What are colleges doing to keep rising tuition costs down?
I’m curious. I see a lot of discussions on personal finance blogs about paying off student loans, and keeping student loan debt to a minimum by saving, working, and being smart about school expenses. I see a lot of discussion on political blogs about the student loan crisis, the cost of student loans to the greater economy, and student loan foregiveness.
What I don’t see, even if I look around, is what the colleges are doing about student loans.
A huge portion of students (over 70%) take out student loans to help pay for college. I’m sure that some of them take them out for frivolous reasons. Most students, though, take out student loans to meet tuition and other necessary costs of going to college. They do this because education costs have risen (and continue to rise) far faster than the rate of inflation.
If rising tuition drives rising student debt levels, what can be done about rising tuition?
The clear answer is that schools may have some tough realities to face. Their expenses and their demands may not be dropping, but most students’ resources haven’t kept pace. People may still see the need for higher education, but there seem to be a lot more people asking questions about its worth.
My little family is 12 years away from facing college tuition. We’re already pretty sure that barring a lottery win, Little Bit won’t be attending my alma mater, whose sticker price is currently over $66K a year. Even if she attends a local state school, though, we worry about how we’ll pay for it if costs keep rising.
Reasons Tuition Has Risen
I did a little investigating, and I found any number of explanations of why tuition has been rising faster than inflation.
- States have dropped their level of support for higher education, and colleges have passed along the difference.
- Schools receive fewer donations and many of their endowments have fallen. The schools have raised tuition to make up the difference
- Schools have increased their administrative spending and staff levels. High-level administrators have seen drastic pay increases.
- More people from a wider range of backgrounds attend college. Many of them need more support, both financial and academic, which has to be paid for by others.
- Students demand a greater range of non-essential amenities. Schools must supply them to compete for better, richer students.
- Many schools have added new academic programs without cutting them.
- Schools have raised tuition to meet the greater amount of money available to them as federal loan programs and grants have expanded.
- Schools have made pricing opaque. Many students don’t pay the sticker price. Since the pricing varies by student’s ability and willingness to pay, there’s less incentive for schools to control prices across the board.
If you want more explanation, the Washington Post did a terrific series called The Tuition is Too Damn High in 2013 that breaks down most of these theories. The short version is that while not all of these applies to every school, they all apply to multiple schools. Most schools are affected by more than one.
The question is, how many of these are structural and how many are based on choices? Do colleges need to have so many services to support students? Maybe, but maybe college for everyone is too expensive an idea to sustain. Should colleges drop smaller programs, like classical studies, to make way for more high demand programs? Is it in the college’s best interest to build climbing walls?
Should Colleges Make a Greater Effort on Tuition Control?
I’m sure that if you asked a college spokesman, they would tell you that that their school makes every effort to keep tuition costs down.
But if you Google “What are colleges doing to control tuition costs?” or similar searches, you rarely find college-led initiatives. You find suggestions for individual students to use, like completing college in 3 years instead of 4 (or 5, or 6).
The one college-oriented article I read? Two tiny private liberal arts schools cut their tuition substantially. They claimed they were going from “High tuition,high discount” to “low tuition, low discount.”
Pricing clarity is a good start, but it seems like schools should be doing more to keep those sticker prices down. If for no other reason than high alumni debt loads will cause even lower alumni donations.
Looked at that way, even the schools themselves mortgage their future with high tuition and dependence on loans. Long term, many of them will need a new strategy going forward. Maybe not the big dogs like Harvard and Duke and the state flagship schools, but certainly the South West State Universities and Obscure Historical Figure Colleges.
And, just sayin’, they probably don’t want the politicians to decide the best way to keep those tuition costs down.
So Where Are Their Ideas to Keep Rising Tuition Costs Down?
It’s quite possible that colleges are discussing tuition control, but they don’t seem to be generating a lot of discussion of ideas to keep rising tuition down, Most schools seem to be reacting, not planning structural changes to drive prices down. The schools seem to be using short-term thinking…snip a few professorships and hire adjuncts instead to raise tuition by 6.3% instead of 6.4% this year.
My humble suggestion: Schools would do well to look to other parts of the nonprofit sectors, where organizations have been dealing with many of the same trends (rising costs, rising administrative needs, diverse populations served, reduced government and donor funding) for a long time, without the ability to charge more for services.
It’s past time for a more public discussion. Schools have accepted the education price spiral for a long time, and they’ll probably need to make serious adjustments to make their way out of it. They would do far better to address the issue of untenable tuition head on than let others address it for them.
What do you think colleges can or should do to keep their rising tuition costs down? Am I being too harsh in saying “a lot more than they are doing now?” Are there really good discussions and ideas coming out of the universities to take more care to be affordable and financially responsible to their students? Is it too much to ask colleges and univiersities to address the student debt crisis by changing?