When will the college tuition bubble burst?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The biggest rise in college costs is due to bloated administration. I'm a professor, and over the last twenty years, I have seen an exponential increase in the number of vice-provosts, vice-deans, offices of XYZ, etc. Many of these administrators, especially at the senior level, are paid as if they were corporate executives, with salaries hovering around 7-figures at some universities (and not necessarily the best ones, either).
This all comes unfortunately at the expense of full-time faculty. To be sure, full-time faculty are expensive, but they are paid far, far less than what people imagine. Most faculty in the humanities and social sciences earn well under 6-figures. In the hard sciences, they earn a bit more, but a fraction of what upper-level administrators earn and certainly less than what they'd earn in private industry.
This means that students get the short end of the stick. The pay high tuition for being taught by adjuncts, who have no job security and work for less than $5000 per class.

Another professor here and I completely agree. (I am non-tenure track but a full-time instructor and make $65k for 9 months of work/year, with a PhD and years of work experience).

I'm about 15 years removed from the university setting, but I guess I have a hard time imagining that there are enough senior-level administrators to really have a significant impact on the overall budgets. But there does seem to be a lot more academic support programs (and obviously associated costs) for students.

A LOT has changed in 15 years.

and that's because there are so many fewer tenure/tenure track profs. profs used to do academic advising, even of freshman, and now it's farmed out to an office of very well paid professional "academic advisors." Outrageous!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:IDK but we make close to 300k and aren’t sending our kids to private schools because we think the tuition is ridiculous!

You looked at the wrong privates. At that income (for the strong student) there are many privates that will discount well below the public school cost. Not the top 30 schools but solid colleges in the top 100.

Please enlighten me. Sone schools we briefly considered were Wakeforest, Emory, Tulane, and Lafayette, Washington and Lee and Lafayette. From everything we could see, we would be full pay. It’s not worth it when our in-state option is probably UVA and/or William and Mary.

You just named a bunch of elite colleges. If that’s your category then no, not a lot of merit there. LACs in the forties-sixties give lots. My B+ kid got merit in the $25-45k range at several, making them comparable and occasionally cheaper than public options. If your kid is a UVA candidate there are lots of LACs that would pay to have an excellent student like that. Higher up, Richmond’s top awards are generous. W&L’s Johnson is a free education.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:IDK but we make close to 300k and aren’t sending our kids to private schools because we think the tuition is ridiculous!

You looked at the wrong privates. At that income (for the strong student) there are many privates that will discount well below the public school cost. Not the top 30 schools but solid colleges in the top 100.

Please enlighten me. Sone schools we briefly considered were Wakeforest, Emory, Tulane, and Lafayette, Washington and Lee and Lafayette. From everything we could see, we would be full pay. It’s not worth it when our in-state option is probably UVA and/or William and Mary.

You should consider Lafayette

[Anonymous]

Anonymous wrote:

Anonymous wrote:^^^ Thoughtful post. Don’t forget bloated administration.

Let me thank you for your thoughtful, nuanced post by adding my typical right wing catchphrase

The “right wing” post just confirmed by several academics on the thread.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The high cost of tuition is driven by the availability of federal loans to fund it. The Department of Education could put a brake on the rising costs by imposing rules on schools for eligibility, including limiting the price tag, for tuition or for other expenses.

+1. Stop making it so easy to get a loan for college, and the cost will go down.

This. Like many messes, the federal government is to blame.

If you want lenders to stop giving education loans in a carefree manner, make those loans dischargeable in bankruptcy. Students loans are not dischargeable, so there is zero incentive for lenders to actually consider ability to repay. That debt will follow you to the grave.

Make the lenders have some skin in the game and they’ll be more circumspect with their loans, which means colleges will have to react by bringing down prices.

My bankruptcy professor in law school walked us through it.

This is by far one of the best and immediate ways to address the cost insanity.

The govt had the best intentions in the 80s when they set up the govt loans for education program...everyone should have the chance at higher education in the US. Opportunity is one of the big things our country stands for. But unfortunately the US is also a market economy and the loan program set the stage for massive increases in tuition as more applicants entered the fray and colleges took advantage of the market demand. It’s created a mess. There’s not much alternative to paying the going rate of attending college other than not going, and most folks are not wanting to make that choice. Too many US jobs and career paths require a bachelors degree whether you really need one or not.

But, if lenders put pressure on the schools by refusing to loan out ridiculous sums of money to 20 year olds, that might pressure tuition rates to at least stand still if not deflate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The high cost of tuition is driven by the availability of federal loans to fund it. The Department of Education could put a brake on the rising costs by imposing rules on schools for eligibility, including limiting the price tag, for tuition or for other expenses.

+1. Stop making it so easy to get a loan for college, and the cost will go down.

This. Like many messes, the federal government is to blame.

If you want lenders to stop giving education loans in a carefree manner, make those loans dischargeable in bankruptcy. Students loans are not dischargeable, so there is zero incentive for lenders to actually consider ability to repay. That debt will follow you to the grave.

Make the lenders have some skin in the game and they’ll be more circumspect with their loans, which means colleges will have to react by bringing down prices.

My bankruptcy professor in law school walked us through it.

This is by far one of the best and immediate ways to address the cost insanity.

The govt had the best intentions in the 80s when they set up the govt loans for education program...everyone should have the chance at higher education in the US. Opportunity is one of the big things our country stands for. But unfortunately the US is also a market economy and the loan program set the stage for massive increases in tuition as more applicants entered the fray and colleges took advantage of the market demand. It’s created a mess. There’s not much alternative to paying the going rate of attending college other than not going, and most folks are not wanting to make that choice. Too many US jobs and career paths require a bachelors degree whether you really need one or not.

But, if lenders put pressure on the schools by refusing to loan out ridiculous sums of money to 20 year olds, that might pressure tuition rates to at least stand still if not deflate.

then we return to where we were before; kids who have parents who can pay will be unaffected, kids who have parents with good jobs who need loans will pay higher rates but still get an education, kids who need loans with poor parents or parents with terrible credit will be SOL

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The high cost of tuition is driven by the availability of federal loans to fund it. The Department of Education could put a brake on the rising costs by imposing rules on schools for eligibility, including limiting the price tag, for tuition or for other expenses.

+1. Stop making it so easy to get a loan for college, and the cost will go down.

Yeah this. Would probably take an act of congress but as PP said no federal funding for private schools with tuition above a certain level. Same provision for out-of-state public. I bet the schools will adapt real quick and get 'lean' in areas with waste and overspending in order to lower tuition. Even the 'reachy lottery' schools don't like the optics of being seen as bastions of economic 1%ers, a change in federal loan law will make them stick out sorely and they'll move to fix, others will either follow or fold.

This is the sort of post I expect to see on a site like DCUM, where it seems like 90%+ of users have HHIs above $250k. For the kids in those families, there's really no honest question about whether they can go to college. Of course the vast majority can. Yes, the loans suck, and perhaps parents don't want to help, but it is at least a clear and feasible option for the vast, vast majority of kids in those situations. And still would be possible almost regardless of what the government would do with federal student loans.

Then there's the families at or below the median household income of $68k per year. Or even harder, in the bottom 10%, which in Maryland would mean about $25k per year. In these cases, federal grants and loans are critical to simply giving these students have the option to go to college.

Cutting federal student loans programs wouldn't hurt the DCUM crowd. Perhaps they'd benefit from slightly reduced tuition costs. But it would absolutely hurt the many young adults to need this funding to have any hope of paying for college.

There's no easy answer here, but I don't think market forces are going to help without dramatically screwing over the lower socioeconomic classes. Subsidies don't work well if you don't have tight control over the industries benefiting from those subsidies. I personally think the best option is to dramatically improve the funding to public universities, making sure that they are affordable to all. Federally-mandated state reciprocity agreements can help provide competition within the public education space. Fix state/federal student aid to the public university tuition cost (with some adjustment to account for direct subsidies to the public schools), and hope that they'll fall in-line.

It might still create a two-tiered system of public and private schools, but I'm not overly worried about that. Public research universities are already quite good. The top-end of public universities is first-rate. The bottom tier won't be great, but that's probably OK for a variety of reasons. I think the key would be making sure that the middle-tier public universities are on-par with private liberal arts colleges. As part of this, it would make sense to try to make sure that there are plenty of smaller, public colleges with strong on-campus cultures, to replicate the benefits many of the private colleges give you. (See the University of Minnesota-Crookston as an example)

It would work if the government, rather than oking massive amounts of loans at all levels, would provide higher grants to lower socioeconomic folks in return for a certain number of years of govt service. Just like the military. Then those folks get a college education, the government has an increased pool of workers that potentially become career govt workers, and loans are now discharged in bankruptcy so the lenders put pressure on the schools for more reasonable tuition rates.

[Anonymous]

Yes but over-leveraged, under-endowed institutions can’t just slash their tuitions and expect to survive. They rely upon that revenue for a shocking percentage of their operating costs. They’ll need to chop tons of administrative overhead, reduce programs, retire faculty. It isn’t that easy and wouldn’t happen overnight.

[Anonymous]

Anonymous wrote:Yes but over-leveraged, under-endowed institutions can’t just slash their tuitions and expect to survive. They rely upon that revenue for a shocking percentage of their operating costs. They’ll need to chop tons of administrative overhead, reduce programs, retire faculty. It isn’t that easy and wouldn’t happen overnight.

those schools already have a reckoning coming when the student population as a whole starts to contract in a few years

[Anonymous]

Anonymous wrote:The high cost of tuition is driven by the availability of federal loans to fund it. The Department of Education could put a brake on the rising costs by imposing rules on schools for eligibility, including limiting the price tag, for tuition or for other expenses.

Oh my gosh - this is so true. I remember when I was in law school, the max yearly subsidized federal loan amount was about $30K, so the yearly tuition/costs were (surprise) about $30K for several years. Soon after I graduated, my bar association sent out an announcement that it was very proud to have successfully lobbied Congress to double the yearly subsidized loan amount to "maintain the ability of students to keep up with rising costs" and the yearly tuition/costs rose for my law school quickly went to (surprise again) $60K.

[Anonymous]

To the academics upthread, what are your views of the growth of administrative overhead, deanships, and other non-teaching salary overhead? My grumpy retired professor uncle says he used to do many jobs himself when he wasn’t in the classroom that are now done by a staff of four. Have you seen a gigantic shift that partly explains the cost-side growth? It can’t all be climbing walls and glassy cafes and construction mania.

[Anonymous]

Anonymous wrote:To the academics upthread, what are your views of the growth of administrative overhead, deanships, and other non-teaching salary overhead? My grumpy retired professor uncle says he used to do many jobs himself when he wasn’t in the classroom that are now done by a staff of four. Have you seen a gigantic shift that partly explains the cost-side growth? It can’t all be climbing walls and glassy cafes and construction mania.

to be fair, your grumpy uncle may have been replaced by an adjunct with no benefits and a salary a fraction of your uncle's. In most cases, they aren't going to wearing many of the hats your uncle wore

[Anonymous]

I bet that we will see a change as large numbers of the brightest and best young mind stop attending a small number of schools. In my kids' high school, several of the top students in the last few years have turned down admissions at schools in the US news top 10 for full merit scholarships at lower ranked schools. When employers/graduates schools find better talent away from "prestige" schools, these schools won't be able to charge as much. Of course, this shift could just allow public schools to charge more.

[Anonymous]

Anonymous wrote:I bet that we will see a change as large numbers of the brightest and best young mind stop attending a small number of schools. In my kids' high school, several of the top students in the last few years have turned down admissions at schools in the US news top 10 for full merit scholarships at lower ranked schools. When employers/graduates schools find better talent away from "prestige" schools, these schools won't be able to charge as much. Of course, this shift could just allow public schools to charge more.

I think that’s working opposite of the way you think it is. The “lesser” schools are doing all the discounting and the tippy-tops are getting full pay. I see the phenomenon you’re talking about but there’s a gigantic line of equally qualified kids behind those kids ready to step in and pay full boat. Ivy apps were off the chart this year. There are lots more wealthy people than there are elite college spots.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm in academia. There are a lot of factors at play here of course. On the spending side, potential students show up and want to see how nice our non-academic facilities are, like the student center, cafeteria, dorms, and athletic facilities. That all costs money and drives our costs up.

Then on the consumer side, it's sort of a moral hazard. Student loan money is basically free, with no thought given to your ability to pay it back later. You can get just as much student loan money if you are studying social work or elementary education as if you are studying computer science. I'm leaving the societal benefit of each aside -- just it's a fact that some professions pay more than others. Colleges can raise tuition, then the student loans will rise to cover that increase. Not much incentive to keep tuition down.

Then you have foreign students. By law, they are not eligible for financial aid. The middle class in China (for example) is larger than the entire US population. It's very prestigious for your kid to study in the US, even at third-tier schools. Universities love them because they pay the full tuition. The number of these students has increased greatly over the last few years. That means you have a bunch of foreign students ready to pay full fare, along with well-off American residents ready to pay full fare, and lower income level students armed with student loans ready to pay slightly discounted tuition (the university will find some financial aid, often from hapless donors, to cover the difference).

Where I think we will see _some_ focus on value is at 2nd and 3rd tier schools. There's less of a "name" to sell on, and they tend to draw only regionally not nationally.

The fix is to limit student loans, but that's politically untenable.

Those are easy targets to pick on, they don't actually make up a significant portion of spending by colleges and universities. And they're typically paid for with fees, rather than tuition itself. I'm sure they do play a role in the cost of college, but instruction itself is still what's driving the costs.

Somewhere between half and three-quarters of the instruction is done by adjuncts who are paid an average of $3000 per three-credit class. That's not what is driving the costs.

Perhaps I was loose with terminology. I meant the overall costs to provide instruction, including institutional support and academic facilities. Not just the cost of instructors/professors/etc.

+1 My spouse works at a private college, and salaries/spending were being slashed even before the pandemic to cover the costs for a new STEM building. When I toured schools with my high-school kid last year, every school was bragging about shiny new science buildings, so it is obviously an important marketing point.