Why IS College so expensive?

[uscitizen]

If colleges were cheap the riffraf would go there too.
Who would be left to go into the military and serve you burgers and tacos?

 

[iamwhatiseem]

There are a number of reasons...

You have to pay for all of the unnecessary classes, which are at least 70% of what you take.
Colleges waste gargantuan money everyday as only the government's payroll is more bloated with overstaffed employees than high education.
You have to pay for VERY good benefits, early retirement ages and long vacation allowances for tenured staff.
Tenured staff often use staff and resources to write books, organize and produce seminars and required "retreats" for students.

I could go on all day.

 

[Toro]

Its simple. Supply and demand.

Over the past 40 years, the more educated you are, the more your income has grown. The less educated you are, the less your income has grown. Over the past two generations, the real income growth for someone with a college degree has been ~2.5%. For a graduate degree, it has been over 3%. However, if all you have is high school, income growth has been ~1%. And if you dropped out of school, your real wage has been stagnant. If you are a white male without a high school education, your real income has fallen over the past 40 years.

There have been several studies over the past few years which have looked at the reason for rising wage inequality. The conclusions have been fairly consistent. It hasn't been because of globalization or free trade or anything like that. It has been because those who have been able to adapt and exploit technological change have seen their incomes rise the most and those who cannot have seen their incomes rise the least. And the ability to adapt to technological change is a function of technology. It is difficult to design an analog semiconductor and create a biotech compound with a high school degree.

Because education has become more important, more people are going to a post-secondary institution. And because intellectual capital has become more important, there is more demand to go to the best schools. Going to Harvard or Stanford has never been more profitable for graduates, so they are willing to pay more. This has led to an increase for the best academics, which has driven up salaries at the best schools. It has also driven up salaries at secondary and tertiary schools as the increased demand for professors at the best schools as well as increased demand from students for post-secondary education have increased the value of lecturers throughout the system. Increased wages get passed along to students.

The demand for higher education is fairly inelastic. What that means is that raising the price of education has only a small affect on the demand for education. Thus, how education is funded, whether it is self-financed or through third-parties, doesn't have a great affect.

Interestingly, a recent study concluded that for most people, going to law school is a bad economic choice. It is a good decision for those graduating in the top 10%-20% of their class, but it isn't in aggregate for everyone else. In other words, there are too many lawyers.

 

[boedicca]

It is about supply: Easy Money Supply.

 

[Dr.Traveler]

If you all think you can stand a response that's a bit more thoughtful and less agenda-driven - military spread? Really? - this is what I found when I did some cursory research.

1) Half to two-thirds of the typical colleges budget goes to paying instructional salaries. So rising paychecks are indeed a factor in higher college costs.

The median salary for a full-time college educator is $46,300, according to the Bureau of Labor Statistics. The picture is brighter for those who have tenure: Full professors make an average $76,200, according to the American Association of University Professors.

Keep in mind, a Full professor making more than the median figure is probably funding a decent amount of his paycheck with grant money. That means that tuition money isn't going towards the higher end paychecks.

Grant money or not, half to two-thirds of a typical college's budget is still going to instructional salaries.

That I won't debate. I know the last 2.5 years of budget cuts saw our University trim operation costs right down to the bone in order to avoid laying off teaching positions. We cut administrative jobs, upkeep, lab upkeep, etc. We closed buildings in the summer that weren't in use (which did a lot of damage to the environmental controls), instituted mandatory unpaid overloads, etc.

Net result: The college budget is now well past 70% salaries.

I'm just pointing out: Before folks try to make the argument that student tuition money is going to pay high end salaries, they should actually check to see if that is true. I know that at many insitutions there isn't an ice cube's chance in hell that you're getting a high end salary without bringing in a boat load of grant money to offset that. This is often part of the grant proposal as the professor will want to "buy out" his teaching time in order to focus on the research being funded.

 

[Dr.Traveler]

Because they know that these days it's almost necessary to have a college degree (not everybody is an entrepreneur, in case someone wanted to respond with that), so it's easy to raise tuition knowing that students will still pay it.

That's like saying housing prices went up because people needed homes and paid more.

The truth of the matter is that we've had a higher education "bubble" fueled by government backed easy credit. The cost of education has risen far higher than what is justified by demand and inflation.

The Elite declared that everyone Had The Right To A College Education, regardless of merit or suitability of career objectives (much like government declared everyone had a Right To Own A Home - that worked out real well).

Colleges colluded in this mess by staffing up with financial aid counselors who advised clueless liberal art students to take on tens if not hundreds of thousands of dollars of debt, which conveniently could not be discharged via bankruptcy proceedings - for degrees with little economic value.

It was a big con that is now exploding.

The End.

I may disagree with the finer points, but I think we agree that too many kids are being advised to go to college.

You can still have a nice life without a college degree, and college just isn't for everyone. It requires a certain level of focus and preparation that some people just aren't interested in or capable of following through with.

I want to see a college degree be available to anyone willing to put in the work, but I'm finding some kids are going to college so they can "hit the snooze button" on post high school life. That's a formula for disaster and a waste of their time and money.

 

[Procrustes Stretched]

Why do you hate the free market? Colleges only charge what people will pay.

 

[johnrocks]

Why do you hate the free market? Colleges only charge what people will pay.

When did guaranteed student loans equate to free markets?

 

[Si modo]

There are a number of reasons...

You have to pay for all of the unnecessary classes, which are at least 70% of what you take.
Colleges waste gargantuan money everyday as only the government's payroll is more bloated with overstaffed employees than high education.
You have to pay for VERY good benefits, early retirement ages and long vacation allowances for tenured staff.
Tenured staff often use staff and resources to write books, organize and produce seminars and required "retreats" for students.

I could go on all day.

Overstaffed? Not quite. And, they are underpayed. If the book is a university pub or the seminar is university sponsored, then of course university staff is used. WTF?

Wrong.

It's simple supply and demand.

 

[Procrustes Stretched]

Why do you hate the free market? Colleges only charge what people will pay.

When did guaranteed student loans equate to free markets?

Student loans? Colleges are subsidized in many ways -- as are most industries all over the world.

Try not to hold education to a different standard and you might be able to make a case.

The price colleges charge is not set by student loans. Cart B- horse

 

[psikeyhackr]

[youtube]AIcfMMVcYZg[/youtube]

This video lays it out very well.

Yeah, I think that accounts for most of it.

psik

 

[johnrocks]

Why do you hate the free market? Colleges only charge what people will pay.

When did guaranteed student loans equate to free markets?

Student loans? Colleges are subsidized in many ways -- as are most industries all over the world.

Try not to hold education to a different standard and you might be able to make a case.

The price colleges charge is not set by student loans. Cart B- horse

Your right, most things are subsidized, that is a reason why prices are high on things from food to health care to education and thus not "free market" as you stated.

 

[Big Black Dog]

It costs just as much to go around being dumb as it does to pay for a college education.

 

[Procrustes Stretched]

When did guaranteed student loans equate to free markets?

Student loans? Colleges are subsidized in many ways -- as are most industries all over the world.

Try not to hold education to a different standard and you might be able to make a case.

The price colleges charge is not set by student loans. Cart B- horse

Your right, most things are subsidized, that is a reason why prices are high on things from food to health care to education and thus not "free market" as you stated.

yep.

now there are more than one meanings for 'free market'

there is one meaning used by pseudo-intellects that confuse a rigid textual interpretation vs people like Adam Smith who used an interpretation that included regulation.

 

[johnrocks]

Student loans? Colleges are subsidized in many ways -- as are most industries all over the world.

Try not to hold education to a different standard and you might be able to make a case.

The price colleges charge is not set by student loans. Cart B- horse

Your right, most things are subsidized, that is a reason why prices are high on things from food to health care to education and thus not "free market" as you stated.

yep.

now there are more than one meanings for 'free market'

there is one meaning used by pseudo-intellects that confuse a rigid textual interpretation vs people like Adam Smith who used an interpretation that included regulation.

One is free market and one is State Capitalism. I honestly don't have a problem with regulations that do things to benefit us like having minimal safety standards, what I don't care for is regulations/laws that try to plan our economy, it just doesn't work that well and it harms the very people it was intended to help, corporations are helped not the common man or woman with so much intervention,imho.

 

[uscitizen]

Why do you hate the free market? Colleges only charge what people will pay.

When did guaranteed student loans equate to free markets?

Student loans are free market as well. You can choose not to get them.

 

[johnrocks]

Why do you hate the free market? Colleges only charge what people will pay.

When did guaranteed student loans equate to free markets?

Student loans are free market as well. You can choose not to get them.

Just because something is choice does not make it "free market", government backed loans(what I'm referring to as opposed to just a regular loan that Dad takes out to send his kid to school) are not what I'd call free market but of course we each have our own definitions I suppose.

 

[Annie]

Seems to me that the adage that 'the only path to success is a college degree' has been over used, especially when paired with paying for it on loans by private lenders with guarantees from the government. Universities get kickbacks for referring students to specific lenders, the slush of loan money allows them to keep raising tuition.

Another factor too, which has been alluded to earlier, the suites and menus now at your typical university. No more roomies, no weird foods. Check out the 'health clubs' on most campuses, they are often better than the club you pay $130 a month for.

The faculty listed is not necessarily the profs in the classes, they have associates teaching and grading. The profs are working at being published, not teaching.

Logically grads are realizing that their 'investment' isn't panning out and the higher education is on the path towards bursting.

 

[Dr.Traveler]

The faculty listed is not necessarily the profs in the classes, they have associates teaching and grading. The profs are working at being published, not teaching.

That isn't true at the smaller State Universities and at the Private schools. If you want to have an actual Ph'D at the front of your classroom, you need to go there.

Now, at an R1 instituion like Duke, or Purdue, or UW Madison, etc, you're likely to get a grad student teaching you while the Professors have reduced loads for research. Take it from me though, you may not want a Research professor in front of a class of freshmen. That usually doesn't work out well.

All institutions are different in the balance they seek from their faculty. Where I'm at its about 75% teaching, with the remaining 25% divided between research and committee work. I have friends at schools that are closer to 50% teaching, and collaborators at schools that are more 75% research.

Students need to make an educated decision about what they want from their professors, and find a school that fits that. The fact students don't do that, and base their decisions on schools on things like percentage of the opposite sex in the population, exsistence of Greek Life, Athletic programs, etc, is part of the problem.

 

[psikeyhackr]

It costs just as much to go around being dumb as it does to pay for a college education.

Who says going to colege is the only way to not be dumb?

Good sci-fi books from the 50s and 60s contained information and ideas that most people don't encounter until college. If we selected the RIGHT BOOKS for grade school kids to read they would be more knowledgeable than most college graduates by the time they were out of high school.

I wish someone had given me a book like this when I was in 7th grade.

Teach Yourself Electricity and Electronics by Stan Gibilisco
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Stan Gibilisco eBooks

The RIGHT BOOKS makes all the difference.

psik