Abstract: This paper is an effort towards explaining why college costs so much and why college tuition has outpaced inflation. The outcome of this research paper is that the current tuition costs are not unfair to students and are affordable if one keep the quality of education in mind.
Rising College Tuition has been the bane for many families, often being the reason why they opt not to attend. Previously college tuition was affordably priced, but the costs associated with a college education such as stay, travel were prohibitory compounded with meager earning levels. A popular belief is that post secondary/college education cannot be afforded by middle income American families in the face of escalating tuition. Yet another cause for speculation was in the 1990’s wherein endowments were huge yet college tuition kept rising.
The rising tuition costs need to be viewed differently for public and private institutes. The reasons for rising costs in private sector can be attributed to increase technology costs , student services and financial aid along with increasing competition. In the public list all of the above are important along with the additional factor of withdrawal of state support.
The fact of the matter is that Tuition fees are rising and are expected to go up further. There is an increasing stress on the importance of getting a college degree, especially since the degree gives one a better career start and leads to comparatively better salaries and hence combat the omnipresent inflation.
According to a research paper by Ronald Ehrenberg, tuition at private colleges has been rising annually by 2 to 3 percent more that the inflation rate. The tuition at a college of repute was more than the average family income.
Colleges of repute are greatly in demand, but the seats are limited and the seats are not rising in proportion to demand. Colleges are supposed to be non profit institutions and hence there is no incentive to add courses or capacity. The addition of either costs the college more than what it would be able to cover from the tuition charged. The preference is for colleges to conduct smaller focused classes with distinguished faculty and top of the range equipment and environment. The costs of providing the infrastructure vis-à-vis the number of students and hence tuition is more and hence leads to smaller number of students paying higher fees.
Increasing number of aids and endowments enable students to pay more, which indirectly induced colleges to raise their tuition. Hence we can see that without tuition aid, feed would continue to rise and students have no option but to drop the idea of a college education or be a working student. On the other option, increases in government aid, increases student ability to pay the increased tuition fee. To sum it tuition fees are going to rise, because there is a demand for education.
The fees are high because of the costs that the college incurs in being up to date and hence give quality inputs. Colleges are seen to make an effort to look better than their competitors so that they can attract the best students and hence have the repute of being the very best. Some institutions are forever in a race to spend more to improve facilities , faculty and cadre of students , and most families are in a race to get the best education possible. Students are increasingly looking for the best possible education in a “branded” institute as the economic returns in doing so is large and the weightage given to the brand is every increasing. (Brewer et all, 1999)
The college also needs to retain faculty and to do so the college needs to pay them salaries that keep up with the cost of inflation. Colleges are also seen to maintain the high cost research departments which are white elephants but necessary to attract the best minds and faculty.
The government is also responsible for increasing tuition costs. In the endeavor of giving “needy” students the opportunity to get a good education, it has directed institutions to direct their aid to these students. These grants such as the Basic Educational Opportunity Grant have not kept pace with rising costs (Ronald Ehrenberg). In order to improve facilities or develop their property, permits have to be obtained from the government which comes at great expense as the government wants compensation for the “tax exempt “status that the institutions enjoy. Unlike business houses the college cannot just close down or relocate, it has to operate in all circumstances and yet meet all expectations.
Arguments can be made that colleges need to spend more in increasing their capacity rather than their décor. That they should look at substitution rather than expansion. However the attitude is like any other , when there is huge demand why change or compromise especially since there are always students willing to pay .Faced with increasing college expenses , the public has a hard choice to make and a difficult task in balancing their budgets . This results in the government getting the short end of the stick as they are blamed for inflation, rising costs and cuts in grants.
Students are increasingly found to work part time along with their college education in order to meet the rising expenses. There is also seen an increase in the number of hours that a student puts into work. This means work is eating into study time and hence impacts the knowledge gain and hence performance. The education becomes equivalent to a degree on paper. Hence another angle to look at is that rising tuition may get the enrollments the college needs but impacts the output from the students in the long run.
Colleges need to organize themselves better if they are to exist for the goal of education for one and all. A periodic review is required to be carried out wherein all aspects of the academic and non academic activities are evaluated and then colleges need to determine whether any degree of efficiency can be achieved in “doing” or not carrying out an activity. There needs to be brought in an accountability mechanism whereby the college management is answerable for expenditures and hence rising tuitions.
Works Cited
Dominic J. Brewer, Eric R. Eide and Ronald G. Ehrenberg, “Does it pay to attend and Elite Private College? Cross- Cohort evidence of the effects of College type on earnings”, Journal of Human Resources 34 ( Winter 1999): 104-123
William J.Bowen , The Economics of the major private research universities ( Berkeley CA: Carnegie Commission Higher Education , 1967
Ronald G. Ehrenberg ,”Adam Smith goes to college : An economist becomes an Academic Administrator”, Journal of Economic Perspectives 13 ( Winter 1999):99-116(1999a)
Ronald G. Ehrenberg, Why colleges cant control their costs ( Cambridge MA : Harvard University Press.(2000)
Robert H. Frank and Philip J. Cook , The winner take all society ( New York : Free Press,1995)
