By Richard Vedder
Sandy Baum has released her annual study on tuition costs, and, surprise, surprise, tuition costs are continuing to rise at more than double the rate of inflation. Social Security recipients are getting a 2.9 percent cost-of-living adjustment soon, but college tuition fees rose over 6 percent at both public and private four year schools this fall. The more cost-conscious community colleges saw costs rise a more reasonable 4.2 percent.
You might say "published tuition fees are a fiction, since a majority of students get some sort of financial aid." That argument fails on two grounds -- first, a good hunk of the financial aid is the form of loans requiring repayment. Second, "net" tuition fees --after financial aid -- also rose more than 6 percent last year at the four year schools. A quarter of century of trends where tuition rises at double the inflation rate and at an inflation-adjusted rate of over three percent a year continues unabated.
This is happening, of course, in a period in which America is telling higher education loud and clear that the rising real costs are a major problem. The Spellings Commission explicitly urged universities to limit tuition increases to the rate of growth in per capita or per family personal income (I know, because I inserted that passage into the report with the support of chair Charles Miller). State legislatures and governors are cajoling some universities to freeze or limit fee growth. The media are screaming increasingly about this problem. But colleges are not taking this seriously, with the possible exception of the community colleges and a small minority of other schools.
Rather, many schools are like Boston University, which has just announced it (like scores of other schools), wants to join the top ranks of universities, and is raising $1.8 billion to do the job -- hiring more very high paid superstar professors, for example. Of course, all schools are trying to get tax exempt monies from the private sector to lead to ever more costly education. The bottom line, more than ever, is the US News & World Report rankings. Congress could do something about this by putting limits on the use of tax exempt monies in higher ed, although it is easier to propose the idea than actually draft the legislation (I know, because I have discussed the issue with congressional staffers interested in putting some limits on the wild collegiate spending spree).
I always said that if the colleges ignore the people, ultimately the people will turn on them. So far, they have not, since the college-high school earnings differential is large enough to justify exorbitant fees on a private investment decision basis (in most cases). But their arrogance is breathtaking, and the mood to "do something' about it is growing. If it reaches a threshold where it becomes a major national political issue, something will be done. Likely, it will be bad for the nation. Certainly it will not be liked by the colleges who are now behaving more like the spoiled rich teenagers they are educating than as responsible members of the American community.