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March 22, 2011 3:21 PM
College Pricing: One Big Red Line
Here’s what’s wrong with college pricing, one graph explains it all:
This disturbing chart comes from a recent presentation by Anya Kamenetz, author of DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education.
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BGinCHI on March 22, 2011 6:39 PM:
Sigh.
Come on folks. Don't do a story if you don't tell the story.
Let's take state universities. Why did tuition go up at such a rate? Why are people paying a lot more than they were before 1980?
Simple.
States have drastically cut spending on higher ed. And since voters haven't clamored to change this, it has meant that, whether they like it or not, less tax money goes to higher ed and more of their money, if they pursue a degree, goes to tuition.
It would be nice if you'd look at a few states, get the numbers, and show how this has come about.
Luthe on March 22, 2011 11:34 PM:
The thing about college tuition (and health care costs) is that they are industries that are labor intensive and can't have their productivity enhanced much by technology. The other industries up there have experienced productivity gains, keeping prices low, or have their prices kept artificially low by the government. Higher education is an ideal target to have its price kept artificially low, but that money goes to farm subsidies and the mortgage interest deductions instead.
Snarki, child of Loki on March 22, 2011 11:44 PM:
True about state universities, and yet...
there's a strong element of supply and demand at work, and the price will go up until demand cools off. When significant numbers of kids and parents say "college is too expensive, stick with a HS diploma", then we'll start to see tuition price level off. But as long as the dominant view is "you MUST have college degree to get a decent job!", then tuition will still be on an upward track.
In fact, I'd say that the only reason tuition hasn't gone up much faster is the "stickiness" of tuition pricing, and some (minimal!) competition.
Clearly, letting the price go up until a large number of students give up on college is not good for the US as a whole, but what to do? Price regulation? (ha!) Many more education options to increase competition? (maybe) Most student loans to inflate the credit bubble, while not addressing the underlying problems? (probably)
Douglas Ctockett on March 23, 2011 5:16 AM:
There are plenty of alternatives to the current university system. Webinars which are widely used by investors actually work. It just seems a matter of time for them to gain acceptance as viable inexpensive alternatives.
Ron Mexico on March 23, 2011 8:01 AM:
Obviously the first poster is the only one making sense. Some "state" institutions are only 10% funded by state budgets. My institution received almost 90% of its funding from the state in 1970, yet receives only about 40% of its state funding now; it makes up the rest through philanthropy, corporate sponsorship, selling ads, and yes, higher tuition. Mind you, the less state funding institutions receive, the more strings are attached to the funding.
But the graph does indicate why "alternatives" to 4-year institutions are springing up rapidly. But, of course, they are part of that cost curve as well. The main expenditure for college education is labor, and thus the main way to "save" money is to pay less for it by hiring unqualified people to teach courses, or squeezing tenure track and adjunct faculty to produce more widgets with higher class sizes and more courses (which have also happened at the same time as the cost curve has bent upwards). All these developments are related, even though Luzer likes to pretend otherwise.