Can College Prices be Controlled?

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Dwight Augustus Moncur

A-706 Assignment #3

Professor Long

Can College Prices be Controlled?

College costs and prices is perhaps the most difficult issue facing higher education.  Students, their families, and lawmakers often label colleges as greedy.  Colleges decry criticism from politicians and the press that they say distorts the issues.  At the same time, many college leaders acknowledge that tuition increases have become a serious problem.

Clotfelter (1996) notes from the perspective of a family sending a child to college, it no longer is uncommon for the financial burden of a four-year program to reach six figures, making college the second largest life-time expense for many families, after the purchase of a house.  

This essay addresses the growth in college prices over the last 30 years by focusing on the public university segment of the market.  These three major questions are addressed: What has happened to price during the last 20 years?  Why have costs increased?  And what does the future look like?

Individual Costs  

The price of education has increased for both private and public universities over the past 20 years.  In 1994 the cost of public university per student was $8,900 for a single year of a four year course.  This cost included tuition of $2,686 and the rest included food, board, transportation and books (Deloitte & Touche, 1996).  The same study looked to the future and projected educational cost rising at different rates, at 4% in 2000 it should have been $11,375 (Deloitte & Touche, 1996).  The frightening thing is that by the year 2015 at 10% pa increase this would amount to $66,528 (Deloitte & Touche, 1996).  

Considering this,  one must remember that these are not adjusted figures, and in real terms the increases may not be as large as they appear, as inflation also causes other goods as well as income to also increase.  Therefore, one can see that the cost of tuition inflation is increasing at a rate far in excess of inflation, and as such there is cause for concern. The mean tuition fee received by the college is also increasing, but one can also argue the cost are increasing for the colleges. (Economagic.com, 2000)

Even when adjusted for inflation, the price of public universities rose more than 50 percent during the 1980s (Mumper, 1996) .  Several factors played important roles in the college price increases since 1980.   Mumper (1996) expands on four things that have happened to price over the past 20 years in terms of expenditure pressures.  First, Mumper expands on increasing instructional expenditures.  Over the past 20 years institutions have been forced to pay more for the same amount of instruction.  Instructional cost increased as a result of higher faculty salaries, changes in the distribution of faculty, changes in student demands, and increasing benefit costs.  Second, he examines increasing administrative expenditures.  The increased administrative expenditures exist in the development of new and expanded student services.  Compared to times past colleges today provide career placement offices, tutoring and mentoring services, child care centers, handicapped services, computer labs and computer support systems, adult learning services, etc.  Comparatively, government support was reduced in the 1980s, and public schools were forced to more aggressively seek outside funding sources.   Third, Mumper notes the increase in price over the past 20 years as a result of increasing research expenditure.  Research became a higher priority in many public universities as faculty were expected to engage in research in order to secure promotion or tenure.  Things that heightened research expenditure at the public and private level included purchasing new technology, and  hiring and train staff to operate that technology.  Equipment, laboratories, libraries, and faculty offices all needed to be overhauled to accommodate advanced technologies.  Mumper (1996) notes a final indicator as to what happened to price over the past 20 years, that is, increased institutional student aid expenditures.  The rising cost of college meant institutions had to increase awarded financial aid, as the cost of providing scholarships to a fixed number of students rises proportionally.

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The Reasons for the Increasing Cost

There are many reasons why the cost have increased.  The first must be inflation, but college cost have also increased in real terms, that is increased over and above inflation.  However, it is also one of increasing competition and as such where the costs are increasing there needs to be justification for that increase.  If one looks at the number of people employed in education this has been increasing at a fast rate, and this is true throughout the entire public education. (Economagic.com, 2000)

There are many other costs involved in education in addition ...

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