The price to go to college has become very expensive and continues to remain high. Both public and private universities charge tuition and other fees that is adding crushing debt to the middle class. The reasons for the high price of a college education are vast that it would take a Ph.D.-level thesis or a book to cover all the details. Below are few of the factors that I can think of for the current situation:
- Some of the executives in US colleges are paid corporate executive level salaries. In the public colleges this comes from tax-payers money and tuition paid by students. So there is no accountability or questions from any one whether it is morally right to make millions or hundreds of dollars from an educational institution.
- Every college/university have scores of administrators whose job is just to push paper around or “administer” the college. Of course these people have nothing to do with actually educating the students. Very high salaries for totally useless work adds to sky-high budgets.
- Many of the colleges have buildings that look like five-star hotels and the spending on lavish sports facilities is astonishing. The costs to build and maintain adds millions to the yearly budget.
- The demand for a college exceeds or remains constant regardless of the quality of education. A third-rate company looking to hire a secretary nowadays requires a college degree to apply. For higher-level positions a degree is even more important. So naturally the wonderful guys and gals running the colleges know this and act accordingly when it comes to setting tuition and other fees.
- Since getting a student loan is super easy for students regardless of the college or degree, administrators know that even if the tuition goes to $1 million per year it is simply fine to just add it to the student’s loan. While Congress made it easy to receive student with a noble cause, schools have hijacked it as a license to print as much money as they want.
An interesting article in the journal over the weekend notes that the University of Miami currently charges $75,230 a year for tuition and room and board. This is indeed shocking!. The sad thing is even after paying over $300K for four years the degree earned could a liberal arts degree and a student may end working at a restaurant or a bar making $40K or so if they are lucky.
The below chart shows the average college tuition and fees from 1971 to 2020:
Click to enlarge
Source: Al Lord Profited When College Tuition Rose. He Is Paying for It, WSJ
Student Loans Outstanding:
Source: WSJ
In this country, every college or university is like a mini “kingdom”. In public colleges, every month like clock the state wires millions of dollars in tax-payer money to each school. In addition, tuition and other revenue from things like sports pour in as well. With all these funds, colleges figure out ways to spend it leading to some useless statues, art sculptures, lavish buildings, sports complexes and of course salaries and other benefits. For politicians who authorize state’s funds, the current design ensures a nice base of loyal voters from this huge higher education academic community.
By making a college degree a basic requirement for any job, companies also have made the demand of side of the college degree permanent. A degree is not needed to type a letter in a computer, schedule a meeting, make a reservation at a restaurant, book a limo to the airport, answer a phone call, receive packages from a courier, say “hi” or “hello” or “how can I help you”, etc.
With the result, the only people that are left holding the bag are the students and their families. Everyone else is just moving along like “there is nothing to see here folks”.
Update(11/28/22):
US Tuition Fess vs Wage Growth: Chart
Click to enlarge
Source: University tuition vs. wage growth, Genuine Impact Newsletter, Substack
Earlier:
