What has been going on with tuition?

[Jon Miller]

I was looking at the (private) universities that I had considered attending.

The one I attended had tuition go from about 15k per year to over 37k for this next year. One I had considered had tuition go from about 12k (I think, I don't remember as well since I didn't attend) to over 18k for this next year.

http://www.csmonitor.com/USA/Education/2012/0606/Student-debt-What-s-been-driving-college-costs-so-high-anyway

"Between 1999 and 2009, tuition at public four-year colleges rose 73 percent on average, and tuition at private nonprofit colleges jumped 34 percent. In the same period, median family income fell by about 7 percent."

It appears that the college I attended rose a faster than expected, but still... how do people afford it now? And what has really caused it? I know the pay for professors hasn't increased so much, and nonprofit colleges don't have high research costs (and it doesn't seem to me that the cost of research has increased a lot either).

JM
(I didn't consider going there, but for HC: http://my.cmu.edu/portal/site/admission/costs2/ CMU would cost 45k in tuition.)

[giblets]

If you complain about college costs you're only trying to help rich people at the expense of the poor /sarcasm

[Lorizael]

They must have seen me coming.

[Uncle Sparky]

I read recently that rents in my home city went up, on average, over 70% between 2001 and 2011. I know that retail local bread has gone up over 100% in the last 2-3 years. So, could one of our economists please explain why inflation is around 1.3% in Canada and 1.7% in the US?

I thought inflation had to do with prices and purchasing power. I know I'm not making 70% more than I was 10 years ago.

[giblets]

Because the basket Canada uses for its CPI doesn't consist of "rent and retail local bread in Winnipeg, Saskatchewan".

[Uncle Sparky]

Because the basket Canada uses for its CPI doesn't consist of "rent and retail local bread in Winnipeg, Saskatchewan".

Saskatchewan!!!!... I really don't have time for a fight right now, but how dare you!!!

[regexcellent]

lol wow

Saskatchewan has nothing in it but wheat, corn, and cows. I mean it has Regina and Saskatoon but do those really count as cities? Maybe in Canada they do.

[giblets]

Saskatchewan!!!!... I really don't have time for a fight right now, but how dare you!!!

What are you so angry about? Fine, I'll never bring up the province-that-must-not-be-named again.

[DinoDoc]

I found this to be food for thought at least when thinking about this topic:

Stop subsidizing soaring college costs

The cost of college tuition will continue to rise as long as federal student aid programs continue to increase with little or no accountability.

That was the hypothesis (now known in education circles as the Bennett Hypothesis) of a column I wrote for The New York Times in 1987, in response to tuition hikes at many of the nation's colleges and universities.

I had noticed an interesting phenomenon: Increases in federal financial aid were not improving college affordability. Each year, federal financial aid outlays would increase, but college tuitions would continue to rise above and beyond the rate of inflation. Much like the effects of subsidies on health care and the housing market, increasing student aid was insulating colleges from having to make market-driven cost-cutting measures, like improving productivity or efficiency. It appears that this may still be true today.

Last month, Andrew Gillen at the Center for College Affordability and Productivity authored a new paper introducing the "Bennett Hypothesis 2.0," an updated version of my original argument. Under the current financial aid system, he concluded, "As higher financial aid pushes costs higher, it inevitably puts upward pressure on tuition. Higher tuition, of course, reduces college affordability, leading to calls for more financial aid, setting the vicious cycle in motion all over again."

In 1987, I reached my hypothesis by examining the basic relationship between federal financial aid and tuition. Let's compare the numbers today. In 2010, the Department of Education distributed $133 billion in student aid. In 2011, it was nearly $157 billion, a 17% increase. Pell Grants increased from $29 billion in 2010 to $36 billion in 2011, a 24% increase.

At the same time, in 2011, costs at the average public university rose 5.4% for in-state students, or about $1,100. Average tuition at public universities rose 8.3%. The increases have greatly outpaced the rate of inflation, which was 3% in 2011.

Last month, Andrew Gillen at the Center for College Affordability and Productivity authored a new paper introducing the "Bennett Hypothesis 2.0," an updated version of my original argument. Under the current financial aid system, he concluded, "As higher financial aid pushes costs higher, it inevitably puts upward pressure on tuition. Higher tuition, of course, reduces college affordability, leading to calls for more financial aid, setting the vicious cycle in motion all over again."

In 1987, I reached my hypothesis by examining the basic relationship between federal financial aid and tuition. Let's compare the numbers today. In 2010, the Department of Education distributed $133 billion in student aid. In 2011, it was nearly $157 billion, a 17% increase. Pell Grants increased from $29 billion in 2010 to $36 billion in 2011, a 24% increase.

At the same time, in 2011, costs at the average public university rose 5.4% for in-state students, or about $1,100. Average tuition at public universities rose 8.3%. The increases have greatly outpaced the rate of inflation, which was 3% in 2011.

Furthermore, taxpayers are getting fewer returns for their money. In 2009, the six-year graduation rate of bachelor's students was 56% in the United States. In 1997, it was 52%. During that time period, student aid skyrocketed. According to the College Board, "Total student aid increased by about 84% in inflation-adjusted dollars over the decade from 1997-98 to 2007-08." Taxpayers are subsidizing higher education at greater and greater costs while institutional performance has not kept up.

This gap between enrollment and graduation costs the U.S. economy millions of dollars in potential earnings each year and expands the growing student loan bubble. Weighed down by rising tuition costs, students borrow more money each year to pay for college. The more they borrow, the more difficult it becomes for them to pay for college on their own or in a timely manner, and if they fail to graduate, they are left holding larger piles of debt.

According to the Federal Reserve Bank of New York, student loan indebtedness reached $867 billion last year. (By comparison, outstanding U.S. credit card debt was $704 billion.) And almost 15% of all borrowers have at least one past-due loan account. There are legitimate fears that this could be the next U.S. debt bomb.

Why should taxpayers continue to increase funding for federal aid programs that do little to control soaring college costs and rein in student debt? Like the 2008 subprime mortgage crisis, the middle class would be crushed by a mass student loan default. Our students and their families deserve better than this. As I said 25 years ago, "Higher education is not underfunded. It is under-accountable." Federal aid should be closely tied to academic performance, graduation rates and the ability of students to repay their loans in a responsible manner.

During his State of the Union address this year, President Obama said, "We can't just keep subsidizing skyrocketing tuition." He added, "So let me put colleges and universities on notice. If you can't stop tuition from going up, the funding you get from taxpayers will go down." It's encouraging to see the president acknowledge what has long been the argument of conservative education reformers. It remains to be seen if his threat holds any weight and if he will act on it.

http://articles.cnn.com/2012-03-22/opinion/opinion_bennett-college-costs_1_student-aid-financial-aid-tuition-at-public-universities/2?_s=PM:OPINION

[Jon Miller]

I agree, it would be better to just make them all free, or to legislate how much they can charge in tuition.

JM

[DinoDoc]

I'm not sure what making it free would acomplish other than to encourage irresponsible choices.

[snoopy369]

I agree, it would be better to just make them all free, or to legislate how much they can charge in tuition.

JM

You're taking the following input:
"Federal subsidies are causing a massive increase in tuition cost"
And producing the following two potential outputs:

• Increase federal subsidies (because the current ones are working really well?)
• Legislate tuition (because the market is not working?)

What I read is, "Federal subsidies are screwing up college tuition, so stop increasing/giving federal subsidies". I went to school on a combination of school-based financial aid and loans, but I'm very curious what my tuition would've been if I hadn't been able to get a Stafford loan for nearly half of tuition. How about letting the market get a shot at fixing it, since the federal ****ing with the market clearly isn't working? Have grants for poor students (expanded Pell grants, basically), do away with Stafford loans entirely, and middle class and up students fend for themselves. I suspect you'd find tuition dropping back to reality pretty quick when nobody can afford to go to these schools.

[giblets]

How do you know federal aid isn't helping? Are we supposed to think the supply of university enrollments is completely inelastic?

[DinoDoc]

How do you know federal aid isn't helping?

How do you know it is helping?

[giblets]

Do right wingers only care about supply and demand models when they're discussing the minimum wage?