Some years ago I was talking with a student who had taken a number of my classes and who was then just a few days shy of graduation. I asked her what she planned to do after college. She shrugged and said her plans were on hold; she had two jobs lined up and expected to be working about seventy hours a week “for a while.”
I asked her how long. “Oh, maybe three or four years,” she said. I looked at her blankly, wondering if I had intruded on some family trouble. In response to my silence, she added as if reassuringly, “It’s just my debt. I’ve got about $60,000 in student loans to pay off.”
If I had been talking with her a decade earlier, I might plausibly have wondered about the student’s good sense; in fact, she had taken an extra year and changed her major once or twice on her way to finishing her degree. No one forced her to attend a private university and bury herself under such debt at so young an age.
At the time, however, my wife and I had recently obliterated a third of my retirement account in order to get our two older sons through a Jesuit prep school, and we were fretting over college plans. That and something about the student’s resigned manner permanently shattered my academician’s indifference to the topic of runaway college tuition.
Why does it cost so much to go to college? In 1977, the year my first son was born, I started teaching full-time at Santa Clara, a private university. The tuition, room, and board for one year was $4,600 — about $14,000 in 2002 dollars. Today the same institution charges $36,000 for one year. In constant dollars, the cost has almost tripled over one generation. Or try it this way: during the same period in which the cost of living has increased by a factor of 3, the cost of a college education has increased almost by a factor of 8. Why?
The main thing to understand is that colleges tend to conduct their financial affairs in a manner exactly opposite that of a responsible household or a business disciplined by market competition. The standard excuse for skyrocketing tuition is “rising costs.” But as economist Thomas Sowell and many others have shown (to no avail), the “costs” of colleges and universities are largely determined by how much money they can raise from tuition, endowment income, and donations.
In the world of academia, a “cost” is whatever an institution decides to spend its money on — including the expansion of bureaucracies to bring in more revenue to underwrite new boondoggles dreamed up by faculty and administrators.
Administrative bloat is one fault everyone seems to agree about. A new term in the lexicon of collegiate jargon is “academic support professional.” The ASPs are non-teaching career bureaucrats and busybodies — auditors and counselors, systems analysts and affirmative action officers, institute directors and spin doctors and grant writers — plus their attendant herds of “administrative assistants” (secretaries).
Between 1975 and 1985, when student enrollments expanded nationwide by 10 percent, non-teaching college support staffs increased by more than 60 percent. Today administrative costs eat up half the annual budgets of most colleges and universities, compared with 27 percent in 1950 and 19 percent in 1930.
A less widely acknowledged trouble is faculty corruption. There are about half a million college and university professors nationwide. Many of them are great teachers whom no one but their students will ever know about. Most are neither great scholars nor original thinkers, yet a large portion (okay — roughly the noisiest 40 percent) behave as if they think they are, probably because they can’t stand the thought that no one else but their students will ever know about them.
These careerist academics are line-bred in graduate school to despise teaching and covet research; to curry favor and outmaneuver enemies; to politicize the personal and personalize the political. By the time they get their Ph.D.’s, they are less prepared to disseminate knowledge than to cultivate private agendas in the schools that hire them.
Forever hustling advancement, they make sufficient nuisances of themselves to wheedle full pay and benefits for teaching schedules that any working stiff would regard as half-time jobs.
The rest of the time goes into the travel and scribble of petty research projects, paid for by grants and by reduced teaching loads. So the schools, lusting after the prestige and name-recognition that supposedly come with a published faculty, must hire many more professors than would otherwise be needed to teach the same number of courses — yet another “cost” cited to justify hikes in tuition.
The least obvious culprits in what economist John Barry calls “rigging the price for higher education” are the students. On average, today’s college degree carries about 70 percent more earning power than a high school diploma, so the students have good reason to be flocking to college, even if the great majority have little interest in the life of the mind.
Yet they seem as well to have scant critical interest in the screwy means by which they make their degrees financially accessible. Ever since the graduating student told me about her $60,000 debt, I’ve been asking my students how they manage the high cost of their education, hoping to pick up some pointers for my own kids. A majority (64 percent at my university) carry financial aid packages, often of great complexity: arrays of state subsidies, federal grants, institutional scholarships, and subsidized loans.
The average debt burden of graduating students at my school is about $27,000 — but that figure applies only to the 64 percent whose financial affairs the school keeps minute tabs on. All the university knows about the remaining 36 percent is that full payment of tuition is somehow coming from them. My informal conversations with students leave me with the impression that only about half the students among the 36 percent come from parents and grandparents who can write checks for the full sticker price. The rest — about a fifth of all the students — carry the full burden, with colossal indebtedness and staggering personal sacrifice.
Of course, the easy availability of subsidized loan programs boosts indebtedness even more by pushing tuition higher, as the colleges discover more “costs” year after year. But the worst practice comes in the guise of philanthropy.
As economists have been saying for years (again to no avail — another sign that much academic research is either useless or ignored), the practice of individually tailored aid packages is a form of price discrimination. Like other monopolies, the colleges are able to determine what an individual student will pay and to charge just that amount.
The practice could land an ordinary businessman in jail, but the higher education monopolists enjoy a special dispensation accorded them by liberal politicians. As tuition is inflated beyond most students’ means, price discrimination gets more minute and intrusive and complex, pushing up administrative costs that help spark more tuition hikes, with the good intentions of redistributive financial aid dissolving into a languid sanctimony.
The students themselves, meanwhile, are dazzled and flattered by the attention they get with their elaborate financial aid packages — beguiled as well by the dubious notion that the world owes them a living and that someone else should pay for the choices they make.
Perhaps the economists are being treated like Cassandras because runaway college tuition — transparent in its causes and effects — is not really an economic problem. It’s a moral problem.
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