Randall Smith on the explosion of college tuition costs. Education is very expensive, and it’s important for parents and students to know exactly what they’re paying for.
It’s late August, and young adults across the country are headed to college, and parents across the country are writing large tuition checks.
Americans worry incessantly about the inflation in medical costs – and with good reason. But over the past fifteen years, the inflation in college and university costs has been even greater. Colleges and universities across the country have been raising tuition at a rate four times faster than the overall inflation rate.
What does that money pay for? A little thought experiment may help. Let’s imagine, for a moment, educational institutions in which the buildings are modest and fully financed so that, not only are the costs of their construction paid off, but their financing has been sufficient to cover depreciation and maintenance. Since such financing is rarely included in the costs of new buildings. When they are opened (to great fanfare and praise for administrators), what should be an asset becomes a liability, and a further drain on general operating expenses.
But let’s say the buildings are fully financed and that the endowment has been developed sufficiently to cover operating expenses. What, then, on our little ideally financed campus, would the basic costs of instruction be? Let’s say we set the salary for faculty at $75,000 per year, which is near the current average. To that rather generous salary, we’ll add another 20 percent to pay for benefits – also generous, but this is what private contractors are required by the government to put aside. The total would be $90,000 dollars per year. Let’s say that we asked our professors to teach three classes per semester, with an average of twenty students per class (a low number for many college classes). In that case, faculty members would be teaching roughly 120 students per year.
Here’s where it gets interesting. To make the $90,000 we need to pay our faculty – and remember, we’ve got the lights and electricity and all the rest taken care of – we would only need to charge each student $750 per course. If each student took five courses per semester, tuition per student would be $3,750 per semester or $7,500 per year. That’s it.
Now if you’re paying more than $7,500 per year in tuition – and everyone is – what, you might wonder, is all the rest of the money being used for? I teach at a university, and I don’t know. Nor do any of my colleagues. We regularly ask to inspect the budget figures, but they are not forthcoming.