The high cost of college tuition is a problem. In the last few decades, it’s become increasingly important to have a college degree in order to achieve a relatively secure financial standing and a modest degree of job security, but at the same time, the cost of higher education has skyrocketed. If we are ever going to find a way to solve the problem, we must first begin to understand how and why tuition has gotten so high.
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Why has the cost of college grown the way that it has in recent decades? There are many theories out there that attempt to explain it. Let’s take a look at a few of the most popular ideas, and you can decide for yourself if one, or perhaps a combination of a few, seems accurate to you.
Theory 1: Student aid could be to blame.
Ellen Wexler recently wrote a piece for Inside Higher Ed in which she explained that the high cost of college tuition could have a lot to do with student aid. In the article, she notes that a working paper from the National Bureau of Economic Research suggests that as student aid has become more available in recent decades, colleges have taken advantage of that opportunity by raising tuition costs.
Wexler points out that while research suggests some real truth to this theory as it relates to for-profit colleges, “the idea that increased student aid drives up tuition is contentious, as is the researchers’ model.” She goes on to point out that the paper’s conclusions draw from a hypothetical college. Still, it’s an interesting idea to toss around as one potential factor in higher tuition costs.
Theory 2: It’s due to a dramatic revenue shift from public and private sources to tuition and fees.
A popular theory regarding tuition costs (you find reference to it when examining almost any article on the topic) relates to recent revenue shifts. The idea is that deep budget cuts at the state level for public higher education and reduced subsidies at private schools have shifted college costs, increasingly, onto the shoulders of students and their families. Data suggest that state spending has been up again in recent years, but it’s still down overall since the Great Recession.
“But when you look at where the money’s coming from, it’s shifted dramatically,” Professor Ray Franke, of the University of Massachusetts – Boston, told CNBC. “For students, their share [in the form of tuition] more than doubled as the states have cut back [funding] by about 30 percent.”
But, the issue is a little more complicated than that. Consider the following theory…
Theory 3: The significant increase in college enrollment in recent decades shook the system.
Some argue that public subsidies actually have gone up over the years, it’s just that the number of people attending college has risen even faster. Perhaps this fundamental shift, from perceiving college as a rare and elite professional move to almost a mandatory one has confused the system a bit. The appropriations, per student, just haven’t been able to catch up with the growing demand for them.
“Enrollment in undergraduate, graduate and professional programs has increased by almost 50 percent since 1995,” wrote Paul F. Campos at The New York Times. “As a consequence, while state legislative appropriations for higher education have risen much faster than inflation, total state appropriations per student are somewhat lower than they were at their peak in 1990. (Appropriations per student are much higher now than they were in the 1960s and 1970s, when tuition was a small fraction of what it is today.)”
Although this theory alone doesn’t explain the higher rates of tuition, it does turn direct our attention toward a shift in the way a college education is understood and valued these days. The system will need to adjust somehow as more and more students attend school with each passing decade.
Theory 4: Amenities and administrators.
Another piece of this puzzle is what it takes to run a college these days. It’s not like it was 30 to 40 years ago; schools and students have different needs, and colleges have to pay to keep up. IT systems, and the folks that run them, are just one example of this. Other costs, like meeting compliance obligations, have also expanded in recent years. “Administrative bloat,” as it’s been dubbed, could account for a significant percentage of the rising cost of operating an institution of higher learning. Something else that deserves our attention is the significant increase, in recent years, to the salaries of many university presidents.
The truth of the matter is that the high cost of tuition is most likely due to a combination of a few of these ideas and theories. It’s a complex matter, that’s for sure. But, building a better understanding of the factors that play into it could help us begin to unpack the problem.
Hopefully, this increased awareness will also allow you to make some decisions regarding higher education costs that are right for you. More knowledge is always a good thing even when we aren’t able to arrive at hard and fast answers or solutions.
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