Why college costs so much

Growing federal subsidies have inflated the cost of college, economist Richard Vedder tells the Wall Street Journal.  “It gives every incentive and every opportunity for colleges to raise their fees.”

Colleges build luxury dorms and recreation centers, says Vedder, an Ohio University professor and director of the Center for College Affordability and Productivity. They hire “administrators to manage their bloated bureaucracies and proliferating multicultural programs.”

“Every college today practically has a secretary of state, a vice provost for international studies, a zillion public relations specialists,” Mr. Vedder says. “My university has a sustainability coordinator whose main message, as far as I can tell, is to go out and tell people to buy food grown locally. . . . Why? What’s bad about tomatoes from Pennsylvania as opposed to Ohio?”

Federal spending hasn’t made college more accessible for low-income students or improved graduation rates, says Vedder. Only 7 percent of recent graduates come from the bottom-income quartile compared with 12 percent in 1970 when federal aid was scarce.

President Obama’s proposal to tie federal aid to graduation rates, and other performance metrics, will spur grade inflation, Vedder predicts.

“I can tell you right now, having taught at universities forever, that universities will do everything they can to get students to graduate,” he chuckles. “If you think we have grade inflation now, you ought to think what will happen. If you breathe into a mirror and it fogs up, you’ll get an A.”

Online education could reduce costs, says Vedder, but don’t expect the government to take the lead.

“First of all, the Department of Education, to use K-12 as an example, has been littered with demonstration projects, innovation projects, proposals for new ways to do things for decades. And what has come out? Are American students learning any more today than a generation ago? Are they doing so at lower cost than a generation ago? No.”

Government can help by getting out of the way, Vedder says.

Many professors are “disappointed” by President Obama’s higher ed plan, reports Inside Higher Ed.

. . . the plan focuses on certain measurable student outcomes – such as graduation rates – but would do little to ensure actual student learning.

Some called it a No Child Left Behind for higher education.

Linking student aid to graduation rates and earnings would encourage colleges to reject disadvantaged students and humanities majors with low earning potential, writes Tyler Cowen on Marginal Revolution.

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Comments

  1. Stacy in NJ says:

    Only 7 percent of recent graduates come from the bottom-income quartile compared with 12 percent in 1970 when federal aid was scarce.

    The subsidies did what subsidies do – create cost inflation. The incredible inflation in the healthcare and education sectors is caused by government subsidies. Want both to become more affordable? Remove the middle-class subsidies.

  2. Too many unprepared and/or unmotivated kids are going to college. I suspect that they are disproportionately in the bottom quartile, in terms of SAT/ACT scores. HS grades are too likely to be inflated and HS course descriptions too misleading for either to be a reliable predictor of college-level knowledge and skills.

    The federal government should get out of the college loan business, Period. Let private lenders make sound economic decisions as to whether student A with weak SATs wanting to be an art history major or student B with weak ACTs wanting to be an XYZ Studies major are good risks.