Finally, an honest headline: Colleges charge big tuition because they can

[TalkingDog]

http://www.jconline.com/article/20110821/NEWS0501/108210346/Colleges-charge-big-tuition-because-they-can?odyssey=tab|topnews|text|FRONTPAGE

But if Hoosiers are paying the price for higher education, the truth is their willingness to do so largely explains why college costs so much.

The reason tuition has been on such a steady upward march can be found in the most basic lesson of an entry-level econ class: supply and demand.

Tuition goes up because it can -- because there currently are no market forces or legislative controls to curtail it.

snip

Tuition at Indiana's seven public colleges has collectively jumped by more than 300 percent over the past two decades, according to a Star analysis of tuition rates using numbers provided by the Indiana Commission for Higher Education.

[bluestateguy]

1. Exactly

In those rare circumstances when a college/university's enrollment goes on a steady downward cycle, the administration responds by freezing or cutting tuition to bring students back. So it does work the other way too.

[demosincebirth]

2. Let's check the professors salary. That's where the tuition increases go.

[enlightenment]

3. hahaha . . .

right.

The administrators', probably - and perhaps a very few, very senior profs who bring in boatloads of grant money. Not so much anyone else.

[JVS]

16. The senior profs who bring in boatloads of grant money get paid out of the grant money.

[knitter4democracy]

4. Nope. Try again.

Just think about all the heating/cooling issues for a campus. Every building, every dorm room, every large space to heat/cool during the year and how much those costs have gone up. Think about every campus bus/car for every team's trip and how much gas has gone up, how much gas it takes to mow, and how many plane tickets are bought for conferences and how those prices have gone up.

Trust me, it's not the people making more money.

[Lorien]

6. Lol! Yeah right. You know how much I make for teaching a three hour course

over an ENTIRE SEMESTER??? About $2,500. NOT per week-but for the whole Semester!

Professors barely scrape by, like ALL teachers in America. The ones who make the big $$ are the administrators and various investors (in the case of for profit universities).

[demosincebirth]

10. Sorry, I misspoke I was thinking administrators and Regents . I love teachers.

[QC]

7. LOL! n/t

[McCamy Taylor]

8. ROFLMAO. Dude, check the football team. Check the administration. Check anyone but the profs.

[alcibiades_mystery]

9. ROFL

I'm guessing you don't know many professors.

:rofl:

[dionysus]

12. ROFL... a swing and a miss folks...

[Javaman]

13. LOL Really?

that's the best you got? right wing talking points?

dang, do a little research, why don't you?

[JVS]

14. Bzzzzzt.

[Starry Messenger]

26. No! But thanks for playing.

[spooky3]

5. There is plenty of competition. Nothing prevents students from shopping

for schools based on cost. They can even go overseas if they want to. The point is that a lot of people (including students from overseas) are willing to pay for the education because they believe it is worth it. "No market forces"???? Sounds as if the author flunked Econ 101.

Students and their parents demand more and more services, and universities keep adding staff (not faculty) to provide additional services. Meanwhile, states have cut way back on subsidies to universities. Those are major reasons for the increased tuition costs. As long as enough people are willing and able to pay what is being charged, the costs will be passed along.

Notice this paragraph buried on p. 3 of the article:

""More than 70 percent of our in-state students will be receiving one or more grants to help cover the cost of education," said IU spokesman Larry MacIntyre. "That means only 30 percent are paying full cost.""

Here's an even more interesting tidbit--look at this posted comment in response to the article:

"I am the Gregory Moser portrayed as a "victim" in Sunday’s article on college expenses( August 21st) . I want to clarify that my family in no way feels victimized. Yes, college is an expense, but we were glad to provide it for our son. I also stated that I find it ridiculous that colleges are criticized for passing on rising costs to students in light of cuts in state funding. How are schools supposed to provide state-of-the-art- experiences and attract excellent faculty on stagnant budgets? Although I was correctly quoted, the omissions created the portrait of a whining parent. There are no complaints here. The expense was worth every penny. Thank you Indiana for subsidizing public universities in Indiana."

[exboyfil]

11. How far do we want to stretch the demand model though

At out state universities they are charging more for engineering and nursing than liberal arts majors. The claim is that these majors cost more than other majors. Early on they also claimed that since, engineering majors have a better chance to get internships and jobs later, that they can also afford to pay more.

I guess I would reply in two ways. The first is that, given the outside money available to engineering programs from research grants, is it really that much more expensive. The second is that which do you need more of - engineers or journalism majors?

I am not complaining - the state has the right to decide what they charge for their subsidized programs, but I don't think it makes sense to try to promote STEM programs while at the same time asking engineers to pay more for their education.

In our state if you are a family of four making more than about $60K, you can forget about any sort of non-merit based aid. Also you need close to a 4.0 and a 33-34 ACT to even get some sort of merit based aid.

Our state even with one of the lowest tuition rates in the nation, has some of the highest student loan amounts after graduation.

[spooky3]

23. Engineering faculty command higher salaries than do most other specializations.

If a school wants to compete for the best faculty, they will have to pay the market rates. These best faculty are the ones who do the work to successfully write and compete for research grants, that then help subsidize the engineering school and university (e.g., through overhead rates payments) and sometimes provide employment for students. I don't know much about nursing programs but they may also have higher costs to the university than other programs.

The point is that despite a lot of cost cutting in universities (e.g., using more and more part time faculty who are paid very little) the costs are real, and with the state subsidies declining, someone will have to pay those costs. As long as people believe they are getting value for their money, and enough of them have the means to pay or to borrow to pay, they will do it. Until the state decides that it is willing to tax people including those who are not sending kids to school at higher rates to keep up with these costs, those who are "consuming" the education will have to pay for it.

[JVS]

15. The problem is that we have a financial aid system that is based on loans.

Without the widespread availability of loans, there would be limits to the prices that students are willing/able to pay. Instead loans are available and students see taking on debt as an alternative preferable to not getting an education. Rather than a system that keeps tuition low so that it is affordable to all students, or God forbid increase need-based financial aid, the monied interests would rather make credit available so that tuition is "affordable" to all students as long as they are willing to go deep into debt. This is exacerbated by the fact that a lot of the schools out there that charge a lot of money are either A) elite private schools, thus convincing students that the risk is definitely worth the reward in comparison to the generally cheaper state university, or B) non-elite private schools that serve students whose academic records are too weak to gain admission to other institutions and thus are not in a position to be selective.

There is a similar effect within the auto market. If people were not able to get auto loans so easily, it would be very hard to move cars that cost $30K and more.

[Viking12]

17. Tution increases are directly proportional to legislative cuts

Look at the state contributions to any public university system over the last 30 years. Funding has been slashed. Students are stuck with the bill. Another failure to invest in our future.

[IndyPragmatist]

18. Universities have the same problem as many public schools....

When money is available, they spend it, and spend all of it. When the money slows, things get difficult.

I'm glad that the article was from Indiana, because we are a perfect example of wasteful university spending. Many public school districts in our state (including mine) have the same problem. They want to entice students to come there with big, fancy, shiny buildings. The high school I graduated from looked like an airport. It was massive and it had labs that would only be used once a week, multiple practice fields for EVERY sport. It was top of the line. Now, they are cutting teachers because a referendum was shot down on the ballot. Normally, this district is fully behind the schools. But they have seen lately how mismanaged the district is.

They see the fieldturf on all the athletic fields, they see the new fleet of buses for sports teams, they see the million dollar LED screen in front of the building, they see the new computers in every classroom (to replace 5 year old units that were more than capable), but they don't see any money going to benefit the students education. Now, the school is stuck with maintaining these expensive pieces of equipment and they can't afford it. Not replacing the surface of the football field would have kept all the teachers that were cut on staff for 3 years, but a football field that looks good on TV is more important.

Kids do not need $140million buildings to learn. Everyone blames republicans for the cuts to schools in Indiana, when that's not true at all. Many, many democrats support the cuts because its obvious how much waste is in the schools. (This doesn't apply to all districts, but many in Indiana) When a district is bragging about a multi million dollar theater, but also complaining that they don't have enough money to pay teachers, then there is a problem.

But here is the big difference, its much easier to show your feelings to a local school district than it is a university. There will be plenty of kids who will go to Purdue, despite its cost going up 300% in recent years. If the kids can't afford it, they will take out federal or private loans. The costs will keep going up and up until a college education isn't worth the cost (we may be very close to that already).

Too many people think that fancy toys and computers make a good education, they dont. Parental involvement and teachers that want to teach make for a good education.

[Viking12]

20. Shiny gyms = the welfare queens of public eduaction

largely non-existent but make for a compelling narrative

[JVS]

22. Even when they are existent, it's because that's what the donors decide.

People want a building named after them. They don't want to be known as the guy who paid for the grass to be cut for 10 years or the guy who got all the parking lots repaved. They don't want to be the guy who pays for some other person's building to be kept in good condition.

Tuition has to cover all the shit that nobody wants to spring for and that isn't covered in grant funding proposals.

[spooky3]

24. Exactly. At a private university I am familiar with, donors paid 100% of the costs

of a new business school building. The students benefit greatly from that gift. They (and other sources of income) are paying only for the maintenance, utilities, etc., along with faculty and staff salaries, etc. Their tuition would be a lot higher (or if the market would not allow it, lots of corners would be cut for the same tuition price), if it were not for those gifts.

A lot of readers likely missed the pgh. that financial aid covers a LOT of students' stated tuition rates. When I was an UG applicant years ago, there was virtually no aid available for middle class kids in a lot of public universities, even for valedictorians and other top non-athletic scholarship students. Today, in part because of all the magazine rankings, top students who help the school's "numbers" can often get substantial support, especially at the graduate level. And there is a broader definition of need-based support, such that a middle class family no longer has to essentially spend all of its savings for one child's college. That is a MAJOR reason why "tuition" has increased--the schools have raised the stated rates and the wealthiest kids who aren't top students, and out-of-state students pay much more than the other kids.

[spooky3]

25. those situations really are not comparable, even if they were common and all the facts were clear.

Purdue competes on a world stage for students and faculty; no one is required to go there, unlike elementary and secondary school. If your kids go there as in-state students, they are getting a bargain, because many other sources of funds are paying the difference between their tuition rates and the real cost of what they receive. If Purdue's spending were totally out of line with what their competitors are doing (public and private, in the US and outside the US) and they had to charge above market fees to students, they would quickly have a problem. Universities are much more in a "free market" than elementary and secondary schools.

Indiana, and the kids who attend its universities and their families, get back far more than what they invest in universities.

[ProdigalJunkMail]

19. well, when lottery proceeds fund huge portions of your tuition

then naturally the prices will climb. people don't seem to factor this into the equation very often.

sP

[Hawkowl]

21. Easy credit

The easy availability of student loans plays a huge part in pushing up tuition. Similar to easy credit inflating real estate prices. The loans are guaranteed by the government and you can't get out of them for any reason.