Too Much Money

Why is college so expensive, wonders Larry Abramson at NPR.

Why indeed? It turns out, at least according to the article, that it has a lot to do with government stinginess and a little bit to do with competition. As Abramson explains:

If you are a veteran of a public university, the jump in tuition at your alma mater might be downright jaw-dropping. Tuition at the University of California, Berkeley, was about $700 a year back in the 1970s. Today, U.C. Berkeley students have to fork over around $15,000 per year. That’s a 2,000 percent increase.

There’s a simple explanation, according to Sandy Baum, who teaches at George Washington University. “States are paying less of the cost than they used to,” Baum says. She adds that as state budgets shrink, the students’ share of paying for education goes up.

State-supported institutions, which educate 80 percent of students, are now all dramatically more expensive than they were 20 or 30 years ago. States are simply less willing to pay for higher education now.

There are other things going on here, of course. While declining state funding certainly accounts for a tuition increase it does not, alone, account for a 2,000 percent increase.

Part of the increase may have to do with competition, say some critics. According to the article:

Terry Hartle of the American Council on Education says that’s because schools are paying more for talent.”Now we’re competing in a global economy,” Hartle says, “so if you want to get the best scientists, the best engineers … you’re literally competing with universities and employers from around the globe.”

This competing for talent argument is one frequently thrown out by high-tuition apologists. It’s an interesting point, but it seems like a puzzling and one-sided form of competition.

Why are universities competing for the best scientists and the best engineers “from around the globe” and then using that to justify tuition costs that would be ridiculous most places around the globe?

Thanks to America’s bizarre funding structure for higher education, the country has the most expensive colleges (for students) in the world. Does that really result in dramatically better talent among faculty and administrators?

[Note: the Abramson piece explains that while public tuition and fees increased 5.6 percent a year more than inflation, “costs at private schools, adjusted for inflation, have actually decreased.”]

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer