In response to my request for uncomfortable questions, Lou asks:
As a private college professor and a new parent, I’m sure you are aware that the current rates of tuition growth are unsustainable indefinitely. When do you expect to see the rates drop back to inflation levels, rather than continuing to grow 3-4% above it?
The short answer is “The minute that students and parents start going elsewhere.” The setting of tuition rates is a Black Art, but the essential calculation is striking a balance between “What do we need to improve our operation?” and “What will the market bear?” If people stop putting up with big tuition increases, and application numbers drop, then tuition rates will stop increasing quite so rapidly.
The long answer…
… well, it’s complicated. The question is really what’s driving tuition rates to increase faster than inflation. Contrary to the impression you get from some critics of academia, the tuition money is not going to pay for extravagant gay weddings of liberal professors to help them corrupt the morals of America’s youth. Running a college or university is an expensive business, and most of the money that comes in from tuition is spent on operating costs: faculty and staff salaries, benefits, research and residential infrastructure, etc. Those things get more expensive every year.
Something that would help slow the rate of tuition increase is a sensible solution to the rising costs of health care. Health insurance is a huge chunk of the operating costs, because a college needs to not only provide reasonable coverage for their faculty and staff, but they also need to have some insurance to cover the things that can happen when you pack large numbers of 18-22 year olds together. The idiotic and baroque insurance system in this country puts a big burden on all businesses, and also on colleges and universities.
Similarly, a better energy policy would do wonders to hold costs down. Colleges and universities need to provide research and residential space for a large number of faculty and students, which means heat, light, running water, Internet connectivity, and so on. When energy prices spike upwards sharply, the money to pay for those things has to come from somewhere.
Of course, the high-profile and vaguely problematic driver of tuition is a sort of “arms race” between different schools in terms of the amenities they offer. Institutions compete not only on faculty quality, but also on what they offer to students outside the classroom. You can’t attract good students without having good living space, good exercise facilities, good food service, and the rest. There are also costs associated with supporting students both inside and outside the classroom– career offices, counseling centers, academic support services. It costs a lot of money to maintain a standard that students and parents will find acceptable, and get students to come in. That stuff’s not free.
You’ll find a lot of people (many of them faculty) who complain about those expenditures, as if it’s somehow unseemly for an educational institution to offer eating options beyond gruel and hardtack in an unheated barn of a dining hall. Surprisingly few of those complaints come in the form of parents and students opting for austerity, though. You’re far more likely to find students and parents demanding more stuff than complaining about how much money is wasted on non-classroom facilities, and to this point, they’ve been willing to pay for what they want, in the form of increased tuition.
Is the recent historical rate of increase unsustainable? In the long term, absolutely. The uncomfortable fact, though, is that the unsustainable rate of increase has proven to be sustainable for a lot longer than anyone would’ve thought. We’re probably nearing the breaking point, but then, people have been saying that for a decade at least, and there hasn’t been any change.
From the parental side, I honestly haven’t worried about it that much. SteelyKid’s college years are so far in the future that it’s really impossible to predict what the educational landscape will look like. We’ll set money aside for her college, and when the time comes, we’ll find some way to make things work. What that will be, I have no way of knowing, but we’ll come up with something.