Why College Costs So Much

I’ve been harping on this topic for many a moon. Now, Diane Rehm (The Diane Rehm Show) and Neal Conan (Talk of the Nation) are both hosting shows on precisely this topic and exactly the same day.

Unfortunately, Diane Rehm’s show was somewhat a waste of time. Her guests did little to list the real reasons why college costs have increased. Their discussion devolved into who is to blame for the problems in education, and who is to blame for fixing problems.

Maybe Neal’s show will be an improvement. I am leaning towards “no.” His guests do not leave me with much hope. I’ve read their published musings on higher education. Their thoughts are incomplete, at best, and do not adequately describe the calculus of college costs.

And, from listening to the opening comments of economist Richard Vedder, I am not going to be disappointed in anticipating that I will be disappointed.

So, if you have the time, here are a few reasons why college costs are going up.

Like everywhere else, health care costs for university employees has gone up. Health care cost can consume a significant portion of a university budget. What is significant? Anywhere from 12% to 30% of a university budget can be consumed by health care costs. Having worked on my university’s health and benefits committee, we worked diligently to educate all employees to make good health care choices. That means using generic drugs, seeing your doctor when you get sick instead of the emergency room.

Many universities are centered around old buildings, buildings with asbestos, not prepared for networking, or the electrical demand, or plumbing. Some states have statutes preventing the razing of old public buildings. Retrofitting an old building for technology and to power technology can cost as much as a new building. However, there is an inefficiency in this process, no doubt. Many of the buildings on my campus need new windows. I cannot imagine how much energy is wasted on campus due to poor maintenance. I was informed $2million dollars was the quoted price for replacing windows on one 3-story building.

Every state has suffered serious financial setbacks. These financial setbacks are passed along to universities. Where a university needs $100 million to meet current needs, the state provides only $80 million. The only other source of income is tuition. Thus, if state funding is cut 20% universities are forced to raise the burden on students by some percentage. Usually, tuition does not increase proportional to the decrease in funding. If funding drops 20%, tuition may increase 5%-9%. A university typically does not get to raise tuition without approval by the state government, by the way. Or, there are limits on how much tuition can be increased without permission.

Thus, to compensate for the deficit, universities implement cost-cutting measures. My university migrated to Google Gmail in order to eliminate the cost of maintaining email in-house. Many computer labs have migrated to thin terminals which attach to campus servers, eliminating costs associated with updating desktops.

Libraries are expensive. Simply warehousing physical textbooks is one function of the library. Providing access to academic journals is another function. Academic journals require expensive subscriptions or licenses to databases. Many publishers continue to charge the same price for digital content as for hardcopy content; there is no discount for digital content. A single journal subscription can run $1,000-$5,000 per year, or more, regardless of media type.

Regional universities represent a great value for an education. I disagree vehemently with Trachtenberg; I do not think higher education should be available to only those most able to pay for the education. College education should be accessible to anyone who wants to further their education. Making education accessible to only those best able to afford education risk making education elitist, and only accessible to a limited demographic, and further risks segregating populations. Education should be about making everyone better, not merely a select few.

Each state has a flag-ship institution, like the University of Missouri, the University of Kentucky, or The Ohio State University. Yet, each state has a number of really good regional universities. Each state has a network of community colleges, as well, that provide good value. Each of these systems falls victim to decreases in state funding, though. Again, everyone pays a greater price in down economic times.

As I have written about earlier, students are their own worst enemy, or can be, when college costs are encumbered. Coming out of high school, students are unprepared for college. On their own, they have little experience with managing finances. Couple their financial issues with a lack of academic direction. As I recounted in another article, I went through a number of majors before settling on geography. I spent more time and more money than I needed to earn my degree.

As more students leave high school lacking study skills, lacking fundamental knowledge and skills for college, more time is required to earn a degree. Colleges have to waste time re-teaching math, reading comprehension, and writing skills simply to bring students to level where they can begin the actual work the student originally enrolled to learn. Time needed to make up for changes in major, minor, or areas, and the extra time costs money.

Students with academic direction may still be making a bad choice. If a student decides to study a field already full of people and take out student loans to pay for a career in a saturated field, that student made a bad choice. If a student takes out tens of thousands of dollars for a degree tied to low-paying occupations, again, that is a bad choice. Social work is a popular degree program. Entry-level salary hovered around $20,000 per year. Yet, I had acquaintances with $50,000 of student loan debt, and complaining about how little money remained after paying bills. Duh!

Student loan corporations could simply refuse to fund loans for some degree programs. If Republicans want more “free market” exposure across the economy, then one idea might be to let the student loan lenders decide how much a student is funded. Perhaps not “who,” but funding by major and geography. Perhaps for esoteric fields, funding would be competitive. Not everyone needs a degree in 17th Century German Literature. The fictional Southeast Student Loan Corporation might allow 50 students to apply for a student loan with a declared major of 17th Century German Literature and fund 5. Just a thought. Conversely, a student loan lender who freely gives money away to anyone pursuing a degree in Roman Architecture should expect to lose money. I would also state perhaps a lender should not deny a person a student loan simply based on their degree program. Perhaps loans are based on a graduate scale of interest rates, with esoteric fields paying 0.25-1.0 points above the nominal interest rate. Again, these a just ideas.

More career counseling is needed for every college student. In fact, I recommend every Introduction to Biology/Chemistry/Social Work/etc., needs to cover the details of occupations, salary, work, and education demands.

Policy-makers for Secondary Education are failing miserably. How can a student who does no homework, who does not understand homework is part of college, who does not understand homework is part of education, be prepared for college coursework in which all work is performed outside of class, i.e. all work is homework? Policy-makers who advocate for 4-day school weeks should be fired. Policy-makers who advocate “no homework” should be fired. Policy-makers who send children to adult courts and advocate prison for kids should be fired. Policy-makers who do not fight for education funding should be fired. They are not helping.

Policy-makers should be screaming about cuts, about the idiocy behind standardized tests (“Are there standard kids?”), screaming about the lack of support from parents, screaming about the lack of business and industry involvement, screaming about the lack of focus on vocational schools, screaming about the lack of skills, knowledge, and interest assessments for kids, and screaming about education, in general.

Parents, students, colleges and universities, and business should be mad as hell at the incompetence rampant within Secondary Education.

Part of the blame needs to be visited upon parents. Parents who do not support their children. Parents who are alcoholic and drug abusers. Parents as prostitutes. Fathers and mothers and brothers and sisters who rob, sell drugs, and generally show little respect for themselves or others. Parents who push school off to the side in favor of sports or video games, or who would rather be a friend than parent.

Americans need to wake the hell up. Yes, colleges cost money. If time and money are used wisely, a college education is the best investment a person can ever make in their lifetimes. Public colleges need more subsidies, not less. More federal government spending, not less. Publishers need to bring costs of production for textbooks down to reasonable levels. Publishers need to create more digital content. Students need to wake up and research their potential occupation. Parents need to wake up and first, discipline their children, ensure they respect their teachers; then, challenge their local schools to better prepare their kids. Stop the Creationism nonsense, stop the Climate Change denying nonsense. School district administrators need to tell state and federal agencies to go get stuffed when asked, “How well did you do on the standardized tests?”

Politicians and bureaucrats need to listen to those people at work in the field, and rather than attempt to impose their own brand of hubris, actually listen. Congresspeople need to spend a month in their schools, observe, listen, and ask questions. “What is going on? What good do you see? What policies are working? What is not working? How can we make things better? What suggestions do you have?”

Stupid or ignorant citizens weaken society, weaken our ability to govern ourselves, weaken our ability to earn decent wages, weaken our ability to innovate, and increase the disparity between the Have’s and the Have-nots.

I really wish the media would do a better job of discussing American education. I become really frustrated when economists from Ivory Tower U. speak in broad generalizations steeped in esoteric examples and simply do not represent the breadth and depth of the problem.

As I amend this post (12/11/2013) to Freshman Senators, Chris Murphy (D-CT) and Brian Schatz (D-HI) are proposing new legislation to penalize colleges and universities who don’t meet certain, as-yet-to-be-determined, criteria. The problem with their approach is they want to punish end-stage educational institutions. The problems they seek to fix began 9 years prior, as middle schoolers were transitioning to high school, and high schools

For more reading, I recommend this series of New York Times articles.

3 thoughts on “Why College Costs So Much

  1. I need your help. You mentioned that students need more career counseling and that’s what I’m passionate about right now. I’m super interested in several different fields of study, so as one could imagine, picking a major/minor was extremely hard. I am one of one’s students who will exit my undergraduate university owing upwards of $50,000. Howeverm unlike most of my peers, I have done my research as to ways I can afford to pay off my loans,etc. I am currently working on a personal project that might benefit students across my campus as well as other universities, but I need feedback. My question to you is, if students were required to complete a detailed career portfolio from the time the entered college until they graduate, what would you believe students need to have in it?


    • Ashanti, I’ll be straight upfront with you on your question. You ask excellent question and I have no answer for you. The thesis of your question is very important, though. Here is why.

      Colleges and universities network with business in as much as an individual faculty person will encourage and direct the communication. Said another way, businesses and colleges and universities have shitty communication.

      Yes, at times press releases are made available highlighting some fabulous new relationship between public schools and private corporations. Universities and colleges struggle constantly to find the balance between teaching students “tools” and providing the requisite philosophical substance behind “what is a tool?”

      I frequently ask my former students to stay in touch, to provide feedback on necessary job skills. Silence is generally the response. Faculty then search “want ads” and job boards, accumulating tidbits of info as to skills employers desire.

      To nail down a skill set, I would use current job listings found on “USA Jobs.” Make a list of every “required” skill. Then, make a list of “preferred skills” or verbiage stating, “the ideal candidate has the following…” Keep a running talley to note the frequency of skills. You should be able to identify the top 5 skills.

      Make a list of your Top 5 choices for employment. Research their employment opportunities. Look for someone who is doing the job you want. Email them, ask them if they would be willing to answer a few questions about their work. Out of 5 emails, you should get 1 or 2 replies. Ask them what the top 3 skills a new employee should have. Google, for example, does not care what fraternity or sorority a student belongs to. Google cares about creativity and intellect and whether or not a person can really think.

      See, you got me started 🙂


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