by Mitch Kokai
Senior Political Analyst, John Locke Foundation
George Leef of the Martin Center looks into the causes of higher education’s large price tag.
The most striking fact about American colleges and universities over the last fifty years is how rapidly the cost of attending has risen.
A good perspective on the college cost explosion is found in a November, 2017 study prepared for the Joint Economic Committee of Congress. It states, “A student working full-time over the summer of 1971 would only need to earn $2.70 per hour, at a time when the minimum wage was $1.60 an hour, to earn enough to pay for a year at a public, four-year college. Today, that student would need to earn $38.63 an hour. If they wanted to attend a private college, they would need to earn $87.25 an hour to cover tuition, room and board.”
Getting a college education now costs far more than it used to, but are those costs justified? Could it be that the “product” colleges are offering is significantly better? Does that added cost benefit students?
A recent study entitled The Cost of Excess by the American Council of Trustees and Alumni (ACTA) sheds some light on those questions, focusing on how colleges spend their revenues.
After surveying cost data at a wide array of colleges and universities, 1,529 in all, the writers conclude, “Institutional spending continues to rise while contributing little to graduation rates. Moreover, investment in instructional staff—particularly tenured or tenure-track professors—has been overshadowed by increases in administrative staff, namely well-paid, professional employees.”
ACTA’s analysis shows that increased spending by colleges has been a strong trend no matter what the economic conditions in the country. In good times and bad, colleges continued to enroll more students and tuition climbed steadily higher. …
… Because colleges and universities are nearly all run on a non-profit basis, they don’t have much incentive to minimize costs. Trying to do so would put school leaders in conflict with key groups on campus that don’t want to have to economize.