The Rising Cost of College, Who's Fueling the Increase?

Below is a link to an article in the October 28, 2010 Wall Street Journal
"Tuition, Pell Grants Rise in Tandem"
http://online.wsj.com/article/SB10001424052702303443904575578651983962836.html?mod=googlenews_wsj
Tuition at public colleges up about 8%

Here's my take on the rising cost of college, who pays and why?

College education in our country is an objective by many. College, unlike kindergarten through 12th grades, is not a right but a privilege. (The Government seems to be leaning towards a college education becoming a right and not a privilege.) College has become a financial burden to the American family. College costs have gone up approximately 5% per year over the past ten years; higher than the inflation rate over the same time period. The Government doesn’t criticize the increase in cost. The Government’s answer to solving the increasing cost is to throw more money at the problem. Not more competition, not accountability by the schools, students or parents; but spending more with little or no accountability. The Government feels they must find a way to help students afford this increase. The Government often chastises other industries when their prices exceed inflation. They put pressure on those industries to reduce prices. Colleges seem to be immune from this rhetoric. Economics, taught at these same colleges, teaches that if more money is available to purchase a good or service the price of that good or service will increase. By making more money available to students to pay for a college education, the Government is fueling the fire, not creating a solution. By all economic teachings, more available money drives cost up.


The money used for these programs is tax payer money. Many of these taxpayers do not intend for their children to go to college. Their children are interested in other venues. They plan to go into a trade (carpentry, plumbing, construction, etc.) or into the military or some other vocation. They question why their money is funding another child’s potential livelihood and not their child’s.

Those who do attend college are finding themselves with more debt than they imagined. Parents also can be saddled with debt. Although college education has become the standard in education, just as a high school education was a couple of generations ago, the value of the education compared to the cost is being questioned. Although many companies require a college education, is the cost of a college education worth the potential job? Colleges need to find ways to make their tuition and fees more affordable to students. The schools need to enhance their efficiency, cut their costs, facilities and services to meet the students’ ability to pay without subsidies from the government. Education is the product they offer. Fancy dormitories, health club facilities and other non-educational amenities should be examined to see if they are worth the cost. Professors getting published, staffs employed to get grants, high salaried athletic coaches and other non-school related items, should not be at the cost of student’s tuition. It is argued that these facilities and positions bring money and prestige to the institution. If they are bringing in money, why does the tuition continue to rise? What is being done with the money?

If colleges want to pursue activities that do not directly benefit the student body, it should be financed by some other means than tuition.

The Government admonishes many industries, health care for example, when their rates increase higher than inflation; why do they give a free ride to colleges?

Endowments at some colleges are in the Billions. At $100,000 for a 4 year college education, $5 Billion would allow 50,000 students to go for free. Is tuition being used by the schools so they can keep a substantial war chest? Why does a college need $5 Billion in an endowment fund? If a college feels the need to keep such a large amount on hand, maybe they would be willing to part with the annual investment return on their endowment fund. Average annual returns of 8% on $5 Billion would yield $400 Million per year. This would be enough to fund the annual tuition for 16,000 students at $25,000 per year. Wouldn’t that be a great return on investment by giving an education to 16,000 students while maintaining a $5 Billion fund? It’s time colleges are held accountable. It’s time the Government stops answering the education problem by throwing more tax payer money at it. That cure (Government lending programs) continues to be worse than the disease.


See more information like this in my book:
Essays From a Fed-Up Middle Aged, Middle Class American" By: Andy Strum
Read sample chapters on Amazon at:
http://www.amazon.com/Essays-Fed-Up-Middle-Class-American/dp/1453640460/ref=sr_1_1?ie=UTF8&s=books&qid=1288285582&sr=1-1