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Aidan Stern August 15th, 2023
Fewer people are enrolling in higher education. This trend has increased after 2010 and spurred questions about the worth of higher education. It is common culture in our American society to accept college as a norm. We’ve been raised to believe that college is what is expected of us after we graduate high school. However, these norms are changing. So, why?
Source: National Center for Education Statistics [5]
We are bombarded with news touting that colleges have become more expensive, but does this correlate with inflation? In 1963, the annual cost of tuition[1] at a 4-year public college was $243. After adjusting for inflation, this amounts to $2,431. The average tuition today costs $34,040.
After adjusting for currency inflation, college tuition has increased 747.8% since 1963. As our population has become more educated, we have become wealthier, which means we could pay for some increase. Right? Let's look at the numbers. From 2000 to 2020, average post-secondary tuition inflation outpaced wage inflation by 111.4%. So, where did tuition change the most? From 2011, when enrollment first started to drop, 2-year college tuition increased by 17%, 4-year private nonprofit college tuition increased by 28%, and 4-year public college tuition increased by 45%. Clearly, there is a problem with a tuition increase, but why has college tuition exponentially increased?
There are multiple theories of why college charges more per year. An impactful cause is a decline in state funding for public universities. State college funding used to be primarily funded by the state, but the money has dried up. The most recent decrease was around the Great Recession in 2008[2]. Beforehand, state colleges granted around $8,800 per student. Afterward, state colleges were funded with just $2,000 per student. We’ve had to tank the cost. As Virginians[3], our state universities have increased the revenue coming from student tuition from 24% in 1980 to 54% in 2022. While we are paying more for school, we aren’t getting as much bang for our buck.
One popular opinion is that colleges have wasted money on expensive amenities and administrative costs. There has been a rise in bureaucratic administration in colleges, which has not proven effective at increasing student graduation rates or advancing the university’s research rates. Since 2008, non-instructional spending, which includes student services (29%) and administration (19%), rose faster than instructional spending (17%). The administrator per 100 students ratio increased by 39%, while teachers and researchers increased by 18%.
How much does this cost[4] universities? During the 1980-1981 school year, colleges spent $20.7 billion on instruction and $13 billion on administrative duties. In the 2014-2015 school year, total expenditures climbed to $148 billion on teaching and $122.3 billion on administration. That increase in ratio is equivalent to an extra $45.5 billion. This waste is a massive amount of money. The university’s total revenues for the 2014-2015 school year amounted to $567 billion[5], so one-fifth of all revenue is delegated away from teaching and research resources for the university, and these professions are growing.
Is there a quick fix? No, but students are voting with their enrollment. In a demographic realignment, people have fewer kids, and where those kids go to advance their careers becomes very important. Some colleges will adapt to changing times and suit their educational needs. Other colleges will fall into disrepair. Unfortunately, these problems aren’t going to go away. We are at a tipping point in college reform. We get to write the story. With high competition and low-paying jobs coming out of university, many people are deciding to forgo the time-honored tradition. Will you?
Sources
Hanson, M., & Checked, F. (2023, September 6). Average cost of college [2023]: Yearly tuition + expenses. Education Data Initiative. https://educationdata.org/average-cost-of-college#virginia
Flannery, M. E. (2022, October 25). State funding for higher education still lagging. NEA. https://www.nea.org/nea-today/all-news-articles/state-funding-higher-education-still-lagging
SHEF. (2020, August 6). Shef State Profile for Virginia. SHEEO. https://shef.sheeo.org/state-profile/virginia/
Simon, C. (2017, September 5). Bureaucrats and buildings: The case for why college is so expensive. Forbes. https://www.forbes.com/sites/carolinesimon/2017/09/05/bureaucrats-and-buildings-the-case-for-why-college-is-so-expensive/?sh=4755e09d456a
Postsecondary institution revenues - national center for education ... The Condition of Education 2017. (2017). https://nces.ed.gov/programs/coe/pdf/Indicator_CUD/coe_cud_2017_05.pdf
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