Problem : Loss Of Public Funding
Finally, here is good news of why the rise in tuition fees is not only the students fault: the government has slashed subsidies to higher education to augment massive bloat in other areas of government. Most notably, prisons. The state of California spends $1 billion more per year on prisons than on education. In other words, the state spends more money on supporting those who have wronged society than supporting those who have done well and mean to do better. To make up for the difference, students are asked to pitch in. to finance both the athletic department and the governmental bloat.
To conclude, our education system has numerous flaws, but labeling these mistakes as systemic failures is incorrect. The problem was not created by the government, but by the students and parents who expect and demand both top-level sports teams and fun but unnecessary amenities. The rising cost of education will not be fixed by bringing in more private sector providers; it will be fixed by students focusing on long-term goals instead of short-term gratification. So we need to ask our 18-year-olds to be mature. Costs are going nowhere but up!
This article was originally published in November 2014.It was last updated in April 2021
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Total Cost Increases: Private Colleges Vs Public Colleges
Finally, well take a look at how the average costs of private schools have compared to the average costs of public schools over the past four decades. Although theyve both risen at rates faster than that of inflation, you might notice that theres a big difference in the costs between public and private schools:;
Average Tuition & Fees + Room & Board Costs, 1975-2016
Overall, we can see that average education costs have risen pretty rapidly.
For public schools -;The average total cost went from $7,833 in 1975 to $19,548 in 2015. Thats a 250% increase over four decades.
For private schools -;The average total cost went from $16,213 in 1975 to $43,921 in 2015. Thats a 271% increase over four decades.
Your next question, naturally, might be why weve seen such a rapid increase in the cost of a college education in the US over the past 40 years. This isnt an easy question to answer, but well address all possible explanations for the rising cost of college in the next section.
Where Did This Crisis Originate
Past generations were able to pay for college themselves with the hard-earned money they made working over summers. Those that came from more well-off families were able to help their children pay for their education. But in the past few decades, public funding was severely cut, forcing colleges to raise their fees, and in turn, leaving millennials with no choice but to take out hefty loans. The rest is history.
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State Funding Can’t Keep Up With Enrollment
Terry Hartle, a senior vice president of the American Council on Education, boils down the increasing cost of college to this: Many state governments have cut operating support for higher education, for at least a generation, and let colleges replace the lost revenue with tuition hikes.
“States provide less, and students and parents pay more,” Hartle told Business Insider. “Studies have shown that when state support is level or increasing, tuition is flat. But when state support declines, tuition goes up. Roughly 80% of America’s students attend public colleges, so it’s not an exaggeration to say that the biggest determinate of the price they will pay for their education is the budgetary decisions made by state governments.”
The College Board’s report underscores Hartle’s theory. It found that prices at public colleges and universities rise faster when government funding per student sees little growth or is slowing down. In the 2015-16 school year, appropriations â money given to a school by the government â per full-time enrolled student were 11% lower than 10 years before, when adjusted for inflation.
“For public institutions, state appropriations make up a significant portion of the college’s revenue, and in recent years, the state appropriations have not been able to keep pace with enrollment,” Jennifer Ma, a senior policy research scientist at the College Board, told Business Insider.
College Students Are Being Played Like Pawns In A Cruel Monopoly Game And Its Just Not Fair
Grey Gordon, an assistant professor at Indiana University says âYouâve got to somehow tie aid to lowered tuition if you want to give money to students. You have to somehow structure it so colleges canât just increase tuition and capture that money.â That means some sort of regulation by an agency or governing body.
Other critics deny this train of thought. In fact, David Feldman, an economics professor at the College of William & Mary and author of Why Does College Cost So Much?, says that;increasing federal aid will rarely change how high a college sets its tuition. âA collegeâs sticker price is set by its wealthiest studentsâ ability to pay â and the wealthiest students never take out loans.â
But that doesnât mean colleges never use federal aid to their advantage. Especially at private colleges, Feldman said, federal aid may replace existing scholarships. Take a student who would have gotten $20,000 from a college. If she gets an extra $1,000 in Pell Grants, she may get $19,000 from her college instead. The student pays the same, but the college pays less.;At public universities, increases in Pell Grants typically lower net tuition. âItâs a very different system, Feldman said. âThatâs the nuance thatâs missing.â
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College Tuition Has More Than Doubled Since The 1980s
Students of todays generation are facing financial struggles that were completely foreign to past generations. On top of the already difficult student loan debt challenges, students of today also have to deal with the increased costs of housing. To even just have the initial down payment for a home is a major struggle for many millennials after all of their hefty costs of studying.
Figures have found that since the 1980s, the cost of an undergraduate degree has increased by a shocking 213% at public schools, and 129% at private schools. As many of you are already aware, education does not always just end here.
Photo by;Andrea Piacquadio;from;Pexels
What Are Some Ways To Pay Less For College
While college inevitably comes with a high price, there are still some ways to pay less for college, such as applying for financial aid, taking advanced placement courses, using dual enrollment courses, testing out of college classes, taking advantage of education expense tax deductions, and strategically applying to colleges such as in-state public colleges.
Online colleges are also a great way to pay less for college, as they tend to be much cheaper, and some are even tuition-free such as University of the People.
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How Much Does College Cost
Attending college is a much pricier prospect today than it was in decades past.
However, the amount you have to spend on college varies widely depending on what type of institution you attend. For instance, two-year community colleges offer much lower tuition and fees per year than a four-year university. Out-of-state students will pay even more, while private universities tend to charge the highest rates overall.
For the 2020-21 school year, the average cost of a U.S. college by school type is as follows:
- Public two-year : $3,770
- Private nonprofit four-year: $37,650
Music Creation Resources And Tools
For aspiring producers, songwriters and composers, there has never been a time where this much information about music creation and theory has been right at our fingertips. There are so many digital tools available to both make and learn music that almost anyone with an interest can pick them up and start making sounds! Understanding how music works, however, is complex and that’s where online resources and tools such as blogs come in handy. You can use these tools to discover useful information such as the difference between rhythm and beat or how to compose a melody to further your understanding of music and how it’s made.
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How Did College Get So Expensive
Todays typical college student pays more than $23,000 annually in tuition, fees, room and board. Many graduate with a diploma in hand and crippling debt over their heads.
The growing bureaucratization of academia doubtless helps drive costs through the roof. A 2014 study by the New England Center for Investigative Reporting and the American Institutes for Research found that the number of university professionals who neither teach nor conduct research had more than doubled in 25 years. Most of that administrative bloat comes in the form of mid-level bureaucrats performing non-essential tasks peripheral to the attainment of higher education.
And did we mention academic rent-seeking? Professors of the less popular disciplines have engaged in this dubious practicequite successfullyfor years. To learn more, read this;article.
Key Topics
Average Cost Of College
If youre preparing to go to college, you may get serious sticker shock when you realize what the tuition will cost you. And thats not considering books, housing, and living expenses. Theres a very valid reason for your sticker shock: college tuition prices have risen steadily since the 1990s;and are higher than theyve ever been before.;
In 2017 the average cost for college tuition was nearly $7,000 per semester. Adding room and board, living expenses, and other fees brought the yearly average for college students to over $25,000. This is an astronomical amount that most people simply cant afford.
If this cost seems out of your reach, youre not alonebut you are in luck. WGU is one of the institutions that works to make college more affordable. Our average tuition is less than half the national average, and its charged at a flat rate per six-month term . This gives you much more bang for your buck, especially if you complete extra courses in your term . And because WGU is entirely online, you dont have to worry about additional room and board fees or other living expenses.;
Discover why traditional colleges around the country are rising in price and how you can find options that are affordable for you.
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College Executives Are Earning Large Salaries
However, in addition to the expansion of the number of administrative staff members, high ranking administrators are earning unprecedented salaries.
Public university presidents, in particular, have benefitted from enormous compensation packages. In 2012-2013, the median pay of presidents increased 5% to $478,896 and the number of presidents making more than $1 million more than doubled in 2013, reported the New York Times.
The Chronicle of Higher Education provides data on executive compensation at more than 1,200 chief executives at education institutions. Renu Khator, the president of the University of Houston was the top-earning public college executive in the nation in 2015, with a total compensation package of $1.3 million.
Why Are Colleges Public Private Etc
When you ask a college administrator and or a college representative why their college is so expensive they will try to explain that it is because of everything the school offers. Paul F. Campos, a reporter at the New York Times, said that it goes something like this:
Once upon a time in America, baby boomers paid for college with the money from their summer jobs. Then, over the course of the next few decades, public funding for higher education was slashed. These radical cuts forced universities to raise tuition year after year, which in turn forced the millennial generation to take on crushing debt loads.
On an NPR broadcast in 2015, Sandy Baum said that colleges are not spending more money to educate students. they have to get that money from someplace to replace their lost state funding and;thats from tuition and fees from students and families.
The huge increase in public investment in higher education in the US is greatly larger than it was twenty/thirty years ago. This spending has increased much faster than what government spending could at this rate. Therefore, it is important to see, regardless of the funding cuts made, that the rise in college tuition does equate to a huge increase in public subsidies for higher education. As more young Americans go to college, there seems to be an increase in spending.
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Why Havent Market Pressures Reduced The Cost Of College
Over the past 20 years, annual consumer price inflation has averaged a humdrum 2%. But in what many commentators have called the Chart of the Century, economist Mark Perry reveals that the unassuming average masks substantial variation across sectors. The prices of hospital services, child care, and education have risen well in excess of average inflation, and have also outpaced the growth in hourly wages. The Financial Times calculates that 88% of consumer price inflation since 1990 is down to just four sectors: health care services, prescription drugs, housing, and education.
But as Perry shows, many other goods and services have fallen in price over the same period, including computers, televisions, and cell phone services. The first laptop computer debuted in 1981 with a price tag exceeding $5,000 in todays dollars. Since then, the price of computing power has dropped by several orders of magnitude. History supplies many examples of once-expensive products becoming astronomically cheaper when innovation and competition work their magic. But the cost of college remains stubbornly high, and rising. Why?
Observers have proposed several hypotheses as to why the cost of college keeps increasing, especially in comparison to other goods and services. Let us examine each of these hypotheses in turn, going from the least compelling to the most.
How Did College Education Become So Ridiculously Expensive
The following is an exerpt from The Student Loan Swindle: Why It Happened – Who’s To Blame – How The Victims Can Be Saved,;by Bill Zimmerman. The book explores the origins and depth of our now $1 trillion national student debt bubble, and calls for a national campaign of civil disobedience as the only means to a fair resolution of the crisis at hand. Chapter 3, “How Did College Tuition Become So Expensive,” is reprinted here in its entirety, by permission of the author.
The student loan crisis is a new phenomenon. Despite its huge impact, as recently as the late 1980s there was no student loan crisis. Then, middle and working class students suffered from cutbacks and had difficulty financing their educations, but overall, while the system of paying for college was beginning to break down, it had not yet become the disaster it is today. The crisis came because in later years the cost of getting a higher education rose many times faster than the overall cost of living. To make matters worse, wages were stagnant and the real purchasing power of working Americans was in decline.
The crisis now centers on the inability of borrowers to repay their student loans, but those borrowers only needed loans in the first place because in the mid-1990s the cost of tuition escalated so dramatically. By the first decade of the new century, it virtually went through the roof. What drove this sudden and rapid increase?
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Explanation #: Public Funding For Education Has Been Slashed
This explanation may be the one most endorsed by schools themselves, and its likely to be the one you hear if you ask admissions officers or tour guides about the issue at any pricey institution. Its not that costs have gone up – costs have just been shiftedto studentsas schools have to make up deficits left by slashed state or federal funding.
But is it true that the government has stalled or cut funding for post-secondary institutions?
Well, not necessarily. Overall, government funding for higher education has increased a lot faster than government spending in general. Although there are hiccups;when the economy is in bad shape – like during the Great Recession – funding, in general, seems to have increased significantly over past decades:;
- State funding for higher education increased significantly;between 1960-1980: 390%, to be precise
- This state funding reached an high record of $86.6 billion in 2009. It fell a bit due to the stock market downturn in 2008 but has since risen to $81 billion;
- The federal Pell Grant program has grown from $10.3 billion in 2000 to $34.3 billion
Budgets were cut after 2008 due to the Great Recession, but college costs were increasing way before that, and the stock market has since recovered. I think its safe to say that funding for post-secondary educations hasnt been slashed overall, but that doesnt mean that schools arent dealing with tight budgets. In fact, funding might be a big issue for schools if
How Much Do Colleges Spend On Recruitment
In total, the current recruitment spend for higher education is $10 billion a year. Some estimates predict this will increase to $100 billion over time, Katzman said in his article. Acquiring students has become a cost of doing business simply to maintain enrollment and has surely been passed on in the cost of attendance.
A major exception to this recruitment pressure is elite schoolssuch as Stanford or Harvardthat have had a record number of applicants in recent years.
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Problem : Too Many Frills
You get what you pay for: if you want a university that has the newest, best and coolest campus so you can brag to friends, you will pay accordingly. Students should not just be attracted to the university with the best frills. And university boards of directors should aim to maximize how every dollar increases the long-term success of students.
This is at least partly the fault of students, because they are often asked to vote on a new project and, by saying yes they effectively vote to increase their tuition fees. An epic example of frills that universities provide is the fact that a number of US universities are currently building lazy rivers in their pools. Thats right. Instead of encouraging their students to study hard, they are actually encouraging their students to be less efficient by lulling and dazing around in the LAZY river. But this is a typical example of a frill that US universities spend many, many millions on to get you to choose their university over all others so in turn, you can bring your parents retirement savings to them.