Colleges have no market incentive to control costs, writes Richard Vedder, an Ohio University econ professor, in the LA Times. As a result, college tuition is the fastest-rising part of the consumer price index, outpacing health care.
In 1958, when I entered Northwestern University, annual tuition was $795, an amount equal to a bit less than two months of gross income for a typical American family. This year’s Northwestern freshmen will pay tuition of $29,940, or more than six months income for a typical family.
While the cost of college has tripled, quality hasn’t improved, writes Vedder. The problem is that most students are subsidized by government or private aid, making them less sensitive to price. So colleges have been able to expand staffs, raise pay and build new facilities without worrying about not filling the seats.
. . . only about 21 cents of each increased dollar of funding for American universities over the last generation has actually gone into instruction. Universities have actually lowered the portion of their resources devoted to teaching undergraduates, instead putting more into research, administration, graduate instruction, student services, intercollegiate athletics and other things that don’t directly translate into better classes for students. Third-party grants that used to subsidize undergraduate instruction now increasingly fund smaller teaching loads for professors, research projects, burgeoning university bureaucracies and higher-profile athletic teams.
Students now live in nicer surroundings, with Internet connections and telephones in their dormitories and country club-like recreational facilities. Yet there is little evidence they are learning more. Average scores on the Graduate Record Examination, taken by graduating seniors considering graduate school, are slightly lower today than in 1965. There has been a reduction in class hours attended, and students increasingly take five or six years to get their degrees.
“College costs cannot continue indefinitely to grow faster than family income,” Vedder writes. Universities are losing market share to for-profits, like the cost-conscious University of Phoenix, and job-specific training programs. Eventually, non-profits will have to cut fat to control costs.
The Onion reports on the scandal of colleges selling worthless degrees.
One alleged victim of the checks-for-degrees scandal is 25-year-old Michael Trumbull, who purchased an art-history degree from the University of Michigan, making his first payment in January 2002. Trumbull currently works the front desk of a Lansing Comfort Inn.
“Not once has a customer asked me about the innovations of Edouard Manet, or whether politics and aesthetics make good bedfellows,” Trumbull said. “They’re much more likely to ask me to bring them a plunger or give them a wake-up call.”
Trumbull, who owes more than $40,000 in student loans, added that he must use a calculator to perform even simple math.
Students who just barely made it through high school are going on to college these days, but they’re not likely to earn a degree. Many take on loans they’ll have trouble repaying.