RSS Feed Menuis the subject of my latest column in The Week:
In their own ways, universities indulge in some of the worst faults of the corporate sector, overcharging their customers in order to allow managers and staff to engage in wasteful or destructive activities that could never be justified on their own.
balconesfault // May 28, 2009 at 9:30 am
My dad was a military retiree/HS teacher who only had to pay about 2-3K/year to send me to Princeton back in the late 70’s (with aid and loans picking up the other 7-10K). But between then and now, as someone who does interviews for PU, I can tell you that the applicant pool has exploded in size and quality. I see kids rejected today who I consider more qualified than I was back in the day.Now, factor in the Bush Tax Cuts and their effect on top wage-earning families in the last decade. A 5% effective tax cut meant a dual-6-figure-income household with only one or two kids (as most are) suddenly had an extra 10-15K/year, at least. And they wanted their kids to go to private universities. And because college costs are short term, they were comfortable spending up to $20K/year more thanks to their extra money in pocket.The universities just responded to what the market was giving them – hell, I’ll bet that the top universities – Princeton, Harvard, Yale, Stanford, MIT (forgive me for any I left out
– could probably have bumped another $20K and still had a full applicant pool. Consider it trickle down economics at work … except that money doesn’t always trickle down to the things (eg – investment in new domestic manufacturing base) that would be best for our economy, long term.
dacookson // May 28, 2009 at 1:29 pm
Interesting article but not much in the way of solutions. What do you do? The market has dictated the current state of affairs, are you suggestion regulation or making them public bodies? Could you make a degree a measurement of hours of tuition so that other institutions could run degree equivalents in less time? Let people sit university exams without having to attend or pay for courses so they could self-teach? That might drive down prices but I’m not sure where the motivation for change is under the current conditions. Presumably endowments recover with the market and as you’ve said there seem to be plenty of students willing to pay judging by the number of graduates.
thenextguy // May 28, 2009 at 2:16 pm
Thank you! I agree this issue doesn’t get nearly the attention it deserves.
joemarier // May 28, 2009 at 3:07 pm
I have a solution! Make student loan debt bankruptable. That’ll bring down prices REAL quick.
Mike K // May 28, 2009 at 8:38 pm
“A 5% effective tax cut meant a dual-6-figure-income household with only one or two kids (as most are) suddenly had an extra 10-15K/year, at least. And they wanted their kids to go to private universities. And because college costs are short term, they were comfortable spending up to $20K/year more thanks to their extra money in pocket.”Interesting concept for a blog that is alleged to be about Republicans. Better to take that money and use for…I attended college and medical school in the decade 1956 to 66. It was a private university but I could earn enough working summers and after school to pay the tuition myself. That suggests the degree of inflation that has occurred. Student loans were almost impossible to find until 1960. I think that is a factor.Right now, I have my last child attending a state university with non-resident tuition. She is electing to spend her second year at a junior college. I am content with this as I have seen the curriculum at the state U. It is appalling. Junior college is more practical and I doubt the left wing ideology is as common in junior college because students are working to get an education, mostly on their own dime.I see parents rebelling at the tuition rates for what are second tier or less colleges. Another child of mine went to JC for two years, then graduated with honors from UCLA. Economically, it made more sense.For weaker majors, it makes little sense to spend a lot of money on colleges since the degree is a generic one. None of my kids applied to Harvard and I might have been willing to pay the price if one had but there are about 20 degrees worth the cost. The rest are just a generic degree.
balconesfault // May 28, 2009 at 8:58 pm
“Interesting concept for a blog that is alleged to be about Republicans. Better to take that money and use for…”That’s not the discussion. The point here was about simple economics – college prices are as high as they are because people had more money in pocket to spend on college. Tax cuts on the upper brackets who are sending their kids to private universities without financial aid are a big part of that extra money. Loans may well pay a part also.Personally, my son is in an honors program at a state university, and I’m very happy with it. Excellent value. Then again, it is taxpayer subsidized.Junior colleges are also taxpayer subsidized, usually at a higher rate than most state universities.I guess that publicly funded institutions are forms of socialism, aren’t they? I applaud you for not being so doctrinaire as to deny your children the benefits of state subsidized education.
mlindroo // May 29, 2009 at 3:51 am
> Tuition, room, and board at private colleges can cost> $50,000 per year or more.Yikes! In comparison, my annual tuition fee (excluding living expenses (food, rent etc.)) in Finland was about $100. The salaries of the university staff, cost of facilities etc. were paid for by the state.—Naturally, this system has its own advantages and disadvantages vs. the American system. But the astronomical cost of a university degree is probably one of the main reasons why there is less social mobility in the United States than in Scandinavia, Germany or even the U.K.. MARCU$
Claude // May 29, 2009 at 8:08 pm
A few years ago, there was an obituary in Emory’s alumni magazine for an alumnus who had recently died after a long life that included a successful career in business. He was well known to Emory’s administrators because he had contributed money every year for as far back as the school still had records.Why was he so generous? He began attending Emory in the late 1920’s when the economy was very good, but of course it didn’t stay good. He told a dean that he would have to drop out because he couldn’t make the next tuition payment. The dean told him, “Don’t worry about the tuition now. I’m sure we’ll get it from you later.” And of course Emory did get their tuition and a whole lot more.
lfostvedt // May 31, 2009 at 11:10 am
Dear Sir,I believe you have left out a very important issue from your column, the discrepancy between a high school diploma and college diploma. Without this investment in a college education, employment options are much more limited and promotion opportunities become far more difficult to earn. Although there is little argument that private colleges are overpriced and the average salary of graduates is decreasing, your real investment is in the increase in opportunities that a college degree affords you.