Why is your tuition so high? Part 2

Some time ago, I wrote an entry on the high cost of college. This isn’t exactly news, but the further I delve into the problem the stranger it seems. I’m not all that concerned about the demand side, at least right now. Clearly colleges charge as much as they do because they can, but they have to spend that extra revenue on something. The extra revenue certainly isn’t going into exploding endowments.

A colleague of mine and I are trying to figure out where, exactly, all of the money goes. After all, presumably during the last 40 years, certain aspects of education should have gotten more efficient. We make our own photocopies now. We have computers and do our own typing. But presumably these effects are minimal. So far, the best collected set of data we’ve found is at the Delta Project, which collects an ostensibly uniform dataset for every college in the country.

A couple of facts:

  • In the last 30 years, the cost of a year of college, as a fraction of the median US household income has approximately doubled.
  • By the same standard, the average faculty salary has stayed remarkably constant.
  • Looking at the line items: academic expenses, administrative expenses, student support, etc., all of them seem to have grown at more or less the same rate, since they make up a fairly constant fraction of the total academic budget.

This last point suggests a tuition increase of a thousand cuts. Everything is slowly getting more and more expensive. And while some of it results in better education (e.g. slightly lower student/faculty ratios today than 30 years ago), for the most part, it’s not clear what the students get out of the increased tuition.

But we have a theory: What if the increase ultimately comes from a proliferation of undergraduate majors and programs? Students take smaller classes (which are more intensive and expensive to teach and require more classrooms overall). There would be more academic advisers, support offices, and recruitment officers, each of which add to the bottom line. Put simply, in an effort to make every school all things to all people we’re quickly getting away from any economy of scale.

But how do we prove it?

-Dave

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3 Responses to Why is your tuition so high? Part 2

  1. Josh K-sky says:

    My first suspicion about the proliferation of classes hypothesis is that it’s more than counterbalanced by the proliferation of graduate and adjunct teaching. Expensive full professors used to do the work that is now done by cheaper, younger academics with less job security. This saves money.

    But it may be less than counterbalanced.

    There’s a number of people doing good writing on the economics and sociology of the university — I’ll try to point you towards some of the things I’ve seen.

  2. Josh K-sky says:

    The author I was thinking of was Marc Bousquet and someone else recommended Christopher Newfield. I don’t think either is addressing your question directly, but they may have additional context.

    Another question I would ask is what is the rate of change of total tuitions to university budgets. This whole enterprise may be very hard to control across state universities, small liberal arts colleges, private universities, etc.

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