The Cost of Higher Education

by John Holbo on October 24, 2012

This one is always good for an argument.

Suppose you wanted to go live at a luxury resort for four years. You’d expect that to cost, wouldn’t you? (No one is going to write an editorial raging about how if you wanted to live at Club Med it would cost you at least $50,000 a year – probably more.) So why are people surprised that it costs a lot – really a lot – to send a kid to college for four years? College is the sort of thing that seems like it should cost a lot: beautiful buildings on nice land, nice gym, nice green spaces, expensive equipment, large staff that have to be well-paid because they provide expert services. If you want to be puzzled about something, figure out how and why it was ever cheap, not why it costs now.

But this thought that colleges and universities are like luxury resorts, so of course it costs, is not very comforting to apologists for the cost of higher ed. Four years of resort living does not sound like a model that can, in fact, be available to everyone. If the democratic dream is that every kid can go to college, and if the dream of college is that every college kid can live for four years in the equivalent of an expensive resort, then the dream dies.

[UPDATE: It seems my Club Med analogy has been misunderstand, and that is understandable. I’m not suggesting that colleges are literally like Club Med any more than I am suggesting that Club Med has a university library, just because it costs as much as college. I am just suggesting that we should see it as normal and to be expected that if you go and live somewhere that provides you with a lot of stuff, much of which you would expect to be costly, you should expect it to cost you.]

It has often been pointed out that universities and colleges are all trying to be Rolls Royce; no one is trying to be Kia. Existing institutions don’t compete on bottom line cost to students because cutting costs would undercut prestige and these institutions are competing to be prestigious; and, anyway, most students get some financial aid, so cost isn’t really transparent and you have a third-party payer problem, price-sensitivity-wise. Suffice it to say that a number of factors conspire to make it the case that the market for higher ed doesn’t look like the market for, say, cars, with luxury vehicles for a few and basically functional, affordable options for the masses. (No one wants to be the Crazy Eddie of Higher Ed: We’ve slashed tuition so much we must be insaaane! Nor do students or parents want Crazy Eddie, exactly. But no one wants to be crushed by debt either.)

It seems inevitable that something’s got to give. One possibility is the Western Governors University-style substantially online/competency-based model, the goal being to get kids through asap in a no-frills sort of way. Another model would be to try to offer traditional programs that are high quality but spartan in certain ways. A traditional liberal arts education but with fewer major and elective options, say. A common core as cost-cutting measure. We teachers complain about how the problem is that there is so damn much administrative overhead. True! But it’s also true – so I am told – that one of the main reasons administration grows like kudzu is we want our students to have so many options and opportunities; all that needs organization. Simple programs, with fewer options, could be a lot cheaper.

I find it somewhere between depressing and repulsive to think of how the whole thing could be least badly downsized. You could hold classes in all those suburban malls that are having so much trouble! Teach English 101 next door to the struggling nail salon. It’s win-win! At the same time, I realize that making the perfect the enemy of the good is a mistake. Profs. aren’t snobs about all this, in my experience. They’re idealists. If you teach college, you have a strong sense of what the ideal college experience should be like. You know that reality typically falls short, as things are. But it’s hard to give up the possibility of the ideal, in making your model. Then again, a Kia just isn’t going to be a Rolls Royce. It’s not good enough to say that, ideally, college should be a transformative personal experience, not just a bunch of online videos and assessment. I suppose, ideally, driving should be a transformative personal experience – you should feel how this baby takes the curves! – but that doesn’t mean everyone should go into debt, at the age of 18, to buy a Ferrari. Not if you can figure out how to build a Kia, so you can just plain get to your job.

(I’m not even touching on the problems of adjunctification. No one wants to spend 5 years getting a dissertation just to teach for a low salary for some online outfit – just for example. But do feel free to vent in comments.)

It would make a lot of sense to cut military spending and use that money to solve the whole problem, wouldn’t it? Why the hell shouldn’t every kid have the opportunity to go to college? College is expensive because it’s great! We’re a rich society. But I don’t see any big infusion of public money coming down the pipe. Can things go on as they are? Or must the whole higher education paradigm shift – maybe even collapse? If so, what’s the least bad way that can happen?

{ 149 comments }

1

garymar 10.24.12 at 6:21 am

In the US, one of the (possibly fading) glories of the educational system has been the community college, 2-year system. This is the broad middle part of the pyramid that supports the prestigious institutions at the top. A lot of students get an associate degree, and some of them even transfer to 4-year institutions to get the bachelors.

I’m sure a lot of transformative experiences are happening right now in community college classes around the US.

2

Colin Reid 10.24.12 at 6:23 am

In many countries there are already only a select few Rolls Royce universities that are largely inaccessible to the masses. In countries where the disparities in income between universities aren’t so massive, elite status is supposedly maintained by imposing high (in percentile terms) standards of academic achievement on entrants and new faculty, which tends to be self-sustaining but is obviously a game only a minority of universities can win. (An extreme case of this is France – the typical university is legally obliged to take anyone who meets some minimal requirements, while the Grandes Ecoles inflict entrance exams so difficult that they require years of special preparation.)

Thing is, a place like Oxford or the Polytechnique in practice only gives a Rolls Royce experience to those few students who’d do well at almost any university, so we don’t really know if these places are doing a good job. How can universities give the best experience to someone who is of merely average academic ability/inclination? It’s not just a matter of having enough money.

3

Sebastian H 10.24.12 at 6:26 am

“But this thought that colleges and universities are like luxury resorts, so of course it costs, is not very comforting to apologists for the cost of higher ed. Four years of resort living does not sound like a model that can, in fact, be available to everyone.”

A couple of points.

1. But it wasn’t always so expensive. In fact in the fairly recent past it wasn’t anywhere near as expensive. So what gives?

1a. Was it that it wasn’t resort like until very very recently? (not a snarky question, anyone graduate from one of the mid tier schools in say the 1960s who can tell us? What was a well respected but public school like Berkley like at that point?)

2. For many of ‘the best’ colleges, isn’t the whole point really that it is exclusive and the cost is part of that? These universities think of themselves as training the leaders of the nation. Every single member of the Supreme Court went to Harvard or Yale (sometimes both). We apparently couldn’t find one person ‘smart enough’ from the West Coast Ivie–Stanford. Or even any other single school in the entire 50 states. As far as I can tell the only Supreme Court Justice member to have graduated from the Berkley Law School (Boalt Hall, one of the premier public law schools in the world, and no I didn’t go there) was Earl Warren and he graduated in 1914. The last President who didn’t go to Harvard or Yale was Reagan. And I’m not strictly sure, but I think the last major Presidential candidate even was Bob Dole. The high sticker price is part of the signal that the education at this or that particular school is ‘valuable’.

3. Which side of the chicken/egg is it? It might be that college is largely about signaling. (See point 2 above). If you add huge government subsidies to customers in a exclusivity/signaling product, what do you get? A bidding war. The subsidy may help the student in year 1, but by year 5 the subsidy is just part of the price that people have to bid past to signal that they have the ‘better’ product. If that subsidy comes in the form of a loan to the customer, secured by the government, what you have effectively done is raised the price so that all future students must pay more for the same signal, requiring more loans. It might be that the price is so high, because the semi-subsidy has bid up the price. This especially makes sense if the customer isn’t very savvy, doesn’t really understand how much money they are talking about or is relatively inexperienced (see all arguments about pay-day loans…).

“Existing institutions don’t compete on bottom line cost to students because cutting costs would undercut prestige and these institutions are competing to be prestigious”

and

“I find it somewhere between depressing and repulsive to think of how the whole thing could be least badly downsized. You could hold classes in all those suburban malls that are having so much trouble! Teach English 101 next door to the struggling nail salon.”

I may be misreading it, but I *think* you’re hinting that there would be something bad about such a model. But think of what that reveals. If the most important part that we were selling was education and learning, the suburban mall model wouldn’t seem viscerally obnoxious, right? So what are we selling with a college education? Interaction with smart people? That could happen in the suburban mall model too. The fact that the suburban mall college smells so bad, suggests that we really want something else. I’m pretty sure it isn’t that we think all college age kids should be able to go to Club Med for 4 years. So what is it?

4

John Holbo 10.24.12 at 6:41 am

“But it wasn’t always so expensive. In fact in the fairly recent past it wasn’t anywhere near as expensive. So what gives?”

I should probably have been more explicit about this in the post. The sort answer is: I don’t know. The slightly longer answer is: I think the ‘standard’ college package today is, indeed, a lot fancier than it was in the 1960′s and 70′s. Better facilities, more programs, more staff. More course options. I don’t know to what degree this is the source of the growth in cost, but I’m pretty sure it’s a non-trivial part of it. All the little things add up. I, too, would be curious to hear from someone who knows to what degree service creep – all the constant little, incremental increases in the quality and variety of the offerings at colleges and universities, until it ends up being pretty luxurious – is responsible for increases in cost. Be it noted: all this stuff is good! (Well, most of it.)

My point about the mall storefront option is that it is patently non-ideal, compared to our ideal vision of the groves of academe. But I don’t deny that if you have to cut costs, renting bargain basement suburban mall space might not be a bad second-best option, especially if the third-best option is, say, collapse. Plus suburban malls are convenient for lots of students for whom your campus might not be convenient! I don’t want to deny the need for higher education to serve currently underserved populations. Older and working students, most notably. The Western Governors model makes me sad, in a lot of ways, but it has its good points, undeniably. It serves under-served groups in a way that is admirably democratic, if the whole thing is done competently.

5

LFC 10.24.12 at 6:44 am

Every single member of the Supreme Court went to Harvard or Yale
Not true. You are neglecting to distinguish betw college and law school.

The last President who didn’t go to Harvard or Yale was Reagan.
Not true. Obama: Occidental College and Columbia. Clinton: Georgetown. (giving the undergrad alma maters)

6

Behn 10.24.12 at 6:50 am

You pretty much hit this point already John, but how many students would just plain feel cheated if they went to school in a mall rather than on a university campus? Right or wrong, people expect University to be more than an education or a certificate, but a sort of experience.

And adding on to the end of #3, one of the big advantages of going to university is the social skills you learn going through it. I’ve often argued among friends that the most important skill you learn from grade school through the end of the education system is social skill. And University, particularly the more exclusive onces, are training grounds for enhancing social skills and working through social system, not knowledge factories.

7

John Holbo 10.24.12 at 6:50 am

And when I say the mall is non-ideal, I really don’t mean just that the professor’s dignity would be compromised, teaching next to a nail salon or whatever. (The professor’s dignity would suffer, but we’re talking about student needs here.) I think that going to college, and having a college campus where the college is, focuses you – I’m in college! Great things are going on here! It’s exciting! – in a way that going to a mall for a couple hours a week probably would not. The students would lose something real. Then again, who am I to force the student to pay more, so as not to lose that thing?

A less tendentious example might be the full-time/part-time resident/non-resident angle. Students lose something if they don’t go to college full-time – really immersing themselves in it. Residential colleges amplify this effect. College is your life, so it’s more likely to change your life. But that’s no reason not to build a cheap, online part-time student model. You shouldn’t be always pushing the customers up the price brackets, just because the more expensive options really are better.

8

John Holbo 10.24.12 at 6:53 am

Behn’s and my comments crossed. He emphasizes, as I do, that it isn’t just the old-fashioned dignity of the profs that is at stake.

9

John Holbo 10.24.12 at 6:58 am

I should also emphasize, before someone attacks me for this, that there is a big difference between what I am saying and being a skeptic about the value of college, per se. It’s one thing to tell someone to buy a Kia instead of a Ferrari. It’s another thing to tell someone to walk instead of buying a Ferrari.

10

GiT 10.24.12 at 7:11 am

Ever since I’ve seen them, these graphs from a paper by Caroline Hoxby have been stuck in my mind and always resurface when the cost of college comes up. Incredibly high levels of subsidization and per student expenditure are a unique feature of the “high status” universities – very loosely the top 10%, but really the top 2%:

http://freemarketmojo.wordpress.com/2009/11/01/the-changing-selectivity-of-american-colleges/

Then there’s always the question of administration creep. Here we have management:ladder faculty ratios at the UC:

http://reclaimuc.blogspot.com/2011/09/senior-administrators-now-officially.html

Perhaps part of the luxury of the university is that it provides things which one might expect any thorough welfare state to provide: health care, parks, community centers, basic housing, food (though typically only the parks and community centers are part of the tuition cost). If people had a basic income and a functional welfare state, which would cover these ‘luxuries’ whether they were or were not at college, perhaps the college experience would be less exceptional.

11

GiT 10.24.12 at 7:21 am

@5 I doubt he’s “neglecting” to distinguish between college and law school. Rather, you are distinguishing the two and he isn’t.

Law students, PhDs, &etc all sometimes say things like, “I’m still in college.” “College” is not equivalent to “undergraduate course of study.”

12

ponce 10.24.12 at 7:23 am

Not long before this competition closes down overpriced U.S. colleges:

“Approximately 25 million students in China pay an average of $400 to $2,200 a year in tuition (Includes instruction, room/board, and meals) to attend public and private institutions.”

http://www.foreigncredits.com/Articles/the-cost-of-college-in-china-60.htm

13

John Quiggin 10.24.12 at 7:30 am

Australian universities look like US state unis but we have managed to keep charges a fair bit lower $4500-$9500, payable out of your taxes after graduation. The biggest single factor is cross-subsidisation from overseas students (one good thing about Oz is that unis are federally funded, so there is no out-of-state tuition charge for Australian residents, wherever they go). Other relevant factors are
* fewer luxuries – most services are covered by a small additional fee, which includes sport & recreation as well as meal services. Sporting teams are (genuinely) amateur
* most students go to their local university, so they can live at home or cheaply with friends
* salaries are generally lower
* class sizes and student-staff ratios are higher, contact hours are a bit lower
* government contribution is a bit larger than in many US states

14

Ian 10.24.12 at 7:34 am

I don’t have much of anything to add constructively to this conversation, and what I’m about to say doesn’t change the fundamental problem of the cost of education, but I want to take issue with the comparison of a university to a luxury resort. A resort is used by people for leisure; a university is used by people to increase their “human capital.” Thus, theoretically, a university adds value to an economy in a way which a resort does not (this is not to say resorts aren’t valuable). Therefore, if the cost of an education prohibits able people from pursuing it, it hurts the economy on a broad scale. Education is an investment (and the costs ought to be measured by the returns); leisure is consumption. Please, try to keep that straight in this discussion.

15

heckblazer 10.24.12 at 7:47 am

What you’re suggesting sounds pretty similar to the community colleges garymar mentioned. They may not quite be at the level of being at the mall, but they give a decent basic education for not a lot of money. They also tend to get put first on the budget chopping block because they lack prestige.

I went to one of the UC’s about 15 years ago (Christ, has it been that long?) and even adjusted for inflation $50k comes close to what I paid for all four years, including room and board. Of course the cost of attending the University of California now is around $30k. For California state schools I know why it’s gone up so much, it’s because the direct subsidies from the state keep getting cut so the students have had to take up the slack. That in turn has been due to the crisis the state’s budget has been in for the last five years combined with the fact that education happens to be the largest chunk of the discretionary budget .

Oh, and while I can’t say what the conditions were like at UC Berkeley in 1968, I can tell you what it cost to attend: $320 a year, or $2,127 in 2012 dollars.

16

maidhc 10.24.12 at 7:48 am

This may be true of elite universities, but I don’t think it’s the case in an average state university, or as noted above, in community college. These places may have nice gyms, but they are only available to students by paying an extra cost about the same as membership in a commercial gym. There may be nice dorms, although I think they are not resort quality. But many campuses are surrounded by blocks of rundown apartment buildings catering to students who can’t afford the dorms. Student meal plans feature the same array of bland chains you would find in a medium-sized airport.

I don’t think these middle-tier universities are trying to provide a Rolls-Royce experience. They are trying to maintain what they have in the face of ever-decreasing budgets. They don’t need to compete with anyone because they are already turning away qualified applicants for lack of resources to educate them. And students already admitted are complaining that they can’t graduate because they are unable to get into the classes they need because the universities are cutting sections to save money. I think these are the more serious problems in higher education.

17

John Holbo 10.24.12 at 7:54 am

“Education is an investment (and the costs ought to be measured by the returns); leisure is consumption. Please, try to keep that straight in this discussion.”

This explains why we should value education more – or differently – but it doesn’t really speak to the cost issue. The fact that education is an investment, rather than consumption should not have any inherent tendency to cause it to be more or less costly relative to something that is a consumption good, rather than investment. My point is just that no one finds it surprising that going to a nice resort costs money. We are surprised that college is expensive because we are aware that, once upon a time, it was less so. But just looking at the thing itself, it looks like a thing that you would expect to be damned costly.

Separately, but worth noting: the more closely we stick to the ideal of the liberal arts, the less clear that it is an investment vs. a consumption good. Is going to the museum an investment or consumption? Is going to a concert an investment or consumption? Self-improvement to make you a more productive citizen/worker is hard to keep separate from self-improvement as a thing to make you happier, to make your life better, since you have been improved.

18

John Holbo 10.24.12 at 8:00 am

“Oh, and while I can’t say what the conditions were like at UC Berkeley in 1968, I can tell you what it cost to attend: $320 a year, or $2,127 in 2012 dollars.”

This is really why I didn’t want to say, in the post, that the change is due to increased quality of education. More bells and whistles. It clearly hasn’t changed that much, although there are more bells and whistles.

“I don’t think these middle-tier universities are trying to provide a Rolls-Royce experience. They are trying to maintain what they have in the face of ever-decreasing budgets.”

This is certainly true, and I suppose I should have made clearer in the post that I regard this as a sad fact of politics. In the face of less state support, what is to be done? Ideally, state support would rise. But what to do if it doesn’t? Go the Western Governors way or some other way.

19

John Holbo 10.24.12 at 8:04 am

Also, while I don’t claim to be an expert about what is going on in all the different segments of academia, I think there is a sense, even at cash-strapped state schools, that they have to try to emulate the Harvard model, rather than trying to do things very differently, given that they aren’t Harvard. The state legislatures want an ‘excellent’ state system, even if they aren’t willing to pay for it. The state universities are supposed to be things to be proud of, not bargain-basement knock-offs. That means they have to be expensive for students.

20

novakant 10.24.12 at 8:43 am

Here’s a thought: higher education should be free!

Germany has done it for 50 years, so why can’t other countries? (and yes, I’m aware the the neoliberal vultures are trying to undermine the German model)

21

Phil 10.24.12 at 8:48 am

I had a begging letter from my old (Cambridge) college a while back, talking about how hard up they are. The idea of a Cambridge college asking me for money has a certain intuitive implausibility, and I didn’t give them any money. But I was struck by the breakdown of incomes and outgoings showing that they genuinely aren’t breaking even at the moment, even if you factor in all the sources of income which are pretty much unique to Cambridge colleges (e.g. vast landholdings).

This makes me think that a big part of this equation is being missed: one reason why higher education is more expensive to users is that more of the cost is being passed on to them, because less of it is being met elsewhere. And the fundamental reason for that is The Economy, Stupid. In a growing economy institutions get good returns on their investments (including, but definitely not limited to, all those Oxbridge landholdings). In a growing economy companies make big profits and executives squeeze big rents out of them, so both companies and individuals have spare cash to donate. In a growing economy more tax gets paid, so the government has more money to put into higher education. Virtuous circle innit. We’re currently in a vicious ditto – in the UK at least – so the Can We Really Afford handwringing starts. I’m in the Yes we can corner – at least if ‘we’ don’t crash the economy for the sake of shrinking the state (although that’s another argument).

22

John Holbo 10.24.12 at 9:03 am

“Germany has done it for 50 years, so why can’t other countries?”

It is sad that there is little support. One thing that would be worth communicating to taxpayers is how little a portion of the cost of running their state universities their taxes pay. It’s quite low these days. But I think taxpayers don’t realize that.

23

faustusnotes 10.24.12 at 9:11 am

Japan definitely has three tiers of university, and everyone here knows it. The public ones all cost the same but have different admission requirements, and if you go to a lower tier uni you don’t get as good a job (in theory) afterwards. The high-quality ones (Tokyo, Kyoto, Keio, etc.) compete on reputation and quality of research and teaching, but cost the same as the lower tier ones; I think the difference from a student point of view is that you know a lower tier uni is easier to get into, but you won’t get as good an education.

Maybe that’s a model that works? It depends on most universities being seen as a certificate to a job, rather than education, however …

24

Alex 10.24.12 at 9:42 am

I suspect that if you swallow “Why do we have to have a lawn on the campus?”, then “Why do we have to have grants for poorer students?”, “Why do we have to have that particle accelerator – wouldn’t Khan Academy vids and two conkers on a string do?”, “Do we really need to subscribe to all these journals?”, “Why do you have to have health insurance?”, “DO YOU REALISE STUDENTS HAVE COLOUR TV? DO YOU?” etc will be along soon enough.

Anyway, there are plenty of city-centre universities in the world, so “why does the campus look like this” is a red herring. Further, buildings and land are a sunk cost. Getting rid is a one-off lump of money…that some arsehole can use as an election year gimme and will never come back, for no recurring saving whatsoever.

25

Alex Blaze 10.24.12 at 9:46 am

You can get rid of a lot of the frills without having people doing all online classes (I question the value of that just when it comes to education – it’s like telling people not to buy the rolls royce but instead to get a bicycle… for a cross country trip with the whole family and luggage).

The US spends 3.1% of gdp on higher education; the oecd average is 1.5%. No, students in other countries aren’t taking freshman comp in run-down malls. They just got rid of the frills that don’t matter – plush dorms, athletics, exorbitant administration salaries, funding through government spending instead of a rube-goldberg system of loans and grants designed to subsidize banks – and focused on the ones that do.

Also, comparing the college experience of today to that of 1970 and saying “No wonder it’s so expensive!” is glib. My college costs 20K/year more than it did when I went there… 7 years ago. Perhaps they provide a $20,000 better experience now than they did in the ancient 2002-2005 era, but I doubt it.

26

Katherine 10.24.12 at 9:50 am

The endless options for study thing is interesting. My entire experience of US universities is gained through TV and CT, so I don’t begin to claim any real knowledge, but there seem to be endless “majors” and “minors” and a menu-like attitude to what you’re going to study.

I don’t think choice per se is a bad thing – I had zero choice of what to study in my first year at university, and thus spent a quarter of my first year on the scintillating topic of Roman Law – but there must be, as you say, an enormous administrative cost is organising and staffing hundreds (?) of subjects for thousands of students. Is this a significant cost? If so, I’m going to say that a high quality education can be got without absolutely endless variation.

27

Alex SL 10.24.12 at 9:56 am

My home country – Germany – used to have only Volkswagen universities. Decent education for everyone who was allowed to go to uni*, zero elite universities. The problem is, too many people think that what the USA do is always better, empirical evidence to the contrary be damned. So what they are trying to do now is to have ca. ten Rolls Royce and everything else can slowly degrade to junker. Hooray.

But they don’t even do that well. The idea of the “excellence initiative” is basically to introduce more exams without hiring more lecturers, to rename the “Diplom” degree into “Master”, to run a competition that gives the universities with the best ideas a couple millions bucks extra but only for a few years, and to allow the winners of said competition to attach a fancy sign reading “official elite university” to their door. It would be hilarious if it wasn’t so sad.

The American elite universities are of course elite because they have considerably more money than Germany would ever be willing to invest, and they don’t need to win a sham competition because they win international rankings. On the other hand, I’d rather keep the old system. While no German university is as good as Harvard, all of them are better than some of the underfunded third rate colleges, rip-off law schools or even diploma mills that also exist in America. Less spread has some advantages even if it is not so charismatic.

*) And that is, of course, where the big inequality and stratification issue is hidden in German education, our completely bizarre three tier secondary education system. But that is another topic.

28

dsquared 10.24.12 at 10:02 am

I noted a while ago in the context of Grayling Hall that many American liberal arts colleges are more expensive than Harvard Business School (and that scholarships and other differences from sticker price don’t really change this) and that this suggests it’s not just about Club Med. I think it’s more likely about administrative salaries – very few Gentils Directurs are on a hundred grand.

29

Tim Worstall 10.24.12 at 10:03 am

Not entirely sure that online is a bad thing. We are after all in the middle of something of a technological revolution. And as Brad Delong likes to point out, universities are still based on the pre-Gutenberg technology of everyone having to gather in one room to hear someone speak.

You can do most London University degrees online for about £4,500. For the degree, not per year. LSE for economics, Birbeck (I think?) for philosophy etc.

30

Chris Bertram 10.24.12 at 10:25 am

I’m currently very pessimistic about the future for the UK. Outside Oxbridge it looks like the near future will bring NHS-style privatization, with a nominally not-for-profit core being supplied by for-profit companies (possibly owned and/or directed by senior HE managers in cahoots with venture capitalists) and increasingly authoritarian management (with all the formerly representative elements – in “old” universities- abolished). Naturally, the managements who are pushing this model claim that it is necessary in order to “compete” in the “real world”, but I rather suspect that to relatively good international performance of British universities depends culturally on the very features they are bent on abolishing.

31

Chris Bertram 10.24.12 at 10:30 am

_And as Brad Delong likes to point out, universities are still based on the pre-Gutenberg technology of everyone having to gather in one room to hear someone speak._

And as we’ve pointed out in numerous threads here at Crooked Timber, if your teaching consists of reading a text aloud for an hour to a passive audience, then you’re doing it wrong.

32

To 10.24.12 at 10:34 am

What Alex@25 said.

Plus, a bad case of inequality-enhanced cost disease. Education is expensive => Access is limited => Competence is rare and valuable => Universities have high salary costs => Goto 1.

You have to realize that, compared e.g. to their European equivalents, salaries for profs in the US are batshit insane.

33

Chris Bertram 10.24.12 at 10:36 am

You have to realize that, compared e.g. to their European equivalents, salaries for profs in the US are batshit insane.

To be fair, I think that’s only true for top people at elite institutions.

34

Phil 10.24.12 at 10:42 am

When I started working in IT ‘management’ was one option for career progression, albeit not the one most people chose. Ten years later it was the only option – staying a techie was career suicide – and a few years after that it wasn’t even an option: management wasn’t something you did, it was what you were. As for the techies, coders ye are and coders ye shall remain.

So, I got out of IT, did a doctorate, got a precarious job in academia, then another, then finally a partial lectureship.

When I started working in academia, ‘management’…

I’m starting to think it’s me.

35

Pat C 10.24.12 at 10:46 am

Obviously, different countries have different arrangements for funding universities. However, none are free in a meaningful sense. Either they are paid for through general taxation or some form of fee from the individual student. They may have got more expensive, but that is a different point to saying that they have become more expensive for individual students.

What I wanted to contribute here is something about the new funding arrangements in English academia. We are starting to see the effects of the move from part-personal/part-state funding of unversity degrees to a personal system of funding (STEM subjects partially excepted).

First, this new arrangment may well translate to a better experience for students, and I am slightly optimistic here against my instincts (working at Bristol University). In my brief experience of this new arrangement, students do not seem to have become rabid consumers: they are interested in quality and being treated with respect. And perhaps academics did not treat them with sufficient respect if they assumed that they would become rabid consumers. However, on this general point, I’ll reserve judgment.

My second point is that elite Universties, however, are in an enviable but unfair position: they can charge full fees, build new stuff, pay for the ‘right’ staff (with a massive premium for ‘public intellectuals’ it seems to me). Furthermore, they are sitting on (in some cases) hundreds of years of investment which provides the buildings and reputations upon which they rely upon to justify the charging of such fees. Under the new arrangments elite English universities will probably be able to pull further away from others, and the others are structually incapable of competing. I’m suggesting that the ‘market’, such as it is, is rigged in favour of, basically, old universities. These universities will do better under this new system, not because they are necessarily better, but simply because they are older. Good but newer universities could struggle, and we are already starting to see this occurring.

I would be interested in other contributors’ experiences on these points.

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J. Otto Pohl 10.24.12 at 10:57 am

33

Compared to most of their African equivalents salaries for profs in Europe are also incredibly high. But, I am all for equalization. My preference would be to raise everybody’s salary to whatever the privileged elite who post at CT make. But, barring an increase in salaries for faculty to the same level as Bertram, Farrell, and Quiggen I will settle for their salaries being reduced to our pay level here at UG. Equality is good right? :-)

37

Alex SL 10.24.12 at 11:00 am

About the online education issue, what Chris Bertram said covers it for the humanities. For the natural sciences, how would you even start? Ever tried to run a botanical field course or a lab practical in physical chemistry online only?

I think this idea consists of 50% internet-enthusiast pipe dream and 50% hope of some pencil pushers that they can fob the rubes off with cheap low quality pseudo-education if they only sell it in a fashionable package.

38

Henry 10.24.12 at 11:09 am

Surprised no-one has mentioned Aaron Bady and Mike Konczal’s new article on the death of the UC system yet. About to jump on a plane (to California coincidentally) but if I have a spare moment somewhere, may well do a follow up post on this.

39

Tim Worstall 10.24.12 at 11:10 am

@31 “And as we’ve pointed out in numerous threads here at Crooked Timber, if your teaching consists of reading a text aloud for an hour to a passive audience, then you’re doing it wrong.”

Pretty much what a lecture is (although obviously not a class). At the better universities it will be the person who wrote the textbook running through what has been written down in it, at the lesser someone at very best cribbing from it.

40

rootless (@root_e) 10.24.12 at 11:33 am

When I began working at a University, I spoke to administrators, faculty, staff, and students, and members of each group bitterly complained about how terrible the other 3 groups were. For some time I labored under the misapprehension that only one of these critiques could be correct.

41

BenK 10.24.12 at 11:42 am

I think it is worth considering ‘how we got here.’ After all, for a very long time (several hundred years), colleges/universities didn’t look too much like they do today. For a long time, they were associated with churches – basically seminaries, effectively professional schools in that they included law (canon) education. When they included medical schools, those were outgrowths of the professional guild (not in the technical sense, but good enough). Collections of professors taught, sometimes in informal spaces. Students lived in garrets and boarding houses.
Because these were particular entry points into particular professions, people in those professions wanted to bring talented people into their profession (or, conversely, thought that deserving folks should enjoy the benefits of the profession). Scholarships were created and awarded. The guilds competed in prestige; and as wealthy scions attended the schools, the wealthy parents provided for the schools. Similarly, as the church fragmented, each denomination wanted its own school. Thus schools became well-endowed, to a degree; and further, scholarship was established as a type of charity.
The land grant universities and technical/military schools (MIT, Cooper Union, USMA, etc) were distinctly American and in a different mold; the Germans, and later Johns Hopkins, imported the technical school model into the medical schools. These were supposed to be no-frills, for the education of honest labor in basically ‘educated trades’ – white collar industry, a new invention at the time. This at a time when the ‘professions’ (church, medicine, law – and politics) were effectively dominated by the upper class, with exceptions for the ‘scholarship’ students – and college was an entry either into the professional schools, teaching, or the class of more or less ‘gentle’ landowners.
It’s here that things start to get complicated, in my mind. The land grant schools started competing with the religious and other charitable educational institutions in prestige. This meant a requirement for grand (expensive, impractical) facilities and expensive faculty. However, they still charged the low tuitions they were meant to charge… or rather, they charged the populace, via taxation. The other schools started earning research funds hand over fist from the government as well – starting with Stanford during WWII, soon MIT, then Harvard and so on.
In addition, the genteel classes had been in full collapse since WWI (in part because of cheap corn from the midwest starting in the 1880s). Colleges were producing more of the white collar classes. The best colleges were the old ‘resorts’ of the wealthy, increasingly plush. The state started usurping the role of charity in providing ‘scholarship’ in the form of student loans, grants and such.

This is a very different story than the one about prices skyrocketing on a commodity item. Where we want to go from here, it isn’t necessarily clear, but yes, we should forget the silly idea that everybody needs four years in a resort to become an entry level white collar worker.

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rootless (@root_e) 10.24.12 at 11:46 am

Pretty much what a lecture is (although obviously not a class). At the better universities it will be the person who wrote the textbook running through what has been written down in it, at the lesser someone at very best cribbing from it.

Now that is easy to reproduce online.

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SB 10.24.12 at 12:35 pm

This is a nice article on how we got there: http://www.dissentmagazine.org/article/from-master-plan-to-no-plan-the-slow-death-of-public-higher-education

I think another question is: A top quality university education was virtually free 50 years ago. We weren’t a richer country then. So what happened? It has to be more complicated than ‘taxes were cut, anything public in the sense of beneficial was gutted’ (private university costs also went up) but that’s a significant part of the story.

It kills me to think about how there were the best universities in the world. Why squander that?

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Fu Ko 10.24.12 at 12:46 pm

What is this shit?

(1) It is eminently possible to put every person into a “resort”* for 4 years of his life. It may even be cheaper than to have the same population dispersed into various apartments.

[*] Assuming the “resort” provides the standard of living of a college campus. I, for one, would not pay a dime for any “resort” that jammed me into an apartment with 5 same-sex roommates sharing twin bunk-beds — let alone the price of a two-bedroom apartment rental.

(2) Are you talking about room and board, or tuition? A commuter college still charges $800+ per class. At every university, room and board are a small fraction of tuition costs. Don’t these well-known facts invalidate everything you’re saying?

If you are asserting that the cost of having a student live on a college campus is higher than the cost of that student living elsewhere, please provide some kind of data to back up your claim.

45

Lurker 10.24.12 at 12:47 pm

BenK is right.

However, I’d like to argue that the technical/military school was not typically American institution. It was an outgrowth of the French and German style of military and technical higher education. (In fact, early engineering education was essentially military education, as the French Ecolé Polytechnique still is. The fortifications and artillery were the main employers of engineers.)

Here on the European continent, the universities were (and often still are) typically free of tuition, even outside the field of teology. The universities were mainly producing future civil servants, so the tuitions were never high.

The really original feature of the American system is the vague, amorphous undergraduate degree:
1. The undergraduate degree essentially includes a lot of material that here in Europe is considered to belong to the high school. E.g. I studied history, foreign languages, philosophy and other “liberal education core” subjects only in high school. In the University, I only studied subjects pertinent to my field, and an odd language course on the German technical vocabulary of my field. Well, the American high schools are uneven, and you cannot require these as prerequisites as we do in Europe.
2. In Europe, it is typical that you receive a study right to study a certain field. For example, if you apply to the University of Helsinki as general history as your major, you need to re-apply if you want to major in Finnish and Nordic history. Similarly, if you apply to study electrical engineering in Aalto University, you need to re-apply if you want to change to I&C engineering. Each major has a quota that has been decided by the Ministry of Education, based on projections for future employment needs.

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Mitchell Freedman 10.24.12 at 1:07 pm

None of this matters if there were jobs at the end of the college-resort time. The reason people are getting angry is because kids go into big debt and at the end of the trip, there is little return, and so it becomes a not very good investment.

And there is something to be said for going to an elite school, because that is where contacts are made and developed. Not gonna happen at a community college for most people–and if it did, it would be real news.

What is actually needed is a recommitment on the part of our nation to subsidizing higher education. And what we need at the other end of college is to recreate demand by rebuilding the nation from the inside out. That means infrastructure rebuilding, tariffs to promote internal industry, and labor law reform to ensure the profits made are more evenly spread out.

Class dismissed.

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John Holbo 10.24.12 at 1:10 pm

Thanks for the link, Henry. I hadn’t seen that piece.

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Donald A. Coffin 10.24.12 at 1:10 pm

Most of higher education is *not* frill-dominated; most institutions are *not* striving to offer the Rolls-Royces of higher education. As witness the institution which I just retired from after 25 years, Indiana University Northwest. No luxurious dorms (actually, no dorms at all), no fancy dining options (just barely is there “food” available on campus), no fancy gyms or other recreation options…). But a good faculty doing (generally) a good-to-excellent job of teaching.

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John Holbo 10.24.12 at 1:20 pm

“Most of higher education is *not* frill-dominated; most institutions are *not* striving to offer the Rolls-Royces of higher education.”

I suppose that part of my post was unclear. I don’t mean that universities are frilly. I mean that even poorly-funded universities and colleges emulate better-funded ones in their basic organizations. There would be a certain logic to not doing that, if the funding situation isn’t going to get better. I don’t want to lecture Indiana University Northwest, of which I know nothing, about its profligate, spendy ways. I’m sure, like many a school, it’s pathetically cash-strapped, and I am far from wanting to add insult to that injury. What was the school like 25 years ago, as compared to now, cost-wise and condition-wise.

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geo 10.24.12 at 1:21 pm

Your statement that every U wants to be a Rolls and no one wants to be a Kia is manifestly false. Compare for example the UC vs. CSU systems in CA. Have you been to your local community college lately? Or ever? We have LOTS of Kias already. The reason college costs are rising so fast – although recent evidence suggests a slowing – is because state governments are subsidizing them less.

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Linnaeus 10.24.12 at 1:26 pm

I wonder to what extent the rise in the level of expected (and perhaps mandated) services from universities is connected to the rise in college costs. It’s understandable to be critical of the growth in the administrative layers of US colleges and universities and perhaps this is at least partially justifiable. At the same time, though, those same colleges do more than they did in the past, e.g., provide subsidized IT services, help for students with disabilities, etc. And it of course costs money to provide those services.

52

ezra abrams 10.24.12 at 1:40 pm

At one level, this is asilly debate; in afree market economy, somehing is “worth” what a willing buyer is willing to pay; noone is holding agun to my own head to make me shell out close to 60K this year ; I’m doing it voluntarily (ok, maybe the spousal equivalent would do a lysistrata, but thats a personal story)

At another level, this is about the 30 year (roughly since 1975) decline of the working and middle class, and the desperation for a better standard of living that leads to more demand for college, coupled with cutbacks in state funding

However, at a 3rd level, on every standard where I feel, basedon my own personal experience, I can make a judgement, I do NOT see universities making any effort to rein in costs

I don’t know how to price most of the things that a college offers.
One thing I do think I can price is textbooks, and esp intro text books; these are clearly priced at an obscene level.
If educators are willing to – I use this word advisedly – rape their students over texts, it stands to reason to think that they are not being careful in other matters.

another thing I know is the fancy brochures that my daughter recieved in her senior HS year; the amount of money that went into these mailings is also obscene, and even more obscene is the cost of the post acceptance “brochures” which were like Ferrari ads.
I look at the buildings being built – admittedly, my sample space , Harvard Med, Princeton, NYU, Colgate, is *really* skewed, but again, I see obscene buildings
I look at the salary of CEOs like M Yudoff, or the president of Dickinson in PA, and again, I have a feeling that I’m competant to judge (if not spell) and it is wrong.

My dad told me many years ago, harvard could have whatever faculty it wanted, cause it paid 2x yale, and yale paid 2x more then anyone else (I’m pretty sure J K Galbraith confirms this)
so there will always in our free market economy be some upper tier Rolls Royce Schools.
But what I see is 3rd or even 4th tier schools – Dickinson say, with out being prejorative – pricing themselves the same way

So, on everything I feel that I can judge, I see colleges NOT being careful with my tuition money

I also see gov’t failing, miserably, to fund college, and fund trades (german style) programs etc

53

harry b 10.24.12 at 1:49 pm

There’s really no mystery about tuition. Elite education is a positional good, and the gains of growth in the past 30 years have gone to about 1% of the population, who have fewer kids than other people, and have bid up the price of an elite education very high. They can’t spend all that new money on cocaine and yachts, and they want to secure advanatge for their kids. On top of that, girls now compete for places that were previously available only to boys. Their kids, having grown up in huge homes, with all sorts of luxuries, expect those things in dorms (and foreign vaacations etc) and that drives up the price of dorms etc. Costs have not risen anyway near as precipitously in other parts of the sector — and to the extent they have risen it is the Baumol effect driving it.
Not nice, but there it is.

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Clay Shirky 10.24.12 at 1:56 pm

Second @Phil #21 — when you break out calculations of cost vs. price, what you see is that part of the recent price rise, esp at public US colleges, is the lowering of state subsidy of cost.

Let me also recommend Robert Archibald and David Feldman’s Why Does College Cost So Much?* Archibald and Feldman diagnose a bad case of Baumol’s cost disease. The defend this thesis in several different ways, including noting that college costs were flat in the 1970s, when productivity improvements in the rest of the economy stalled, and that since the early 1980s, college costs have risen in line with other fields that require skilled labor (e.g. dentists) but not unskilled labor (e.g. housecleaning.)

Archibald and Feldman conclude that institution-specific explanations — spoiled students expecting a climbing wall in the gym; management self-aggrandizement at the expense of the educational mission — don’t hold up. The price of attending 2 year colleges, presumably less Roll-Royce-like than 4 year colleges — has risen at the same rate, and that the costs for room and board, the site of many lifestyle upgrades, have risen more slowly than tuition.

Instead, they conclude that the generic observation — colleges need a lot of highly skilled people, people who have commanded a significant wage premium since the 1980s — is the most significant source of the cost increase, an increasing amount of which is passed on to students and their families as a price increase.

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Linnaeus 10.24.12 at 1:56 pm

Elite education is a positional good…

This is a good point, and though I’m by no means an expert in economics, the positional aspect of a college degree makes me a little skeptical of some of the ideas out there to bring college costs down.

56

Tom 10.24.12 at 1:59 pm

John, I think mentioning $50,000 a year is misleading. First, that includes boarding costs and you would pay some of those even if you did not go to college. Second, in U.S. one can go to the public universities of her/his state. I just check tuition and fees for some of those (if you are resident of the state):
- Ohio State U: $10,037
- UNC: $7,694
- UC Berkeley: $7,492.75

Even at public universities, usually there is financial aid available if you cannot afford these figures.

Third, quite a few that go to the expensive private universities that cost $50,000 (inclusive of board) get some form of financial aid.

Now, as some above suggest, support for public education at the state level has been dwindling. So, the (relatively) low prices mentioned above may increase in the near future and we may rightly be concerned about this.

But we should distinguish between:

“Every kid should have the opportunity to go to college”

from:

“Every kid should have the opportunity to go to Duke”

57

bianca steele 10.24.12 at 2:02 pm

The mall idea is interesting to me, because I’ve been wondering about: Is it weird to have, say, dance or yoga classes, in what otherwise seems to be a medical building, or one of those office buildings where you don’t know what what anyone does, but they all seem to be either insurance offices or probably really work for the CIA? Or what used to be a warehouse space? Is it “unprofessional,” because it doesn’t look right? Or is it exactly what you would expect?

I think if you think it looks “unprofessional,” you’re probably not going to be happy with campus spaces that have cinderblock or old paint on the walls, either. Or with wooden lecture-hall chairs that are “quaint” and 75 years old and haven’t been refinished in quite some time. You’re paying $20,000/year and they can’t even refinish the chairs? And so the tuition creeps up to $30,000 and beyond.

58

Bloix 10.24.12 at 2:04 pm

“Four years of resort living”

My two boys are currently experiencing “luxury resort living” at high-priced, highly ranked, well-endowed liberal arts colleges.

Here’s what luxury resort living means:
- Two men living in a 18×12 room with a single small window, a linoleum floor, flourescent lighting, metal frame single beds, pressed-board furniture, and no air conditioning.
- No bathroom, kitchen, or sink.
- Shared bathroom facilities for two dozen people down a corridor.
- All cleaning and washing done by the residents. All supplies purchased by residents at their expense.
- Meals at restricted hours served in a cafeteria.

So you can take your “spoiled kids these days” little rant, old man, and put it where the sun don’t shine.

59

bianca steele 10.24.12 at 2:10 pm

To be fair, the older campuses really did need a lot of work so kids could plug in their computers without blowing a circuit breaker. AFAIC a microwave is a luxury, but a printer actually isn’t, and there were rooms built on the “a blow drier or hot plate is a luxury” principle.

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PatrickinIowa 10.24.12 at 2:21 pm

I teach two classes in classrooms that are, quite literally, infested with box elder beetles.

The problem is that parts of campus do look like a luxury resort–the fitness center, the administrators’ offices, the business college, the common areas–while others are as Bloix suggests. (Although my son’s liberal arts college dorm is quite nice and he has a single room.)

The disparities are not lost on the students.

First thing we do, let’s kill all the plasma screens!

61

Bloix 10.24.12 at 2:22 pm

“Perhaps part of the luxury of the university is that it provides things which one might expect any thorough welfare state to provide: health care, parks, community centers, basic housing, food (though typically only the parks and community centers are part of the tuition cost).”

This is a truly bizarre statement. How is it luxury to provide cafeteria food at a profit? To charge above-market rents for multiple-occupancy dormitory housing? To provide a minimal first-aid health care service? (If you have a serious health problem, you deal with it on your own – and the school won’t admit you without evidence of health insurance.)

And yes, some schools have very nice, large lawns. But those that do typically bought that land generations ago, and they don’t pay real estate taxes. So provision of “parks” costs them only the cost of groundskeepers.

The one thing I will give you is that schools do provide state-of-the-art gyms.

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John Holbo 10.24.12 at 2:24 pm

“So you can take your “spoiled kids these days” little rant, old man, and put it where the sun don’t shine.”

Well, it’s clear the Club Med analogy is getting taken in the wrong way. The point is: college is expensive because it provides a lot of things. No one is surprised that Club Med is expensive because it provides a lot of things. No one should be surprised that college is expensive because, when you count up the number of things college provides, it’s actually quite a lot. I didn’t mean to say that every college provides the same thing that Club Med provides any more than I meant to imply that you can count on finding a great university library at Club Med because it costs as much as college, if you break it down.

Clay Shirky is right about Baumol’s disease. I should have put personnel costs higher on my list of things that add to cost because that is obviously the main driver. Buildings and computers and so forth are expensive, too. But it’s mostly people. The point I should have made in the post, which I try to make upthread, is that poorer institutions emulate larger ones in their overall structure. It’s not about whether you have bathrooms in each room or at the end of the hall.

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JM 10.24.12 at 2:31 pm

I’m surprised that the discussion has focused so heavily on the supply side and not the demand side. Given the wage premium for college grads, high tuition might be worth it in many situations. And not just at elite schools — any college degree confers considerable lifetime earnings benefits on a graduate. That reflects both the stagnating wages of blue collar labor and to the disproportionate share of income that the wealthiest cohorts earn. If the only way to make a decent living is to go to college, kids will naturally be desperate to go to college, and if more kids are desperate to go, colleges will need to find a way to discriminate among them. One handy tool is price (others might include SAT scores, GPA, athletic ability, etc.). Unless states are willing to subsidize colleges to increase enrollments or to directly subsidize students, the price will need to go up to meet the demand. Some of that demand, at least at the top end, will come in the form of Veblen good-style prestige competition, but it is grounded in the fact that going to college does make a huge difference for one’s lifetime financial success.

I also found this report from the College Board on tuition costs, and it made an interesting point: in terms of institutional costs, the greatest increase from 2000-2006 came in “utilities” (72% increase), the second was in “benefits” (31%), and the third was “administrative salaries” (26%). The benefits part makes sense (health care), but who knew colleges were spending so much more on power and water? Is that related to all the new gyms and swimming pools?

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Bertie 10.24.12 at 2:31 pm

@53 is right; Baumol’s cost disease explains most of what is going on here.

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J. Otto Pohl 10.24.12 at 2:33 pm

58

A personal printer would certainly be a luxury. I as a permanent faculty member do not have my own printer and have to share with a dozen other lecturers. Neither as an undergraduate in the US or postgraduate in the UK did I own or know any students who had their own printers either. I am holding out for the day when the administration does provide us with funding for more printers in the department.

66

LFC 10.24.12 at 2:38 pm

E Abrams

My dad told me many years ago, harvard could have whatever faculty it wanted, cause it paid 2x yale, and yale paid 2x more than anyone else

This might have been the case when your father said it, but it is not true now and has not been true for a long time.

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Cranky Observer 10.24.12 at 2:39 pm

“Baumol’s Cost Disease” is one of those confounding conundrum/paradox theories that has the ability to bring everyone’s brain to a halt, but I have seen zero proof (mathematical or empirical) that it actually exists. The conditions that Baumol describes have existed since the first comfortable agricultural surplus was safely stored away (perhaps 10,000 years ago), yet human progress had not recursively stopped back to that day – even in symphony orchestras.

Cranky

Salaries of symphony Presidents have increased 20-fold since 1990 though…

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Linnaeus 10.24.12 at 2:40 pm

I as a permanent faculty member do not have my own printer and have to share with a dozen other lecturers. Neither as an undergraduate in the US or postgraduate in the UK did I own or know any students who had their own printers either. I am holding out for the day when the administration does provide us with funding for more printers in the department.

As an aside, in my department (in a large US state university), printing is done through the department office; faculty and graduate student instructors don’t have their own printers (though I know at least a few have brought their own to campus). And there are restrictions on printing too, e.g., if you’re a graduate student and you want to print, your print job must be for instructional materials only and it can’t be, say, your seminar paper.

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J. Otto Pohl 10.24.12 at 2:51 pm

65

I have considered purchasing a printer and bringing it to campus. But, I would need to make sure that the university provided the toner cartridges for it. Otherwise while the printer is affordable, multiple cartridges probably are not, especially since the temptation to print out journal articles and books rather than read them on my lap top would be pretty great if I had my own printer. But, I am glad to hear that you large US state university is no better equipped in this matter than my very large flagship African university. Perhaps equalization is occurring. When our salaries reach parity then we can throw a party. I will bring the fufu. ;-)

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Harold 10.24.12 at 2:52 pm

Maid service used to be included in the early nineteen sixties in student dorms in the USA.

Off-campus housing near colleges in the USA is scare and overpriced. Landlords near American colleges prey on students and charge exorbitant prices and fees and use punitive methods for collecting rent.

Chinese students are 7 in a room in bunk beds (with very high ceilings and a laundry section room with terrace off it for hanging clothes out to dry). The cafeteria is spacious and serves decent food. Students and faculty eat there. Han Chinese families must save up to pay tuition. Chinese Minority students pay no tuition.

71

William Timberman 10.24.12 at 2:53 pm

I suspect that the campuses of many public U.S. universities look the way they do for the same reason that there were chandeliers in Moscow subway stations, i.e they were intended to function not as resorts, but as Potemkin villages. Certainly, accommodations in the dormitories were nothing like what the façades promised — most resembled barracks rather than hotel rooms — and were often very cheesy barracks at that. Which is why owning a substandard apartment building in a college town was often a license to print money.

Things have changed, but not that much, I think. The idea is still to give physical embodiment to aspirations that the founders hope to engender in the students they’ve managed to enroll, congratulate their inevitably vain private donors on their good taste, and awe legislative critics into submission to the University’s budget requests.

Is all of the frippery necessary? Probably not, but one-time money is always easier to pry loose from the unsuspecting than continuing money is, and a secure, familiar environment is one less thing to worry about when you’re trying to make sense of the internal architecture of the universe, and/or your own place in it.

Universities, for all their shortcomings, were a place to hide away for a while from the Philistines — yahoos demanding to know why professors insisted on doing comparative studies of the microbial content of dirt from the different regions of Burkina Faso, or parents wanting to know why their kids weren’t studying something useful and lucrative, like Hotel and Restaurant Administration.

That sort of refuge is impossible these days, it seems. Should we congratulate ourselves? Somehow I doubt our new pragmatism is as much of a good thing as we’re all making out, but clearly we need to come up with something else. I just hope Phoenix University isn’t what we finally settle on.

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David J. Littleboy 10.24.12 at 2:55 pm

#42 “At the better universities it will be the person who wrote the textbook running through what has been written down in it,”

Hmm. At my undergraduate institution (MIT), the lecture classes tended to be elder statesmen types who were passionate about the material and engaged in figuring out good ways to get it across. I TA’ed one such class (the Materials Science alternative to freshman chemistry) (as a grad student about to drop out and study Japanese literature: it’s a long story), and preparing two one-hour sessions a week was the hardest work I’ve ever done in my life. FWIW, we had “tuition riots”, and I think the chant one year I was there (1975 or so) was “twenty-eight hundred, too damn much.” That was a lot of money for my family back then, and I lived at home.

Also FWIW, my understanding of the Japanese system differs from faustusnotes #23: What I hear is that the top tier are the national schools. Period. And they’re much cheaper than the second tier private schools (Keio, Waseda). And third tier and lower are expensive as well. The entrance exams appear on the surface to be draconianly democratic: pass the exam and you are in. But in real life, the only people who can pass the exams are people raised in an affluent family without disruptions (like divorce).

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OGT 10.24.12 at 2:55 pm

As I think you hint, it’s not instruction costs driving up the price of college, it’s the amenities. The question is not, why can’t we have a KIA. It’s why did we move from a Honda to a Mercedes. And should we go back?

Here’s the , on college costs, biggest increases in Research! and student services. How much publishing is a pure waste of resources? Can some services be unbundled from tuition?

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JulesLt 10.24.12 at 2:58 pm

It collapsed the moment that Conservatives stopped talking about their nation as a Civilisation and started talking about it as an Economy – at which point, University education becomes merely inefficient job training.

(Unless you went to one of the proper Universities, of course).

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Chris Bertram 10.24.12 at 2:58 pm

@53 is right; Baumol’s cost disease explains most of what is going on here.

Actually, that wasn’t what Harry said. He said that Baumol’s cost disease explains some of the rise, but that the principal cause is the 1% bidding for a positional good.

76

Daniel 10.24.12 at 3:17 pm

This is misleading. Between 75 and 80 percent of college students attend public institutions, which used to be very cheap because they were generously supported by the states. And now they aren’t. The net price of private institutions (what students actually pay to attend school there) has actually gone down in recent years.

You write:
“I don’t see any big infusion of public money coming down the pipe. Can things go on as they are? Or must the whole higher education paradigm shift – maybe even collapse? If so, what’s the least bad way that can happen?”

Um, this isn’t a natural phenomenon like an earthquake. It’s a result of policy decisions. We should make different policy decisions in order to achieve different outcomes. We could send everyone in America now attending public college to school for free for between fifteen and thirty billion dollars.

In 20011 this country spent $20 billion in Iraq and Afghanistan, on air conditioning.

77

Bloix 10.24.12 at 3:25 pm

“college is expensive because it provides a lot of things.”

That’s not how pricing works. It’s my belief – although it’s only a belief, because as far I have seen, good data is not available – college is expensive because the sellers of college can charge a lot for it. They can do that because lenders will lend whatever the colleges charge, with the government guaranteeing that the money will be repaid. Students are mortgaging their futures in the same way that unsuspecting home-buyers were pursuaded in the 2000′s to buy lovely new homes that they couldn’t afford. And the buyers – the students and their parents – are utterly unable to do an appropriate analysis of the return on their investment.

Making the most of this no risk federally-guaranteed money, the schools jack up the “rack rate” as high as they can. The top schools can pocket most of the money, although some of them are wealthy enough in endowments that they can give out a fair number of genuine scholarships. The next tiers use the full tuition they get from their dumbest/richest students to cross-subsidize prices for smarter, less wealthy students in order to raise the level of the entering classes. They call the difference between rack rates and the discount prices “scholarships” although they are not true scholarships at all. Does the airline that charges a lower price for reserving two weeks in advance say that it’s giving out “flyerships”?

Because the schools are competing on prestige more than price, and because the buyers – high school students and parents – are unable to form any useful views on the quality of the comparative quality of education being provided , the schools build beautiful gyms and hire big grounds crews to sell the schools to parents. At the same time, schools hold academic salaries steady and cut the number of jobs by farming out teaching duties to grad students and adjuncts, degrading the educational experience.

Most of the money, I believe, goes to pay inflated salaries to ever-larger armies of administrators. But I’ve never seen a genuine analysis of university expenditures over time. How much have library expenses increased – and how much of that goes to Elsevier, providing no value at all to students? Has the total amount spent on instruction increased compared to the rate of inflation – and how much more are “star” professors who don’t teach undergrads taking home? How much more do university presidents get paid, and how much larger are their staffs? How much is spent on marketing and fund-raising? How much on varsity sports teams that don’t benefit the average student at all? Without real data, it’s simply apologetics to say that college is expensive because it provides a lot of things.

78

MQ 10.24.12 at 3:25 pm

Suppose you wanted to go live at a luxury resort for four years. You’d expect that to cost, wouldn’t you? (No one is going to write an editorial raging about how if you wanted to live at Club Med it would cost you at least $50,000 a year – probably more.)

you would expect *room and board* at a luxury resort to cost a lot. But the college argument is about tuition, not room and board. Basically none of the services offered through tuitition only at a university have an analogy at a Club Med, with the possible exception of the gym membership (which the college could also charge separately for if desired). So please retire the analogy.

79

MQ 10.24.12 at 3:27 pm

As Cranky said @67 Baumol’s supposed ‘cost disease’ should be retired from these kinds of discussions. Or at the very least reformulated in a dramatically more modest way (e.g. rather than saying some things are ‘naturally labor intensive’ which is idiotic, say that if we choose to make something labor intensive it may cost more).

80

Katherine 10.24.12 at 3:39 pm

Maid service used to be included in the early nineteen sixties in student dorms in the USA.

Bedders were employed to empty bins and clean rooms in college accommodation when I was Cambridge University in the 1990′s, and a quick Google search confirms that they still are. Is this what you mean by a “maid service”?

Now, Cambridge colleges in general have oodles of cash and they charge the highest fees possible in the UK, but it does still seem to be possible to provide what could be described as a top university education, with bells and whistles, for fees of considerably less that $50,000 per year.

81

John Holbo 10.24.12 at 3:39 pm

“The net price of private institutions (what students actually pay to attend school there) has actually gone down in recent years.”

Is this really true? That’s quite interesting.

“Um, this isn’t a natural phenomenon like an earthquake. It’s a result of policy decisions.”

Did you really think I thought universities just sort of bubble out of the ground?

82

Anarcissie 10.24.12 at 3:41 pm

Perhaps I missed it, but it seems no one has mentioned that a major function of the education industry is class filtering. In America, the classes have pulled apart in terms of income and net worth, so gateways to middle- and upper-class status like college have become more valuable, and thus more money can be charged for the service they provide. This is apart from any sort of value received (if any at all) in the form of learning, which seems to be of tertiary importance (preceded by credentialization and socialization — learning how to make, and making, the right connections — for most education consumers). As class positioning becomes more and more important to a person’s fate, expect the charges for providing it to rise.

83

Clay Shirky 10.24.12 at 3:54 pm

Cranky #67 and MQ #79,

If the phrase Ost-Cay Isease-Day bugs you, cross it out in the text; the argument won’t be damaged by it’s loss. Why Does College Cost So Much? looks at the economics of college and other service industries to form its claims; Archibald and Feldman use it as a label, not an explanation.

Their argument is that explanations of the high cost of college have to be considered in light of several related correlations: First, as a fee-for-service business, college tuition closely tracks the cost of visits to the dentist, but not the cost of getting your nails done. Second, college tuition remained largely unchanged during the Great Compression (of productivity and wages) of the 1970s. Third, since the early 1980s, tuition at poor 2-year colleges has risen at the same rate as tuition at rich 4-year ones, while non-tuition expenses at 4-year colleges have risen more slowly than tuition at those same rich institutions.

Taken together, A+F conclude that the most significant input to the cost of college (which they think of as the more important metric than price) isn’t the brand new climbing wall or the Infotainment Center replacing the dusty old stacks, but the wage premium commanded by skilled labor: faculty, administration, and even a shift to higher-skilled workers, as with the disappearance of the typing pool, and the appearance of the IT department.

84

Lurker 10.24.12 at 4:06 pm

Actually, a typical US university tuition cost is not extraordinarily high, if you account for the fact that the states do not subsidise almost at all. I checked the data for my Finnish alma mater. By a quick analysis of their budget, you can see that a five-year integrated bachelor+master in science in a STEM field costs there (at present) about 105 k€ to the university.

This comes, in Finland, fully from the taxpayer’s pocket, but as annual tuition, it would be about 20 k€, i.e. 25 grand. In that university, about 30 % of all applicants are accepted (only high school students with math studies corresponding US AP courses are qualified to apply, reducing the applicant pool.) and the graduation rate is ca. 66%. Nationally, the institution is considered first-tier and on European level, a respectable research university. A professor leading his own research group commands a salary of 60-100 k€ per annum.

The room and board are not included in these figures: In Finland, student housing is not the responsibility of the university, but of the student union and the city, which govern the municipal non-profit student housing corporation. The food is served by private or student-union owned cafeterias which are state-subsidised: a lunch may not cost more than 4.54 euros, of which the state pays 1.84 e. In my experience, living cost is around 4000-6000 euros per annum (of which the state grants cover max 4500 euros).

Based on this data, I would say that if the university does not receive any state assistance, the reasonable tuition, including room and board, should not be over 35,000 dollars. If it is more, there’s something vacuuming that money away.

85

Clay Shirky 10.24.12 at 4:07 pm

…and I just saw that Harry and I made similar arguments in #53 and #54, so Cranky and MQ may have been responding to that appearance of Baumol. In any case, WDCCSM? meets MQs test of making the case in a modest way, and providing several sorts of economic correlations on which to judge their argument.

86

Coulter 10.24.12 at 4:10 pm

“but the wage premium commanded by skilled labor: faculty, administration, and even a shift to higher-skilled workers, as with the disappearance of the typing pool, and the appearance of the IT department.”

Except the wage premium for your first two categories are determined by … your first two categories. There are no shortage of energetic PhDs willing to work for a lower premium. As for administration, they are like corporate CEOs, all above average, and paid as such regardless of results…

87

Scott Martens 10.24.12 at 4:11 pm

You had to post this the day I’m working on my first application for a tenure-track post?

Okay, I guess this is my problem now. So far, I’ve been paid out of research grants that acted as non-tuition subsidies rather than prof pay, but if I get that teaching job that will change I suppose. A quick check shows that the university I’m applying to sees about $16000 in revenue per student and charges $2250 a year in tuition ($75 per credit hour based on a 30 credit school year). About 50% of budgeted expenses are payroll for teaching staff.

Now, to be fair, this is not an American university. But really, under the circumstances, I’m not sure holding classes at the mall is going to lower expenses unless wages are cut. A look at the CSU systems’ budget is not that different except in the amount of subsidy received: expenses of about $20000 per student, and tuition at $13000. It costs $7000-$12000 a year to teach a full-time undergrad in teaching staff costs alone. Administration and facilities costs do not look that out of control to me when compared to other industries.

Administration could be cut by having teachers collect fees directly from the students. Lessee… $75 per student per credit hour per semester for three credit cattle class Intro to Linguistics comes to $11250 for 50 students… I can use the same PowerPoint as last year, so it’s not too bad on prep time, just a midterm and a final and three hours every Tuesday at 8:30am. Not so bad, as long as I don’t have to read papers. But what’s it going to cost me to rent the space at the local cineplex? And only $3750 for the 10 schmucks who register for a semester of slogging through Jurafsky and Martin for 5 credits, and I have to run the labs? Not such a good deal.

Unless some kind of “accredited freelance teacher” deal is set up (and, I personally, believe in tenure because I want it very badly), I don’t see how realistic it is to lower expenses.

88

bianca steele 10.24.12 at 4:17 pm

Otto:
I’m not quite seeing how it’s costing the university money to not provide printers for students’ use, free computers or terminals, and plentiful public Internet access; as opposed to costing them money to rewire dorms so they can handle more than 20% of the student body using a computer at any given time, and so they have ethernet and the equally old phone lines aren’t overwhelmed by kids using dial-up. In the 1980s when I was in college, CD players and computers were still fairly rare, humanities majors almost never used computers, and the circuits were still blown on occasion.

Or is your point about the semiotics of it, like the dads who think it’s strange to have a kids’ music class next to an insurance company, with no special, commercially produced signage or anything? I’m not sure the semiotics of letting kids who can’t afford printers take their chances with not getting papers in on time is better.

I live near what used to be a Normal School, now I think a third-tier state university. Presumably it all used to fit in one or two lovely late 19th-c. buildings, at the top of a hill, with lots of space around. Now they have dorms, library, student center, parking lots, campus police and bus service. The dorms that were built in the 1950s and 1960s are quite ugly (and one has had an “emergency heat and hot water” truck parked outside since Monday at least), and probably couldn’t be built as cheaply today. Popular majors include IT (expensive) and health sciences (expensive). Should the cost for that be in the state education budget? Maybe not. Could they save on the shuttle service if they were in a downtown instead of a medium-sized town with limited bus service? Maybe. Is there a societal benefit in having the kids live on-campus five days a week instead of at home or in a neighborhood with few appropriate apartments? Maybe.

89

AcademicLurker 10.24.12 at 4:39 pm

Taken together, A+F conclude that the most significant input to the cost of college (which they think of as the more important metric than price) isn’t the brand new climbing wall or the Infotainment Center replacing the dusty old stacks, but the wage premium commanded by skilled labor: faculty, administration, and even a shift to higher-skilled workers, as with the disappearance of the typing pool, and the appearance of the IT department.

Well faculty salaries certainly haven’t increased at anything like the rate at which tuition has increased. The cost of benefits has increased significantly, but that’s the same healthcare cost nonsense that’s squeezing everyone, because our system for financing healthcare is insane.

Is it just that colleges employ more people now than previously?

90

lupita 10.24.12 at 5:06 pm

gateways to middle- and upper-class status like college have become more valuable, and thus more money can be charged for the service they provide

Perhaps for men. For women, I would say beauty gets you further up the social ladder (via marriage) than any PhD.

91

Harold 10.24.12 at 5:07 pm

Isn’t it also in part because big donors like to contribute buildings with their name on it, and these require a lot of energy to maintain.

Also, liability insurance is incredibly expensive — because the exorbitant cost of health care is a big incentive to sue. If healthcare and pensions were state supported (also middle income housing), personnel costs would be arguably be much lower.

92

Austin 10.24.12 at 5:22 pm

The problem is not the COST of education, it’s that the education is subsidized by the government and the debt taken on isn’t dischargeable in bankruptcy. This eliminates any need or desire for institutions to compete on price–students have no concept of the amount of debt they are incurring and in fact are brainwashed to believe it will “pay off” in the long run.

Your example of Western Governors is a good one given the current economic climate, but the problem is that the education offered by WGU is very hit or miss. I received my Masters in Education from WGU, which was a very good program give the model. Their Master in Business Administration degree, on the other hand, is a joke, focusing on the lower levels of knowledge (e.g. define the key terms, list three factors) rather then the higher domains of knowledge like synthesis, analysis, or evaluation that are more appropriate for a graduate degree. This is due to the difficulty in grading/evaluating proper graduate level work (the MBA program is MUCH MUCH larger then the MEd program), and their desire to maximize return rather then education. I believe the competency model has value give how education currently ’works’, but the dichotomy between the two schools shows that it is difficult to ensure quality education using that model, and the fact that one school is so subpar truly limits the benefit of another degree at the same program due to the effect of poor reputation.

However, there is little need for schools like WGU if the free market had more influence on the business of education. THe “competency based model” is only necessary/desirable in a world where other options mismatch price to value. If one is “competent” then traditional education should not be difficult. If the education has value, a competent person should still get value in the form of a better understanding or ability to apply that knowledge. If simple competency is key and the person is already competent, why are they going to school except to ’buy’ a diploma (which was effectively my purpose)?

Removing federal subsidization from education or allowing bankruptcy for student loan debt (and forcing some of the ’pain’ of that bankruptcy back onto the school that incurred the debt) would do more for the state of higher education then any other action that could be taken in the area, and may head off the coming student loan crisis (though at the expense of hurting our growing education industry).

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Bloix 10.24.12 at 5:24 pm

#83 – “the wage premium commanded by skilled labor: faculty, administration, and even a shift to higher-skilled workers, as with the disappearance of the typing pool, and the appearance of the IT department.”

I simply don’t believe that this is true.

Tuition at private colleges has gone up about 3% annually in constant dollars (i.e. the rate of inflation plus 3%), year-in, year-out, for forty years. See, e.g., http://www.collegeboard.com/prod_downloads/about/news_info/trends/tuition_fees.pdf

Over that period, full-time faculty salaries have gone up only 7% in inflation-adjusted dollars. http://www.nea.org/assets/docs/2012_Almanac_Faculty_Salaries.pdf

Adjunct compensation has actually fallen after inflation over that period, id., and adjuncts make up an increasing portion of the academic work force.

The “disappearance of the typing pool” has meant a shift in performance of adminstrative duties from staff to the faculty members themselves. People do their own typing, copying, and mailing now, and their own filing.

Wherever the money is going, it’s not going to people who provide instruction to students.

94

Josh G. 10.24.12 at 5:43 pm

Four years of resort living does not sound like a model that can, in fact, be available to everyone.

Why not? We’re a rich country. It just sometimes doesn’t seem that way because almost all of the added wealth of the past 30+ years has been appropriated by a tiny elite.
If college is not to be a universal experience (and there are reasons besides cost that it might not be – some people just don’t have the intellect or temperament for it) then we need to get serious about providing good middle-class jobs for non-college graduates. Like it or not, this means protectionism, immigration restriction, and strong labor unions. There’s no other way. Either that or we say goodbye to the middle class and hello to the Third World.
We most certainly can afford to provide college for those who want it and good blue-collar jobs for those who don’t, if it is actually a priority. But the priority of our current political classes has nothing to do with what normal people want. Studies show that politicians pay no attention at all to what people in the bottom 50 percent of the income distribution want, and only scant attention to even the upper middle classes. Only the preferences of the wealthy actually count.

95

Harold 10.24.12 at 5:47 pm

Katherine. This is exactly what I meant. They were definitely not employed at the institutions my two children attended in the nineties and oughts, and the results were deplorable.

96

Astroprof 10.24.12 at 6:01 pm

@Bloix: at my SLAC, not only have faculty salaries risen faster over 40 years than the 7% average would imply, but the student faculty ratio has fallen from 17-1 to 10-1. This is an enormous factor in the cost increase, and arguably also the source of a large quality increase, as students have access to expertise in fields not previously represented, to languages not previously taught, and to close collaboration with faculty in labs and art studios that would have been unheard of 40 years ago.

Obviously, the same is not true in the majority of institutions. The challenge in the University of California is not a cost challenge at all — the total expenditures per student have actually been falling in recent years, it only looks like they are rising because of the abandonment of higher ed by the taxpayers. It is nonsensical to look for the reason for UC cost increases in administrator salaries, climbing walls, or athletics, even if it makes great political theater for people like Bob Meister, the SF Chronicle, and the state legislators. The simple fact is that costs are not rising.

The lesson to draw is that these arguments about college cost are useless if they lump the whole sector together.

97

Sebastian H 10.24.12 at 6:22 pm

LFC, Obama went to Harvard Law School and Clinton went to Yale.

I agree with those who suggest that college education has at least some large component of being a positional good (prestige in this case). Government subsidies to the purchasers of positional goods translate to higher prices because the main point of positional goods is to show that you have something better that someone else doesn’t have. If the subsidy is in the form of loans, this leads over time to enormous student debt. If you are going to subsidize something with a large positional component, you probably need to do it on the supply side if you don’t want the price to skyrocket.

98

Metatone 10.24.12 at 6:52 pm

To avoid derailment, let me just say first of all that I’d love to see a CT discussion about the meaning of Baumol’s Effect (as opposed to the existence, which seems definitionally sound.) In particular, there’s a lot buried in there about scarcity of labour vs capital etc.

99

Richard 10.24.12 at 7:00 pm

Wouldn’t it be more helpful to focus on the change in college total budgets, rather than the change in tuition prices, to sort out what is happening? The tuition is obviously greatly affected by the steep decline in public support, but the budgets are a separate issue. I have no idea what the trendline might be on college budgets per full time equivalent student, for example.

100

mdc 10.24.12 at 7:18 pm

1) It is true that net tuition (gross tuition minus financial aid) has stayed even or dropped over the past ten years at many liberal arts schools, at least, even while the sticker price goes up. This suggests not that costs are going up, but that people are getting poorer.

2) Stripped down, no frills liberal arts core curriculum with next to no administrative overhead, no pool, no stadium is still extremely expensive.

101

John Quiggin 10.24.12 at 7:24 pm

I’ll repeat a peripheral point from my comment earlier. An almost-definitional feature of a resort is that you go away to it, and “going away to college” seems to be taken for granted in much of the US, even in the state systems. As quite a few posters have said, that seems likely to drive accommodation costs higher than if students went to university in their hometown as in Australia. On the other hand, it would seem as if some costs ought to be lower, given the availability of cheap land for expansion and so on.

Still, it seems to me to be empirically correct that going away to college goes with high costs.

102

Bruce 10.24.12 at 7:36 pm

Leaving the market aside for the moment, is it efficient for professionals providing an essential public service to receive more than is necessary for them to have an enjoyable, comfortable life near the top of a (somewhat lower, but still eminently adequate) income spectrum?

I suppose the answer is “NO!” if we are talking about civil servants or even unionized workers, who apparently have to be strictly controlled for the common good in order to ensure that services remain affordable to all.

If university professors are “elite,” however, instead of being providers of what is considered an essential public service, they cannot be placed under any controls other than “what the market will pay.”

I mention this because during my PhD at a Canadian university in the 1980s, the faculty started drifting away to the US, drawn by higher salaries. Were they unhappy before? Not that I noticed. They had professional esteem and were making a decent salary doing a job they enjoyed.

The same thing happened with doctors and nurses at that time, who were also drawn to the US by higher salaries.

As Alex Blaze mentions in an earlier post, “The US spends 3.1% of gdp on higher education; the oecd average is 1.5%.” Similar figures can be given for healthcare.

Living by the market, while dreaming a dream of public services available for all is a bit schizophrenic. Change the problem definition and maybe a solution will be possible.

103

Bloix 10.24.12 at 8:22 pm

John Quiggin-
Look, Holbo has now explained the “resort” thing and I understand the point of it, but please, give it a rest. You have no idea how offensive it is to parents whose children are at college in the current economic environment. Yes, going away to college is like spending four years at Club Med. It’s also like serving a prison sentence, like doing missionary work, like being kidnapped by Peruvian rebels, like recovery in a rehab hospital. Unless you’re trying to piss people off, “resort” is a crappy analogy. Let it go.

104

Bertie 10.24.12 at 8:33 pm

@92

But we need that data for total compensation, not just salaries.

105

Troy Voelker 10.24.12 at 8:48 pm

A few decades back, we changed the routing of funding for education and new costs emerged as a consequence. This began as necessary state level budget cuts, but was eventually touted as bringing choice to students. At any rate, as senior administrators I listen to periodically joke: ‘we used to be state funded, then we became state assisted, in a year or two we’ll be fortunate to be state located.’

With budget cuts, we now receive the same contribution per student that we did in the 1990′s, with costs courtesy of 2012. The difference has to come from somewhere.

But it’s so much more than just a great recession, rising health care costs, technology investments or general inflation. A part of the explosion in student (perceived) cost is nothing more than shifting from subsidy to direct billing.

However, when we made this transition, our mission changed (whether we realized it or not). We now have a dual mandate – the development of knowledge AND the recruitment of students.

We now have to build our system around attracting and retaining students, and with that a whole new slew of expenses emerge.

You NEED new facilities (not just to use new technology), but to make your University attractive to students choosing where to spend their dollars. You NEED better entertainment and a high quality athletic program to attract students and retain alumni commitment. These needs then NEED new administrators to administrate the new needs. All of this then leads to a NEED for new administrators to beat the bushes for new money to pay for the salaries of those we need to manage the things we now need.

It’s all quite rational in a thoroughly irrational sort of way.

Atop this, of course, we have a woefully inadequate financing system for the bottom up pay model we now use as others have noted.

Simply reversing the funding spigot would not, I suspect, solve this problem at this point. We have institutionalized administrative bloat – and that’s not turf protecting, greedy middle management. Quite the contrary, those new administrators are NEEDS in the system we have re-engineered. It’s a somewhat logical system response to our sourcing needs for our primary dollars (student tuition and fees). I doubt we can simply put the lid back on this box.

106

Mike 10.24.12 at 9:39 pm

Why look, yet another discussion of the skyrocketing cost of higher education that doesn’t even mention ECASLA! Fancy that!

Four years ago, Congress/the Bush Administration passed a law that, writ large, obliged the Dept. of Ed. to buy guaranteed student loans from private lenders. The almost-immediate consequence of this was that lenders no longer had any reason whatsoever to not loan as much money as possible to any student that applied. Bigger loans mean more interest, after all, and if the federal government puts itself on the hook for default, there’s no risk to the lender.

The rest is pretty obvious.

107

Bloix 10.24.12 at 9:44 pm

@100- And you think that benefits have zoomed ahead of salaries for academics over the past four decades. Better pensions? More inclusive health care plans? Earlier retirement? More sabbaticals? Company cars, flats with parquet floors, free child care? What?

Look, I’m just trying to introduce some data into this free-floating conclusion-jumping parent-bashing student-condescending thread. College is like choosing between having another pina colada and taking a ride on the parasail! Student housing is like the Ritz Carlton Montego Bay! Batshit insane salaries! Baumol’s disease! Elite signalling!

It’s a fair point that my data isn’t sufficient to draw firm conclusions. It’s just a little googling, that’s all. But you can’t say, “I reject your data and therefore I’m free to go back to drawing conclusions out of my navel.”

108

Bloix 10.24.12 at 10:20 pm

“Actually, a typical US university tuition cost is not extraordinarily high”

I graduated from a reasonably good US liberal arts college in 1978. Annual tuition averaged about $5000 – about $17,500 in today’s dollars. Today tuition (without room and board) at my alma mater is $44,000.

I have been back to my alma mater, and they’ve built some nice buildings over the last 34 years. But no more than they’d built in the preceding 34 years. Course offerings are similar and class sizes if anything are larger. And the endowment is up.

What can possibly explain a 250% increase in constant-dollar price over thirty-five years? The professors and staff are paid 10% more, perhaps. Certainly not 2.5 times more. The land, bought and paid for even then, costs nothing. The lawns are not more beautiful today, the ducks in the canyon are not more demanding of breadcrumbs. My alma mater offers its present-day students “a lot.” But no more than it offered me at a little more than 1/3rd the price. Where does the money go?

Something has happened, and it’s something that every college administrator must know the answer to. But it’s not in their interest to tell, and so the rest of us sit around gabbing about how the country just can’t afford decent higher education anymore and the children of everyone except the rich will have to suck it up and attend college in their pajamas from their parents’ basements.

109

dbk 10.24.12 at 10:21 pm

I attended a large land-grant university in the 1970s (UIUC); iirc, my folks paid about $120 a month for my room and board in a (very nice, new, though spartan) dorm – I had a merit-based tuition scholarship, so tuition wasn’t a consideration, though I recall it being about the same as room and board.

My children attended university in the 2000s (00-04 and 07-11); the elder went to an Ivy League institution at a cost of $35,000 p.a. (about half of which we paid for, the other half being a combination of scholarships and loans), while the younger attended a nationally-ranked liberal arts college at a cost of $40,000 p.a. (again, half paid for by scholarships, the other half paid by loans and the parents, i.e. us).

All three of us received excellent – outstanding, really – liberal arts educations, but to be perfectly honest, I feel that I (and my folks, who had very little money) got the best deal – a BA summa cum laude at a cost of under $5000, loan-free.

Re: “bells and whistles”, hmm. The clean, spartan dorm I lived in in 1971 was tons nicer than the dorm child #1 lived in in 2001 … or that child #2 lived in in 2011. Amenities? Very similar, to be honest.

As the founding dean of a liberal arts college in Europe in a former life, I would recommend that anyone interested in the subject of skyrocketing college costs consult the very instructive statistical tables published yearly in the CHE.

110

Mike 10.24.12 at 10:23 pm

“Something has happened, and it’s something that every college administrator must know the answer to. But it’s not in their interest to tell, and so the rest of us sit around gabbing about how the country just can’t afford decent higher education anymore and the children of everyone except the rich will have to suck it up and attend college in their pajamas from their parents’ basements.”

ECASLA happened.

There is no limit to the amount of money lenders are encouraged to loan to students, so there is no limit on what universities feel like they can charge for a service our country has gleefully banded together over the past 20 years to make completely indispensable.

111

Bertie 10.24.12 at 10:27 pm

@101

Health care costs and defined-benefit pension costs have been rising at rates much higher than inflation. These are benefits that are still widely available in the education sector. (Well, more available than they are in the private sector at any rate).

The poster who first brought up Baumol’s cost disease did not pull the argument out of his navel — he cited a book about college costs.

112

Tony Lynch 10.24.12 at 10:29 pm

Dear John,

It is over.

(I’m so miserable without you its almost like you’re here)

113

Tom Hurka 10.24.12 at 10:29 pm

When you look at the faculty salary component of a university budget you also have to look at how many courses a faculty member teaches.

When I was an undergraduate at the university I now teach at the course load in my department was 3-3, maybe including one graduate seminar. Now it’s 2-2 including a graduate seminar. So undergrad courses taught by a faculty member have dropped from 5 (or 6) per year to 3. You can see the same pattern at many other Canadian universities, e.g. the one I used to teach at, and I suspect at US ones too.

It’s all been in aid of research, which in the data OGT links to has had one of the biggest increases in expenditure in recent years. Universities have in effect transferred resources from teaching to research and are asking undergraduates to help pay for that. I’m not sure why they should think that’s a great idea.

114

mdc 10.24.12 at 11:13 pm

Sorry to repeat myself, bu people keep asking ‘where did the money go.’ I suggest we should really consider *net* tuition. I don’t have data going back very far, but plenty of colleges have raised the tuition sticker price year after year *without increasing net tuition*. In other words, higher prices do not mean additional revenue (at least not nearly as much as you’d think).

Another point: technological advancements might actually make education more, not less expensive. Colleges offer more and more technological services for faculty and and students, but don’t make any (hardly any) productivity gains thereby– it’s just an added cost. What was the IT budget at typical College X 20 years ago?

115

Salient 10.24.12 at 11:14 pm

I am just suggesting that we should see it as normal and to be expected that if you go and live somewhere that provides you with a lot of stuff, much of which you would expect to be costly, you should expect it to cost you.

That’s not true at all. Most soldiers aren’t paying anything to their government in exchange for all the costly stuff they get (equipment, training, room and board, etc). Paying for them and their stuff is considered a good investment for the government to make, but not because the government is actually profiting off each soldier’s work, the way businesses profit off their employees. The soldiers are provided with the tools, support, and accommodations they need to be effective soldiers. We sink lots of money into paying for soldiers and soldiers’ costly stuff because having a lot of well-equipped well-trained soldiers generates substantial positive externalities for the entire economy. Insofar as having a lot of well-equipped well-trained college graduates generates substantial positive externalities for the entire economy, the government should finance that too. Students should be provided with the tools, support, and accommodations they need to be effective graduates.

Ok, so, sure, this is not a very good argument at all, but neither is analogizing Club Med, is my point. They both miss the boat by about the same distance, even if we set aside the unintended ‘luxurious leisure’ implication.

116

greg 10.24.12 at 11:15 pm

I think part of what we are seeing is a transfer of wealth from the younger generation to the older. Nick Rowe used a rather concrete example at:

http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/12/debt-is-too-a-burden-on-our-children-unless-you-believe-in-ricardian-equivalence.html

and started quite a conversation in the blogosphere.

But what would you expect to see if the older generation was involved in transferring wealth from the younger? Not only would the younger generation be poorer, which would translate in part as greater income disparity, but you would see decapitalization, which in education would result in higher direct costs to students, and the greater accumulation of student debt. You would expect less taxpayer support to education, at all levels, and thus a decline in its quality, at all levels. You would see it in high youth unemployment. You would also see it in declining support to science, which the Republicans are most vociferous about, and decreasing concern for environmental issues, such as global warming. Also declining quality of infrastructure, which the young could expect to get more use out of than the old. You would see it in the declining wages and incomes of the 80%, who would contain more of the younger generation, at the beginning of their earning careers, and in part the rocketing incomes of the 1%, who would mostly be in the older generation, reaching the end of theirs.

What we see, however, is not intergenerational borrowing, but the older generation using its political and financial power to extract wealth from the younger, quite literally by laying a burden of debt upon the younger generation, their own children, which they then demand be repaid. And all the talk from the Republicans about ‘privatising’ Social Security and Medicare, and cutting benefits from the poor, who are disproportionately the younger, is all of a piece with this. It is the defrauding of the young out of their heritage. So, too, is ”laying ‘The Debt’ on future generations.”

So not only is there class warfare going on, the 1% vs. the 99%, but inter-generational warfare going on, now the Baby-Boomers vs. their grandchildren, the other generation caught in the middle. (You can have more than one war at once.)

The increasing cost of higher education is just one piece to the picture.

117

liberal japonicus 10.24.12 at 11:15 pm

College has and continues to be, for better or worse, a rite of passage. That rite of passage starts to break down when you start having large influxes of non-traditional students, but here in Japan, that number is miniscule, so getting parents (and society) to think of education in cost terms is impossible. There is also a strange relationship with the demographic decline and the way universities are trying to change but I can’t tell if it is wrapped up with problematic aspects of conservative thinking in Japan or not.

118

Bloix 10.24.12 at 11:34 pm

#104 – fair point. I haven’t read the book. Much of it is available in full text here -
http://www.amazon.com/Why-Does-College-Cost-Much/dp/0199744505#reader_0199744505

and its authors have a blog, here -
http://whydoescollegecostsomuch.blogs.wm.edu/

and they’ve been interviewed on NPR and written op eds at various places.

The thing is, the Baumol effect works only where employees in an industry experience no productivity gains, but their salaries rise because people with the talent to acquire the skills needed for those industries can be more productive and thereby make more money elsewhere, and therefore competition for their labor drives their salaries up.

But the empirical evidence that I’ve found is that the salaries of academics have not gone up much, even including the effect of “star” professors that don’t teach very much. I suspect that the overall cost to a school of faculty salaries has gone down due to the use of adjuncts.

This is possible because universities generate their own excess labor pools by admitting too many people into graduate programs.

As far as I can tell, Archibald and Feldman do not have data on actual faculty salary expenditures. There’s none in the excerpted portion of their book and they don’t mention any on their blog. From what I can see, they substitute syllogistic reasoning – productivity has gone up everywhere but in the university, and therefore faculty costs must have gone up! – for data. Perhaps Clay Shirky can look in the book and tell us otherwise.

#106- this is also a fair point and a genuine possibilty. And it has nothing at all to do with all the wonderful options that universities offer their students. The reverse, in fact.

119

Bogdanov 10.24.12 at 11:37 pm

If most of Club Med’s “beautiful buildings” were paid for and named after rich donors, a substantial percentage of its services provided by indentured servants (aka graduate students), and it passed itself off as a non-profit, I would think twice about paying $50k to stay there for 2/3 of the year.

The student debt situation is becoming a crisis, and although I can’t articulate the precise reasons why tuition is rising uncontrollably, it certainly has nothing to do with the amenities or the services offered. Harvard, Berkeley, et al. are not substantially better institutions than they were in the 1960s, for example, and I would be interested to see but doubt that the diversity of academics offered is actually that much greater.
Obviously enrollment is way up.

My guess is that tuition continues to rise because the percentage of young Americans who feel an overwhelming social pressure to attend college has risen. In the 1960s it was a select group of people going to college. Now it is axiomatic that you are supposed to go to college. Naturally, the market has exploited that fact by charging students exponentially more. Because schools can get away with it these days.

120

John Holbo 10.24.12 at 11:43 pm

“The soldiers are provided with the tools, support, and accommodations they need to be effective soldiers. We sink lots of money into paying for soldiers and soldiers’ costly stuff because having a lot of well-equipped well-trained soldiers generates substantial positive externalities for the entire economy.”

And presumably, were soldiers to have to pay for all that stuff themselves, we would expect them to have to pay a lot for it? It sounds pretty expensive, right?

“Something has happened, and it’s something that every college administrator must know the answer to. But it’s not in their interest to tell, and so the rest of us sit around gabbing”

Does it really seem plausible that there is a vast conspiracy of administrators who actually know the answer to this question, and the answer is different than the answer offered in all sorts of books on the subject, and yet this wall of silence is maintained? Surely someone somewhere would defect to the side of freedom?

121

maidhc 10.24.12 at 11:50 pm

Judging costs at private universities in the U.S. can be difficult. Some universities find it better from a public relations point of view to announce, e.g., the tuition is $50K per year, then hand out $20K in “financial aid” to just about everyone, rather than say that tuition is $30K a year.

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Watson Ladd 10.24.12 at 11:55 pm

Well, education has 2 functions. One is credentialing, the other is improving productivity. But something tells me that a great deal of the jobs for which a college degree is required, the impact of that degree is quite minimal compared to the value of the credential.

As for the cost side, the number of administrators has increased dramatically. UChicago now spends 2/3 of all salary money on non-faculty staff. That’s a shift from 1/2 in 1990. The data is out there: nonprofits in many states have to file annual financial statements. So no conspiracy: it’s just that firing half of all the administrators isn’t usually an option for some inane reason.

123

Cranky Observer 10.24.12 at 11:56 pm

= = = Melatone@6:52: To avoid derailment, let me just say first of all that I’d love to see a CT discussion about the meaning of Baumol’s Effect (as opposed to the existence, which seems definitionally sound.) = = =

I understand your point about derailment, but the question of whether or not the postulated Baumol “effect” exists and whether it applies arises in every discussion of college costs, since if it does it is fairly central.

And I’ll state explicitly that I question whether it even exists in practice, making it unlikely to be the root cause here. The structures of the institutions most often cited in support of the Baumol Hypothesis, symphony orchestras and universities, have existed in much the same form since the 1500s and have continued to exist through periods of great wealth increase in their surrounding societies (e.g. California 1920-1970 – stupendous wealth increase whilst high-quality colleges remained relatively affordable). Yet it is only since 1980 that the “cost disease” seems to have struck these institutions in such a devastating fashion. Hmm.. what else got started in 1980? The transformation of US society (at least) into one based on extreme forms of winner-take-all structures and the active assault on reasonably equal sharing of created wealth. Coinkidinks.

Cranky

124

Bloix 10.25.12 at 12:15 am

“Does it really seem plausible that there is a vast conspiracy of administrators who actually know the answer to this question”

Yes.

Read this, about GW:
http://www.washingtonmonthly.com/college_guide/feature/the_prestige_racket.php?page=all

“What Trachtenberg understood was that perception is reality in higher education—and perception can be bought. “You can get a Timex or a Casio for $65 or you can get a Rolex or a Patek Philippe for $10,000. It’s the same thing,” Trachtenberg says… The GW institutional model—embracing high tuition, excessive construction projects, and massive undergraduate debt—has become the dominant one in higher education, and every university president seems to want to be Stephen Joel Trachtenberg… A whole host of second-tier national universities operate in the same manner: they spend on the things that U.S. News measures, and they pay for them with practices that U.S. News doesn’t care about, like student loans… [F]ewer and fewer courses are taught by tenured professors, and that class sizes have gotten larger over the years. When GW was a cheap school, introductory economics classes had 160 students, he says. Now, despite the new higher tuition costs, they run to 270… ”

Trachtenberg was paid $3.7 million in 2007-2008.

One thing that’s not in the article – presumably because the data isn’t public – is how much the GW faculty take home and how that’s changed over time.

Do you read Paul Campos’s Inside the Law School Scam? There are two defectors from the vast conspiracy to cheat law students that he documents – himself and Brian Tamanaha – and they have emerged only recently, and get little press. And the data they rely on is much more readily available than faculty salary costs to universities. Plus, unlike administrators, they have tenure, and can speak without fear for their jobs.

There are a great many seamy things that stay hidden from outsiders for years and years. The finances of private universities is one of them.

125

Marc 10.25.12 at 1:08 am

The two obvious ingredients are extremely high capital expenses and a dramatic increase in administrative overhead. The latter is reaching 20% of cost, from a much lower historical baseline. The former is enormously expensive. Neither student to teacher ratios nor faculty salaries have changed significantly over the last 30 years, so the one area that isn’t changing is direct instruction. Tuition has risen much faster in public US universities because of a withdrawal of public support, which is frankly a disgraceful abandonment of youth from my generation.

So you should use private universities as your benchmark, not public (because of the support issue above.) The rate of increase of the two will converge as the public universities have so little public support left to lose.

126

Marcus Webster 10.25.12 at 1:18 am

Very interesting discussion, touching on most issues around university costs that I have heard in 30 yrs teaching at US lib arts colleges. One item missed, and it’s always fun to repeat, is the student-dissing “Education is the one thing that people are willing to pay for and not get.”

Generally my experience conforms, for the small US college, to the 4 yrs of summer camp model. And yet it works, and those students who aspire can generally afford it via needs-based financial aid and merit scholarships that reduce costs to about 65% of rack rate overall, so that well-off families support others.

Study-abroad programs, IT facilities, athletics facilities are all much more important today than in my long ago time, and these have contributed to higher costs as have admini-bloat and the arms race of facilities. But as others have said, most US students attend state schools or community colleges and the rising cost of higher ed can plainly be directly related to lower tax dollar support. Globally, it seems to me, we are pricing educational attainment — positioning — so that only the advantaged will be continue to be advantaged. Same as it ever was.

127

Dr. Hilarius 10.25.12 at 1:25 am

I can’t find any listings for faculty pay at the University of Washington. What I can find is that the current UW president has a base pay of $550,000 a year. This is a reduction of $100,000 from the prior president. That doesn’t include deferred compensation of $193K a year on a five year contract. Oh, there’s also this mansion that goes with the job.

These salaries seem to stem from the idea of the University as Corporation. You need to pay big bucks to get good CEOs is the theory. I’m sure that there are competent administrators willing to work for a bit less even if their cocktail party chatter might be below par.

The highest paid UW staff member is the football coach (who is also the highest paid state employee by far) who gets $1.98 million a year base pay. Lots of other compensation as well. The usual story is that the football program pays for itself but I’m skeptical of that, particularly adding in a new stadium now under construction.

Apparently, donors will give to the sports program what they won’t for academic programs. All a matter of priorities.

128

Bertie 10.25.12 at 1:33 am

@106, @111

Yes, and the ratio of research to teaching is not wholly distinct from the compensation/Baumol debate; academics typically value jobs that offer more research and less teaching as having some combination of more “compensation” or less “work” than the reverse.

This is not just a matter of scoring points in an Internet comment thread debate, because it gets at how (or whether) the problem can be fixed — it means any attempt to reduce costs by making faculty teach more would fail (if faculty compensation is subject to Baumol cost disease) because the faculty would in the long run claw back the implicit “pay cut” in some other form of compensation.

129

Pseudonymous McGee 10.25.12 at 1:35 am

I’m surprised nobody has mentioned this article http://nplusonemag.com/bad-education

Basically, it argues that the rise in tuition costs is attributable to financial-sector gaming of government student debt guarantees. Student debt is attractive to private sector lenders (lendors?) because it can’t be discharged in bankruptcy. So, emboldened by the gov’ts subsidization of the risk of default in private student loans, lenders issue more loans. Schools see that the market can bear higher tuitions because loans are more freely issued, so tuition rises. As tuition rises, there is more demand for loans, etc etc.

I don’t know how big a role this cycle plays relative to more intramural factors, but considering the role of gaming, grasping and outright fraud in the mortgage debt collapse, I wouldn’t be surprised if the same unholy alliance of spastic debt markets and complicit/captured/incompetent gov’t regulation was behind tuition rise as well. As consumer debt categories go, student debt now rivals mortgage debt in value and risk of default. The same kind of money attracts the same kind of predation, absent meaningful reforms (and they are absent).

130

LFC 10.25.12 at 1:36 am

Bloix @102:
I graduated from a reasonably good US liberal arts college in 1978. Annual tuition averaged about $5000 – about $17,500 in today’s dollars. Today tuition (without room and board) at my alma mater is $44,000.

I haven’t been following the whole thread but I want to agree w/ Bloix’s implication, in the rest of his comment, that this is really nothing short of a scandal. I graduated from an ivy univ. in ’79. I was so oblivious, for lack of a better word, and so relatively lucky in not having to worry about such things (though not from a rich family), and the costs were so much more reasonable than today, that I don’t even remember what the tuition/rm/board costs were. But they were far, far lower than the current. Like Bloix, I have gone back on occasion to the institution which I attended and I see no improvements so drastic as to justify the absurd increase in costs. The cost of buying books and periodicals and e-resources for libraries has undoubtedly gone way up, thanks to gouging by unscrupulous for-profit publishers and outrageous, stupid pricing policies by quasi-academic presses, but not enough to justify the increases in tuition etc. Ditto for other costs. No univ president shd make what Trachtenberg makes. That is a scandal all by itself.

I am not very swayed by the ‘it’s a positional good’ argument and the notion that rich consumers have bid up the costs. I maintain that universities have a responsibility not to act like any other business and charge whatever the market will bear b/c they are not like other businesses. They are non-profit, exempt from taxes. They want it both ways: to behave like businesses — raising tuition way beyond inflation, hiring adjuncts instead of tenure-line faculty — and yet not pay taxes. This, to repeat, is a scandal. (And I don’t know what Baumol’s effect is — so much for my liberal arts education.)

131

LFC 10.25.12 at 1:42 am

Nor am I v. swayed by the “dramatic increase in administrative overhead.” Some of that is for marketing and PR people — their functions are peripheral to univs, or should be.

132

Omega Centauri 10.25.12 at 1:49 am

I went to a large land grant in the early 70′s. My twin boys are Juniors at different UCs. What I’ve seen of living arrangements is pretty much as Bliox described in 58, they have the same sort of crappy cramped rooms, I had in 1970. The big difference is the food, we had entirely prepaid all you can eat meals. The choice was minimal like: Shepards pie or Spaghettit, but the stuff was adequate and cheap. The cafeteria was not a profit center, and charged about what it took to break even with food purchased in bulk, and prepared in bulk by student labor. Now all on campus food resembles corporate cafeterias, changing by the item, and the same prepackaged items are usually 3times what you could pick them up for in the grocery store. So food costs have skyrocketed along with the range of choices.
The rest of the stuff doesn’t seem much different from when I went to school, overpriced textbooks. Only submitting work via internet is new.

Off campus housing, crappy as I remember it. Even for my son in a UC with ultracheap central valley housing to rent. The rooms are great (better than what I have at home even), but you still get to stay in a house that never uses airconditioning even though the average high in September is a hundred -or heat in the winter. Resort, I think not.

133

Kaleberg 10.25.12 at 2:18 am

There are some interesting breakdowns at The Delta Project (www.deltacostproject.org/analyses/index.asp, http://www.deltacostproject.org/resources/pdf/Trends2011_Final_090711.pdf). They discuss revenues and expenses at various types of colleges, focusing on the previous decade. Judging from their numbers, the primary reason for rising tuition has been the withdrawal of public support in just about every state. (The vast majority of students go to state schools. The private colleges are barely relevant.) There has also been an increase in benefits costs, most likely driven by rising medical costs and possibly higher pension costs, but faculty salaries have been flat, and more and more faculty are poorly paid part timers who don’t get much in the way of benefits. There doesn’t seem to be much of a Baumol effect since wages have been flat or, effectively, falling and just as many, or more, students are being educated.

You can argue about the quality of the education that colleges produce, but an educated work force is economically valuable. Cities and states with good colleges can support businesses that need educated workers. Dropping state subsidies is just part of the general disinvestment that has been pushed for decades by the right wing. They scorn the baser rungs by which we have all ascended. A friend of mine always said that the baby boomers will eat their young, and that is what is happening. We boomers took advantage of everything our Great Depression surviving parents could offer us, and are doing what we can to deny it to our children.

134

SamChevre 10.25.12 at 2:19 am

As for the cost side, the number of administrators has increased dramatically.

Dean Dad, at Confessions of a Community College Dean, says somewhere (I can’t find the quote right now) that almost all the increase in “administration” is in three areas: IT, financial aid, and disability/disadvantaged student services.

135

Omega Centauri 10.25.12 at 3:11 am

I was thinking about the supposed position good of a degree, recalling what my older son said yesterday. He is getting a music degree at a private college. He benefited from the fact his classmates weren’t terribly motivated to earn money -so he got the lions share of gigs at the local churches, and local piano students. Now he has sufficient income to be independent of his parents, whilst 80% of his classmates had to move back in with mom & dad, and take jobs as retail clerks. I suspect college as a positional good only works for certain old-boy network dominated careers, and music isn’t one of them. Or maybe it used to function as a useful positional marker, but has now effectively broken down.

136

Donald A. Coffin 10.25.12 at 3:52 am

Holbo: “I don’t want to lecture Indiana University Northwest, of which I know nothing, about its profligate, spendy ways. I’m sure, like many a school, it’s pathetically cash-strapped, and I am far from wanting to add insult to that injury. What was the school like 25 years ago, as compared to now, cost-wise and condition-wise?”

Me again: About the same total budget (adjusted for CPI inflation) and the same number of students (about 6000), although in 1987 about 2/3 of that was state funding and 1/3 was tuition, whereas now it’s about 1/3 state funding and 2/3 tuition. About the same faculty, with more–but not a lot more–administration. The infrastructure hasn’t changed much–two new (replacement) buildings–but a lot more being spent on technology (e.g., all classrooms are now computer/web equipped & wi-fi is ubiquitous). Much more on-line instruction, mostly with students who are primarily in face-to-face classes (on-line is a scheduling option, not a degree-completion option).

And, actually, the extent to which the institutions I am familiar with that are in situations similar to IUN’s try to emulate “flagship” campuses is smaller than I think most people are aware of.

137

mbw 10.25.12 at 3:56 am

There are four-year-universities that cost quite a bit less than $50,000 per year. This post makes it sound as though the options are Tony Liberal Arts paradise or well, some sort of online education-lite as that’s the best we can do. But until very recently, state colleges and universities were reasonably affordable even for the working adult. I work at one. We’re not trying to be a SLAC; I’ve worked at those, too, and can tell the difference in ambitions, amenities, and so forth.

It’s more expensive than it was because more students are going to college at the same time that budgets have been cut, so students have to pay more and take out more loans. It is not going to my salary, and nor do I have a 2/2 load and lots of grad students to do the grading.

I’m not sure why you want to put my job in the mall, exactly, out of some sense of democracy? But you seem to be overlooking the existence of vast areas of higher education. Not everywhere needs to be Harvard. But the option shouldn’t be Harvard or well, maybe Western Governor’s can take your tuition money or maybe University of Phoenix.

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Sebastian H 10.25.12 at 6:46 am

“I am not very swayed by the ‘it’s a positional good’ argument and the notion that rich consumers have bid up the costs. I maintain that universities have a responsibility not to act like any other business and charge whatever the market will bear b/c they are not like other businesses. “

I hope you don’t think I was describing college as a positional good in a laudable way. The positional good argument is descriptive of what appears to have happened. I’m certainly not arguing that universities ought to raise their prices as high as the government backed-not dischargeable in bankruptcy loans will bear. But it looks like maybe they do….

139

Fu Ko 10.25.12 at 9:50 am

This idea about renting space in malls being a money-saver is also nonsense. Renting commercial space is very expensive. Land grants are free. Even if you have to pay for the physical building, it’s cheaper, in the long term, not to have to bid against Starbucks for square footage. After all, the mall owner has to pay for the building too, and he does it with the revenue provided by the rents.

140

Jan K 10.25.12 at 9:56 am

Good article. I myself, is lucky to live in Scandinavia, where all universities are free, including the best ones. I went to Uppsala university in Sweden, and despite being a Finnish citizen I payed zero in tuition, and still got a good education.

Freedom can also mean freedom from anxiety of not being able to afford sending your kids to college, or not being able to afford health care.. That’s a freedom I prefer to the freedom Paul Ryan is talking about.

141

Alex 10.25.12 at 10:31 am

Regarding the daft Michael Gove why-don’t-we-have-schools-in-empty-storefronts thing, it’s daft because anyone who’s been a student, much more so anyone who’s been a prof, knows that timetabling is an epic pain even if you’re all on the same campus or all in the same building.

Putting classes in bits and pieces of idle retail space means an enormous amount of pain timetabling, and a substantial time-sink due to travelling between them, plus a higher rate of students (or teachers) not turning up. There is a reason why people build buildings. (Also, space is not homogenous. Good luck if you need computer centre, lab, workshop, or studio space.)

142

Douglas Brooks 10.25.12 at 11:10 am

I live near Middlebury College in Vermont, where the last fifteen years has seen an explosion in sports facilities, playing fields, and gorgeous dorms, (to be fair a huge science center, art center and main library as well), and among students, faculty and staff there is a well-worn nickname: Club Midd.

143

Alex SL 10.25.12 at 11:35 am

Referring back to the online courses issue, I just found this snarky post elsewhere:

http://highclearing.com/index.php/archives/2012/10/11/15303

I think that tangentially touches a big issue that is bugging me about the enthusiasm for digitization of learning: When we are in our late teens and early twenties, we are not all at our most disciplined and focused. If you design the system to be a bit school-like, with groups of students showing up for pracs, courses and lectures together, having a planned and structured day etc., there is a good likelihood that it works. If, however, you assume that you can plop recorded lectures onto the internet and that age cohort will be organized and ambitious enough to work through it all at home or in a park, with their tablet or whatever is the rage these days in their lap, I think that would be a bit overly optimistic.

Surely it will work for some, but one cannot expect perfect maturity from all university students; one has to design the system to engage them in the right way.

144

Anarcissie 10.25.12 at 1:37 pm

Watson Ladd 10.24.12 at 11:55 pm:
‘Well, education has 2 functions. One is credentialing, the other is improving productivity. …’

There is also the function of getting to know the right people, people who are already upper-class or who will become upper-class, and learning to imitate their manners and absorb their points of view and interests.

As for productivity, I don’t know of any material, scientific measurement of productivity produced by mainstream college education. I have seen the opposite in at least one important field. I have to doubt that increased productivity, other than of a self-referential kind, is to be expected.

145

Tom Legrady 10.25.12 at 6:33 pm

The real advantage of “mandarin schools” such as Harvard, Oxford, Ecole Polytechnique, Harvard, Yale, MIT, Stanford, McGill, etc, is that 10 and 20 years later, when you want to take to the VP of company X, the national Secretary of Whatever, you are talking to your former roommate or frat buddy or classmate.

And if you want to reach the top in research, studying with some top researcxher at MIT will gain you introductions you won’t get from a Lakehead University supervisor.

146

Ben CS 10.25.12 at 8:14 pm

Looking to the future, I would predict an explosion in online vocational training programs, as well as at the community college level. Technologists have big ambitions for online education, and I think policymakers like the idea of channeling investment to institutions that really focus on job training and employability. One hears so much about young college graduates, burdened with debt and unable to find worthwhile jobs. I think the value of the “Rolls Royce experience” is being reconsidered, and many students who might have loaded themselves up with debt ten years ago will opt for something cheaper. This isn’t to say elite institutions will suffer; on the contrary, a traditional, four-year liberal arts education will become even more of a luxury. Small classes and personal interaction will be a thing of the past except at top-tier institutions. Studying some obscure topic that interests you but has no bearing on your future career will become a real signifier of social class. Feeling the squeeze will be middling institutions which try to offer the same scope and amenities as the top tier, but find themselves unable to attract the best students and are too expensive for the thrifty ones.

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State of Thought 10.26.12 at 5:28 pm

Sebastian H says, “But it wasn’t always so expensive. In fact in the fairly recent past it wasn’t anywhere near as expensive. So what gives?”

John Holbo says, “I should probably have been more explicit about this in the post. The sort answer is: I don’t know.”

What do you mean by “wasn’t … as expensive”? If you mean in terms of tuition paid directly by students, sure. If you mean in terms of what the institutions are spending, what gives you the ideal that the typical institution is spending more despite having implemented (arguably abhorrent) cost saving measures such as cutting back on tenured faculty in favor of adjuncts?

It appears that the institutions have been spending roughly the same amount for decades (aside from slight increases for adding certain services). What’s changed? At public institutions — which is the vast majority — they’re getting reduced subsidy from state government. They had to make up for that somehow. Some have found ways to cut back (even if painful ways such as adjunctification, simplification by trimming to core programs, etc.). Where they haven’t managed to cut back (or haven’t been willing to sacrifice quality in order to cut costs), they’ve had to raise tuition.

In recent decades, the true, total cost of education has not significantly changed (i.e., not beyond standard inflation). The change has merely been that states have reduced how much they’re investing in their youth, and so a large portion of the total cost has shifted from the states to the students.

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engels 10.26.12 at 10:45 pm

Well, education has 2 functions. One is credentialing, the other is improving productivity.

Well, the wheel has two uses. One is automobiles, the other is shopping trolleys.

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Harold 10.26.12 at 10:57 pm

Well, education has 2 functions. One is credentialing, the other is improving productivity.

At this, signor Gaspare remarked: “If all the prince’s subjects were good, I think he would be only a petty lord, seeing that the good never number more than a few.”

Signor Ottaviano answered: “If some Circe were to turn all the subjects of the King of France into wild beasts, would you not consider that he would be only a petty lord, even ruling over so many thousands of creatures? And on the other hand, if all the flocks pastured on these mountains of ours were to turn into wise men and valorous knights, wouldn’t you consider that the herdsman in charge of them, and by whom they were obeyed, had become great lords? So you see that it is not the number of their subjects but their worth that makes princes [and principalities] great.” –Baldassare Castiglione, The Courtier (1561)

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