Most agree that going to college is a positive step, and that gaining a college degree opens up more job opportunities with better pay, meaning that it is likely that graduates will enjoy a better lifestyle, plus various other benefits. However, the costs of spending four years at college are considerably more today than they were in years gone by. This essay argues that those costs are too high, and leave many graduates with a huge debt to pay off, reducing the amount of net salary received in the first years of post-graduate employment.
Odland (2012) describes college costs as “outrageous” and that they have increased at way above inflation for many years. He accepts that over an individual’s lifetime, education is very important. In terms of incomes, Odland notes that a person not graduating from High School earns – on average – almost $23,500 annually, which is much less than the average US salary of over $41,000. He also notes that over two-thirds of US prison inmates are individuals who failed to graduate from High School, implying that graduating from High School is a basic requirement to enjoy a “normal” life. In comparison, someone with a two-year degree (e.g. from a community college) can expect to earn around the US average salary, whilst those with a four-year graduate degree can expect $55,000. Continuing on to obtain a higher degree such as a Master’s can elevate that figure to circa $65,000 and above. So education and salaries are linked. Conversely, unemployment and low education level are similarly related.
But the rate of increase of the costs of college education has outstripped other costs. For example, states Odland, whereas typical family incomes have increased by 147 percent since 1982, college education costs over the same period have increased by almost 500 percent. He adds that although increases in grant aid and student loans have helped, loans must be repaid, “so the pain of payment is only delayed.” As to the cause of those escalating college costs, Odland quotes Goldwater Institute study findings which stated that “universities have in recent years vastly expanded their administrative bureaucracies, while in some cases actually shrinking the numbers of professors.” During a timeframe (1993 to 2007) in which student enrollments increased by 14.5 percent, the ratio of administrators to students rose by almost 40 percent, and the administration expenditure per student rose by two-thirds (Odland 2012).
Odland also states that further contributory factors to the escalating costs include the tenure given to faculty members – which means they virtually have jobs for life regardless of their productivity. Senior professors typically get more frequent sabbaticals than before. As an example he states that 20 of Harvard’s 48 history professors were on leave in 2011. High demand for places also affects costs, in that universities can increase costs “uninhibited by normal economic forces” (Odland 2012).
Sanchez (2014) blames reducing public financial support in the form of federal grants for universities, meaning that more money has to come from tuition fees. He states that in the last five years, college costs have increased by 77 percent in Arizona, 75 percent in Georgia, and 70 percent in Washington State. Describing those increases as unacceptable at a time of high unemployment and wage freezes, he adds that those costs represent a far greater share of family incomes than was formerly the case. He concedes that even so, families are somehow finding the money, mainly because they see the return on that investment as being worthwhile.
Long (2014) suggests that high administrative costs and excessively high salaries push up college fees. As an example of the latter, she cites the President of the University of Washington – Michael Young – whose annual salary is $570,000 (only the 19th highest paid president of an American public college), and who can look forward to an upcoming “deferred compensation payment” approaching $1 million. Long does note that Young is the CEO of an organization with 30,000 employees having a $6 billion annual budget. However, she also states that “hundreds” of the University of Washington employees receive over $250,000 per annum, although much of their compensation is sourced from federal research grants, etc.
Lucido (2014) makes what seems a valid point when he states that the costs of the research undertaken by professors (instead of time spent teaching) should not add to the costs of tuition fees. As Lucido suggests, research activities should be accounted separately by universities, with their own revenue stream and profit & loss account. Furthermore, he suggests that an in depth analysis of college costs is needed if we are to make college education cost-effective and affordable once again.
The issue of rising college tuition fees was debated in an interview with three economists, arranged by Belkin (2013) for the Wall Street Journal. Dr. Fichtenbaum (Wright State University, Fairborn, Ohio) blames the increasing armies of highly paid administrators, and the current trend of excessive compensation for university presidents. In addition he criticizes the inflated expenditure on luxury amenities and facilities and subsidies for athletics and other sports. Dr.Vedder (director of the Center for College Affordability and Productivity in Washington), mentions the tenures afforded to professors with “low teaching loads” so that they can “pursue trivial research.” Dr. Lyall (University of Wisconsin System president 1992-2004), blames the escalation of administrators on the expansion of IT within universities, but also suggests that costs can be reduced and efficiency increased by restructuring and merging the administrative departments of higher education establishments. However, she cautions that this would be a difficult task due to the extent that the bureaucrats jealously guard their domains.
A counter argument is offered by Dorfman (2013), who maintains that “most colleges are still underpriced.” The basis of his argument is that the best universities can accept only a small percentage of the numbers who apply, so that by implication they could and should charge even more, just like any other business, on the principle of pricing a product according to supply and demand. Furthermore he cites examples such as Harvard where the full annual cost is almost $60,000, but that after financial aid support the net cost to a student’s family is only $15,550. However, his argument does not really hold water. While $15,550 is certainly a great deal less than $60,000, even that lower figure can hardly be described as affordable for the great majority of ordinary families, yet Dorfman describes a figure of $20,000 as “generally quite affordable.” And let us not forget that if federal or state aid can reduce the fees by that amount, then the taxpayers (those same families) will be funding that subsidy, as well as repaying student loans.
The consensus of informed opinion is that today’s college costs are too high, having escalated in recent years at a far higher rate than inflation. The causes of that escalation are blamed on various factors, including the operation of the principle of supply and demand (more applicants than places), affording the universities the freedom to charge ever higher fees. Other suggested causes of the high fees are the increasing numbers of highly-paid administrative staff at universities, high-earning faculty members doing research instead of teaching, overpaid university presidents, unnecessary expenditures on luxury amenities / facilities and extensive support for intercollegiate sports, and more. Whilst a college degree can bring the recipient considerably higher earnings and success later in life, that is no justification for the costs of college to become so high, taking a college education out of the reach of many ordinary people.
Belkin, Douglas. (Oct. 2013). How to Get College Tuition Under Control.” The Wall Street Journal. Retrieved from: http://online.wsj.com/articles/SB10001424127887324549004579068992834736138
Dorfman, Jeffrey. (2013). “There's No College Tuition 'Bubble': College Education Is Underpriced.” Forbes. Retrieved from: http://www.forbes.com/sites/jeffreydorfman/2013/09/12/theres-no-college-tuition-bubble-college-education-is-underpriced/
Long, Katherine. (Jun. 2014). “High cost of college: the truth behind the myths.” The Seattle Times. Retrieved from: http://seattletimes.com/html/localnews/2023854233_higheredmythsxml.html
Lucido, Gary. (Feb. 2014). “The Real Cost Of A College Education – Why Is It So High?” Lucid Realty. Retrieved from: http://www.chicagonow.com/getting-real/2014/02/the-real-cost-of-a-college-education-why-so-high/
Odland, Steve. (Mar. 2012). “College Costs Out Of Control.” Forbes. Retrieved from: http://www.forbes.com/sites/steveodland/2012/03/24/college-costs-are-soaring/
Sanchez, Claudio. (Mar. 2014). “How The Cost Of College Went From Affordable To Sky-High.” NPR (National People’s Radio). Retrieved from: http://www.npr.org/2014/03/18/290868013/how-the-cost-of-college-went-from-affordable-to-sky-high