Inflation of education costs vs. other costs: Can anyone supply data?

[SAM2]

A post about the rising cost of independent school tuition got me curious. Can someone please link to good data that compares the rise of education costs against other consumer costs? I know there are 1000s of articles out there that say college tuition costs have risen dramatically over the past 20+ years, but I'm instead looking for data that's more granular and more recent. Below are a few examples. It looks like the Bureau of Labor Statistics has lots of good data, but I couldn't find any pages there that compare education costs to other costs. I'd appreciate the education if someone can link to useful data.

http://www.nytimes.com/interactive/2008/05/03/business/20080403_SPENDING_GRAPHIC.html
Chart of inflation rates 2007-08. Education expenses up 5.5%, which is about as much as chicken (5.9%) and water & sewage (5.5%), a little more than financial services (4.4%), and a lot less than gasoline (26%) and eggs (30%). I really wish I could find something like this that looks at 5 or 10 year periods, like 2005-10 or 2000-10.

http://www.usinflationcalculator.com/inflation/current-inflation-rates/
Annual average inflation rate. About 3-4% until 2009-10, when it's fallen dramatically.

http://nowandfutures.com/cpi_lie.html
Comparison of consumer costs 2002-04. Gasoline, housing, healthcare, and food are all up (20%, 14%, 9.5%, 7%). Education costs up 6%. Taxes relatively flat at -1%.

http://freakonomics.blogs.nytimes.com/2009/04/21/the-true-cause-of-college-tuition-inflation/
Interesting post about possible causes of college tuition inflation.

I know there's lots in all this data to gripe and argue about, and I also know most people on DCUM (myself included) love to gripe & argue. But I'd really appreciate it if people would use this particular thread to provide data. If you want to gripe/argue about the data that gets posted here, it's easy enough to start a new thread. Thanks.

[Anonymous]

Just google the consumer price index. That breaks down annual inflation rates for all sorts of things.

[SAM2]

Anonymous wrote:Just google the consumer price index. That breaks down annual inflation rates for all sorts of things.

Most definitely. I see lots of data at the BLS. But it's all unlinked bits of data -- for example the annual CPI for 2007 for different industries. What I'm hoping to find is some sort of multi-year moving average that compares many different types of expenses. I suppose I could plug all the BLS data to a spreadsheet to construct my own analysis, but I'm not that motivated, and I suspect someone's already posted something like that online somewhere. Any ideas? This is not an area I have studied much before, so I'm probably missing something obvious. Thanks in advance.

[Anonymous]

Link to some useful data here:

http://blog.american.com/?p=19189

[SAM2]

In a related vein, I came across some data today on private school budgets. The data at the links below show aggregate data on how much private schools spend per student on various categories. They also show how much income schools draw per student from various sources.

http://www.nais.org/resources/statistical.cfm?ItemNumber=146713
http://www.nais.org/resources/statistical.cfm?ItemNumber=144490
http://www.nais.org/resources/statistical.cfm?ItemNumber=146528

I haven't spent much time analyzing the data, but I suspect it would be interesting to compare to public school spend data to see where private schools are spending more money. This might also go toward answering the difficult question about why private school tuition costs increase at a pretty steady clip each year. Without spending any time on analysis, my out-of-my-ass hypothesis is that teacher salaries are a big driver.

Interesting stuff.

[Anonymous]

Salaries are a huge % of the budget. Mostly teachers, but my DC's school in recent years has added more learning specialists, a FT lab tech, an extra person (or two) for college admissions, a L/MS and a HS counselor. I think the tech staff has expanded as well. 20 years ago most of these positions didn't exist at the school.

[Anonymous]

Anonymous wrote:Salaries are a huge % of the budget. Mostly teachers, but my DC's school in recent years has added more learning specialists, a FT lab tech, an extra person (or two) for college admissions, a L/MS and a HS counselor. I think the tech staff has expanded as well. 20 years ago most of these positions didn't exist at the school.

I think this is the key. And not only are there more resources in terms of people but many private schools have facilities inflation too. Turf fields, new gyms, climbing walls, theaters, photo labs, etc. Those all cost money not only to build but also to maintain.

[Anonymous]

I think that anyone who has had a kid in a private school over the last 4-5 years (if not longer) has witnessed annual tuition increases in the range of 5-7%. Even this year with inflation at zero, one Big Three announced a tuition increase of 4.5%, which is absurd on its face. The NAIS data cited above is not very useful for this area. It shows a median tuition of $18K for middle school and $20K for high school. Teacher salaries (also in th NAIS) are no doubt higher in this area. Finally, my sense is that tuition at DC private schools have increased because of the same dynamics as colleges and universities. There is graph at 725 that shows this incredible increase. Again, as I have stated before, I think boards and school administrators have failed to control expenses.

[SAM2]

Anonymous wrote:The NAIS data cited above is not very useful for this area. It shows a median tuition of $18K for middle school and $20K for high school. Teacher salaries (also in th NAIS) are no doubt higher in this area.

Perhaps you would prefer to look at the AISGW data instead. It's at the second link.

I suspect that the tuition increases you're complaining about are not limited to the Washington DC area. Just as higher education expenses are increasing nationwide at a fast pace, so are secondary school expenses. You may chalk it up to mismanagement, but I think there might be some broader reason, since it seems unlikely that almost every college and private secondary school in country is collectively mismanaged. But I'm often wrong and uninformed, so maybe I'm doing it again here. Once you dig deeper into these budget numbers, you'll probably be able to convince me that you're right.

[Anonymous]

Teacher salaries and benefits are, by far, the largest expense that schools incur. Schools can't cut teachers the way that other businesses can make efficiency gains and consequently cut employees. Comparing tuition increases to the inflation rate makes no sense, because the inflation rate is premised on businesses that can reduce their costs by cutting headcount and, in place of the fired workers, automate or outsource their functions. None of us want our independent schools to start cutting teachers and start teaching kids with computers, or to have more kids per teacher. But that is the logical consequence of the points that are being raised.

Add on top of this the pressures that 22:04 raises, where parents demand schools add specialists in a variety of contexts. There is an"arms race" among independent schools where schools are marketing themselves against the competition based on what types of specialists are available for kids, and what fancy new facilities are available. All of this leads to increased cost. On the other hand, losing the arms race leads possibly to reduced enrollment which also leads to increased tuition.

These are complicated questions. It is not as simple as comparing tuition increases to inflation, and then saying that schools have failed to "control expenses."

[Anonymous]

Teachers and learning specialists, I get, but have you looked at the size of the support staff in many of these independent schools? How many of them, for example, have (or really need) 2 or 3 people on the admissions team? A 2 or 3 person development team? Numerous assistants, people whose sole job it is to communicate with parents/ market the school, etc.? IMO, this is where cuts could and should be made.

[Anonymous]

The support staff is the tail on the dog. Their salaries and benefits are, relatively speaking, a very small part of school budgets as compared to teacher salary and benefits.

But anyway, let's assume for the sake of argument that every school has a few extra support staff employees who can be cut. OK, so cut them. It's just a one-time deal and savings. So, then what? You can't keep cutting year after year; many of them are indeed necessary. This is not an area where schools can continually make efficiency gains and cut headcount the way businesses can. Tuition starts increasing again, at a rate in excess of inflation. And not because schools are failing to "control costs."

[Anonymous]

Anonymous wrote:Teachers and learning specialists, I get, but have you looked at the size of the support staff in many of these independent schools? How many of them, for example, have (or really need) 2 or 3 people on the admissions team? A 2 or 3 person development team? Numerous assistants, people whose sole job it is to communicate with parents/ market the school, etc.? IMO, this is where cuts could and should be made.

Admissions and development are crucial. And, at least at some schools, the job isn't just to communicate with parents and market the school. It's to make decisions about what the student body looks like (diversity, financial aid, new vs. existing families, personalities and learning styles, and dealing with application for a wide range of grades/ages and just the sheer volume of applications for the youngest kids where good decisionmaking is labor-intensive -- it's not just a paper file) and to generate revenue. Presumably, it's pretty easy to tell whether the development folks are earning their keep. Certainly there may be some schools that are over-staffed in these areas, but I don't think that those numbers are out of line at others. (Actually, DC's school has a larger admission team than that -- probably 6-7, looking at all levels).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Salaries are a huge % of the budget. Mostly teachers, but my DC's school in recent years has added more learning specialists, a FT lab tech, an extra person (or two) for college admissions, a L/MS and a HS counselor. I think the tech staff has expanded as well. 20 years ago most of these positions didn't exist at the school.

I think this is the key. And not only are there more resources in terms of people but many private schools have facilities inflation too. Turf fields, new gyms, climbing walls, theaters, photo labs, etc. Those all cost money not only to build but also to maintain.

And some of the new facilities exist to enable new course offerings (which means more staff). That said, some schools then try to find ways to leverage their facilities investments (camps, rentals, adult ed). Although that process, in turn, may require the addition of another staff member...

[Anonymous]

I think there are a number of reasons why tuition will tend to rise faster than inflation, some of which have been touched on:

1. Nearly all of the cost is in salaries, so costs will appreciate with wages rather than inflation.
2. You are paying for exclusivity. If the price fell too much the exclusivity would be diminished.
3. Schools set prices at such a level that will enable them to complete enrollment, maintain desirability etc. In a region where the average income of the richest X percent has risen rapidly, the average amount they charge can increase by a similar amount.