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October 28, 2011 3:09 PM The Tuition Problem Is that Serious

By Daniel Luzer

Tuition is actually increasing faster than the cost of health care.

According to an article by Ezra Klein at the Washington Post:

You’ve all heard about the high-octane rise in health care costs, right? Well, since 1978, college tuition and fees have been getting expensive at a much, much faster rate than even medical care.
So what gives? As far back as 1993, experts were observing that tuition was rising so fast because parents were willing to swallow the cost. More recently, a U.S. News & World Report story from 2009 argued that prices were ballooning at elite universities because they’re all in a bidding war for top faculty and better services for students. That competition for students has also forced schools to hand out bigger and bigger scholarships, raising the sticker price of education. Meanwhile, Ronald Ehrenberg, a labor economist at Cornell, has blamed “the shared system of governance between trustees, administrators, and faculty” at many private universities, which “guarantees that selective private institutions will be slow to react to cost pressures.”

Here’s the chart Klein reproduces from Matthew Philips demonstrating the problem at Freakonomics.

TuitionHealthCare

Yea, it’s one of those problems, like as serious and screwed up as health care, and perhaps for similar reasons.

Because in this country the government doesn’t fully subsidize higher education citizens experience an odd system where, like with health care, providers can charge too much for a whole variety of things that don’t really improve learning (in particular things like building projects). Like with health insurance, however, college tuition is disguised under an umbrella of “financial aid,” which combines grants and loans and obscures the real cost of tuition, and who has to pay it.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

Comments

  • MLR on January 16, 2013 2:28 PM:

    It's because education has been more heavily subsidized by the government over the last several decades. Education costs have risen partially because of inflation and partially because institutions can get more "free" money from students via government loans and other subsidy. It's not difficult to figure out.