intensive, and so not exactly cheap...
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Animatsabout 10 years ago
The short version: <i>&quot;A major factor driving increasing costs is the constant expansion of university administration.&quot;</i>
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ForHackernewsabout 10 years ago
Part of it is also a social signaling factor. Because eduction is a superior good and a positional good, there&#x27;s pressure for it to get ever more expensive (at least on paper). After all, if the Johnsons&#x27; kids are going to a $40,000&#x2F;year school, you want to make sure your little darling goes to at least a $45,000&#x2F;year school.<p>The secret is that many elite colleges give such generous financial aid that only the extremely wealthy are paying full freight. But it still makes the college looks good to have an astronomically high sticker price.
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graycatabout 10 years ago
The OP keeps talking about the <i>tuition increases</i>. But as far as I could tell, the OP was considering only, call it, tuition <i>list prices</i>. But, with scholarships, various forms of <i>financial aid</i>, etc., maybe often the <i>list price</i> is not the <i>actual price</i>, that is, what the school actually receives from the student (and their family). So, the OP didn&#x27;t explain how much the <i>actual price</i> has changed over the decades.<p>E.g., recently Stanford announced that the tuition will be $0.00 for any student whose family earns less than $125,000 a year. Sure, maybe the <i>list price</i> tuition at Stanford is ballpark $50,000 a year. But the <i>actual price</i> is sometimes zero. And some scholarships also cover room and board making the <i>actual price</i> negative.<p>It was long the case that the tuition for a student paid only ballpark 1&#x2F;3rd of the full school budget per student. So, maybe what&#x27;s happened is that the schools decided to set the <i>list price</i> to be the full cost per student, maybe plus some, and have students from wealthy families actually pay that price. Then nearly all the rest of the students get a significantly lower <i>actual price</i>, maybe even $0.00.<p>Further, given that there are student loans available to cover the <i>list price</i>, then maybe just go ahead and charge list price for students using student loans.<p>Then we have the issue of, with so many students getting student loans, maybe they are not very good students and wouldn&#x27;t even have been accepted at the school back decades ago. Maybe. Or, if some money sources are eager to pay or loan <i>list price</i> for some not very good students, then colleges can be tempted to go ahead and take the <i>list price</i> easy money and let the students attend the classes.
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pacifistabout 10 years ago
It didn&#x27;t make sense to me until I read this:<p>from the article:<p>&quot;Some of this increased spending in education has been driven by a sharp rise in the percentage of Americans who go to college.&quot;<p>from the comments:<p>&quot;The money PER STUDENT was slashed. That is what matters for the cost to each student.&quot;… &quot;This is an elaborate lie, to justify what is indefensible without the help of such lies.&quot;
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MCRedabout 10 years ago
I think a more interesting question is, how has the ROI of college changed over the past 40 years?<p>The cost has gone up much faster than inflation.<p>The number of people going to college has also risen dramatically. This means there are a lot more college educated peers competing with you in the workplace. This means that the college degree is not as rare, and thus has lower scarcity value.<p>Finally, I think it&#x27;s quite possible the quality of the education has declined significantly in the past 40 years. When I was in college, almost 30 years ago, I was appalled at how the university focused and spent so much of its money on a losing football team (in a zero sum situation where the other schools were always going to be abel to massively outspend it and had larger pools of students to recruit from) ... and in the decline in the education. I remember sitting in a class and learning about how universities were started by tradesman who banded together and hired experts to teach them, and I thought &quot;Man, I wish I could go to a school like that&quot;. Since then I&#x27;ve seen nothing but an increase in these efforts... I&#x27;ve see the quality of a CS degree (based on the people who I interview for jobs who have them) decline.<p>So the formula is: More Cost, Less Value, Lower Quality = Lower ROI.<p>If things don&#x27;t turn around, at some point College will be a losing proposition.<p>Of course, this presumes that the education colleges give can be obtained elsewhere.<p>Which brings up another point MOOCs, and online access to open source frameworks have really changed things in the past 30 years. 30 years ago we were buying our compilers (CodeWarrior for life!) now they and our frameworks are open source and well documented. The books are cheaper-- $40 to Oreilley rather than $120 to the campus book store (or are my prices out of date?)<p>You can learn more modern technologies better than going to college and spending 4 years on Java and C++.<p>Then there&#x27;s the MooCs. you can learn CS fundamentals by video, along with people all around the world.<p>I think we&#x27;re close to that tipping point.
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beachstartupabout 10 years ago
what they taught me in econ 1a:<p>1. limited supply (even when you count the fake for-profit schools)<p>2. increased demand (EVERYONE wants to go to college)<p>3. easy financing which increases 2. (student loans)<p>results in inflating prices.<p>not really sure what the mystery here is.
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kelukelugamesabout 10 years ago
Going to plug Bill Gates&#x27; recommendation again. I enjoyed reading and thought the data was eye opening.<p><a href="http:&#x2F;&#x2F;www.trustmedia.co&#x2F;test&#x2F;Books&#x2F;Why-Does-College-Cost-So-Much.html" rel="nofollow">http:&#x2F;&#x2F;www.trustmedia.co&#x2F;test&#x2F;Books&#x2F;Why-Does-College-Cost-So...</a>
m3talridl3yabout 10 years ago
Someone needs to build a &quot;spartan&quot; college. Use the cheapest construction materials+. No sports teams++. No extracurricular activities+++. No degrees that aren&#x27;t in STEM.++++<p>+ - Does the round glass section contribute to learning in some way? What am I missing? <a href="http:&#x2F;&#x2F;newsroom.unl.edu&#x2F;releases&#x2F;downloadables&#x2F;photo&#x2F;20120914CBAdraw3.jpg" rel="nofollow">http:&#x2F;&#x2F;newsroom.unl.edu&#x2F;releases&#x2F;downloadables&#x2F;photo&#x2F;2012091...</a><p>++ - If your sports team starts to win, people will wonder why your crappy 10-year-old sports stadium hasn&#x27;t been demolished and rebuilt. It&#x27;s 10 years old already! We need at least 30% glass panel coverage on the exterior! Get with the times already!<p>+++ - You want a robotics club or a harry potter reading club or a javelin-throwing club? Fine, but find your own funding.<p>++++ - If you really think you&#x27;re the gods&#x27; gift to mankind when it comes to ancient Egyptian art, then by all means, get admitted to an ivy-league-status establishment. The last thing the world needs are more junior-league art majors.
kyleredabout 10 years ago
I wrote a post about this same issue a year ago. It&#x27;s sad that debt is fueling the growth of administration staff.<p>Some interesting charts are here:<p><a href="http:&#x2F;&#x2F;kylethered.tumblr.com&#x2F;post&#x2F;37790176790&#x2F;data-says-higher-ed-destroying-value-by-passing" rel="nofollow">http:&#x2F;&#x2F;kylethered.tumblr.com&#x2F;post&#x2F;37790176790&#x2F;data-says-high...</a>
cm2187about 10 years ago
I would say quantitative easing has a lot to do too. It didn&#x27;t create the broad inflation everyone expected. Instead some sectors went into high inflation: housing, stocks, tuition fees, etc.
marincountyabout 10 years ago
The real reason college tuition costs so much=because they can!<p>(Most schools found that students&#x2F;families will find ways to come up with the money. These schools will blame everyone, and everything, but they still raise tuition. When questioned, they brag about the scholarships. I understand some state schools, but really question schools like Haarvard with a billion&#x2F;year coming in through endowments.)
adrusiabout 10 years ago
<p><pre><code> &gt; For example, the military’s budget is about 1.8 times &gt; higher today than it was in 1960, while legislative &gt; appropriations to higher education are more than 10 &gt; times higher. </code></pre> This isn&#x27;t the relevant statistic. I&#x27;m going to guess that the size of the national student body has increased since 1960, and I wouldn&#x27;t be surprised if it was by more than a factor of ten.<p>I&#x27;m not saying that therefore lack of government spending is the cause of high tuition, but this article dismisses it too quickly.
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brianbreslinabout 10 years ago
My father is a university administrator, and he told me this theory years ago, that the costs were due to excess bureaucracy.
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gueloabout 10 years ago
One of the big crimes of these administrators is that it&#x27;s so hard to get accurate numbers when trying to have this debate. Has the funding per capita gone down proportionally to the tuition increase? Is the increase in administration and facilities proportional to the increase in enrollment?
mellingabout 10 years ago
We should all try to remember this because it&#x27;s not what we&#x27;ve been told:<p>&quot;What cannot be defended, however, is the claim that tuition has risen because public funding for higher education has been cut. Despite its ubiquity, this claim flies directly in the face of the facts.&quot;
endzoneabout 10 years ago
as he admits, per capita funding has indeed fallen. the problem is an over expansion of higher education. what proportion of the population can really benefit from a full time residential degree course? much less than 50%
chucksmartabout 10 years ago
&quot;Entrenchment of the bourgeoisie&quot;
bawanaabout 10 years ago
the same malady affects health care. corporate-itis
chisleuabout 10 years ago
I find it interesting that the article takes every step except for the very last one.<p>The increase in public funding of universities has inflated the enrollment, decreased the quality of education, and increased the pricing by allowing sub-par schools to survive.<p>In any economic situation, an increase in the quantity of money trying to consume a restricted quantity of resources increases the price. This is an economic fact. How does the article simply make the point that the increase in public funding isn&#x27;t why the costs have increased but not even bring up the correlation between the increase in funding and the costs going up??<p>If we have 100 apples of production a year at the current price, and someone comes along and gives people who want apples some money to buy apples, the apple seller can increase the price without much resistance. Everyone who wants apples pays more because the money in this market is inflated.<p>Government has inflated the market. As a 34 year old college senior about to graduate with honors, I see this every single day at school. The failure rates for the low levels classes is ~50% and even THAT is inflated because the teachers are frowned upon if they fail to pass students. When teachers fail to pass students, students drop out and the college stops getting money. So they string them along into higher and higher levels classes hoping they catch on and catch up. This has led to me being in 300-400 level computer science classes with people who have absolutely no business being in college at all, let alone anywhere near a computer.<p>They have no functional knowledge of computing, and have no chance of getting a job even if they manage to get through college with a C average.<p>Unfortunately, the higher level teachers bend to the lower capability in the class as well... I had a 425 advanced database class where the teacher told us that some people still had not managed to install mysql after the midterm...<p>The only reason kids were passing with C&#x27;s is they were googling for answers on the open-laptop tests.<p>By subsidizing the marketplace, the government is allowing schools that should close or be radically reformed to continue chugging along.<p>Another tangental issue is college sports. Colleges can play all sorts of games with the way money is spent on college sports and athletes. Companies can donate huge sums of money for sports complexes that are suppose to benefit the entire student body, but the athletes at my school have a separate gym with high end amenities where the regular students use a cheaper gym with normal gym equipment. I pay for classes, but people who run faster than me get in for free, get easy A classes, and get high end amenities. They get free food, special athlete lodging, and the list goes on and on. All of this is coming out of the general coffers.<p>While they have both hot whirlpools and cold tanks to aid in their workout recovery, I&#x27;m in a &quot;computer science&quot; building rented off campus, with no place to plug in a power cord.<p>I&#x27;m really shocked to see the NYTimes go as far as they did. Certainly, the article will be met with spite from the left as well as the right.
bawanaabout 10 years ago
time to take action:<p>kill -9 all_administrative_positions
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