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Why is College so Expensive?

College costs have been rising for many reasons
Abhiram
Abhiram Kotireddy

July 14, 2020

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Over the years, higher education costs have been increasing at an exponential rate. With private institutions coming to around 60,000 to 70,000 dollars per year many highschool graduates ponder the question of whether college is worth it. Although there are assistance programs such as financial aid and scholarships this still usually is not enough for the average family and they find themselves paying off a mountain of student debt for many years. This begs the question why is college so expensive? Well, there are some reasons for the ballooning costs of college tuition.

 

The U.S spends more on college than almost any other country according to the 2018 Education at a Glance report by the OECD. Americans nearly spend twice as much as other developed countries. Andreas Schleicher. The director for education and skills at the OECD says “ Spending per student is exorbitant, and it has virtually no relationship to the value that students could possibly get in exchange.”

College tuition has almost doubled since the 1980s with the average debt per graduate who took out loans is about 30,000 dollars. Tuition rates have been increasing at a much faster pace than wages have over the years which has caused a student debt crisis in the United States. From the 1980s to 2018 the cost of an undergraduate degree has risen by 213% and 129% at private schools(adjusted for inflation). There is a clear disparity in the costs of higher education so it is important to understand why this has happened. 

Rising Demand

Students now more than ever are seeking college degrees. Georgetown University concluded that about 65 percent of all jobs require a postsecondary degree. As more jobs require a diploma to get, many students see college as their only option which is why the demand and hence the price keeps rising every year. Currently, students are more educated on average than any previous generation. Universities can freely raise the price of tuition because of the demand for it. Also, the department of education expected 20.4 million students in the fall of 2017 about 5 million more students more than in fall 2000. More students than ever feel as if a college degree is the only way that only is contributing to the rising costs of tuition. 

 

Despite colleges rising costs, the pressure to go to college is continually increasing. This creates greater competition, both among students seeking access and colleges seeking applicants. Additionally, universities have slowly started to behave more like businesses, competing for student retention rather than just focusing on the quality of education. 

Financial Aid

There are ideas that suggest financial aid has contributed to the rise in tuition. Although financial aid is great for helping low-income students attend school and escape poverty some theorize that this also allows universities to capitalize on other students.  In the 70s and 80s financial aid programs were almost non-existent but they have grown exponentially since the passing of the Middle Income Student Assistance Act. Some think that universities have been raising tuition costs to capture lost revenue from financial aid. However, this idea is to be taken with a grain of salt as it has not been directly proven but is rather a proposition. Financial aid has been providing the lowest income students new opportunities that have benefited higher education on every accord. 

State Funding

The American Council on Education has attributed the increasing cost of college to many state governments cutting funding for higher education. This forces colleges to replace the lost revenue with tuition costs that negatively affect the general population. When state support is level tuition is flat but when state support decreases tuition rises hurting the average American family. Roughly 80% of America’s college students attend public universities which means increasing state funding will help the majority of students get more affordable higher education. Enrollment has risen dramatically but state funding has not been able to keep up which has forced the university to increase tuition to keep up with costs.

Today’s educational infrastructure is exponentially larger, more expensive, and more bloated. In the absence of state funding, universities have shifted their strategies. Higher education has grown into an increasingly competitive business sector, one in which effective marketing, top professors, competitive amenities, and other features are important differentiators. Rather than trying to educate the area around the university, it has become a competition to see who can bring in the most competitive students from around the U.S and abroad. This has caused tuition to spike because of the new shift in priorities for universities. As states cut education funding, there will be an increased movement towards richer and foreign students who can pay more to the university. 

Business Insider also stated that during the 2015-2016 school year, public appropriations from government sources were 11% lower per student that a decards prior. The state government is continually defending higher education which makes it impossible for colleges to stay competitive in the market unless they raise the prices for all students. Without proper state funding colleges will just continue to get more expensive. 

Professors and other Services

Colleges have to spend a lot on staff and compensation. Professors are usually highly educated individuals and that process of recruiting such individuals is an expensive process. Although total faculty spending has decreased and part-time professors have increased over the years, this allows universities to attract tenured faculty with higher wages which have no impact on tuition or increase tuition. Providing higher wages to fewer members can cause tuition rates to rise as there needs to be an incentive for them to stay and teach. 

Other services such as academic advising, counseling, and healthcare have been on the rise. Although these benefits are essential on a college campus, this can attribute to the rising tuition costs. Around two-thirds of the budget does not go towards teaching but rather other non-teaching personnel with many administrators making high salaries. This has caused an increase in the tuition that students would have to pay. 

According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which was 10 times the rate of growth of tenured faculty positions. The New York Times uses the California State University System as a case example, noting that between 1975 and 2008 the number of faculty grew from 11,614 to 12,019. However, the total number of administrators grew from 3,800 to 12,183. Tuition cost rises can also be attributed to increasing administrators on campus. With sharp increases in personnel on campus, there is a directly proportional effect on tuition costs as well. The university has to pay all of these new people's salaries which have caused tuition spikes in recent years.  

Takeaway

There are many reasons why college costs have been rising over the years. The most important idea to consider is whether college is right for you. Depending on your dream job or future plans the cost of college can be worth it. It is up to you to determine whether you need the opportunities college provides. 


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