From the NYT‘s piece on the financial troubles of higher ed:
25 percent of the private colleges that Moody’s rated did not raise
tuition in fiscal 2011 at or beyond the rate of inflation; 21 percent of
rated public universities did not do so.
In short, 75% of private colleges and 79% of public universities raising tuition by more than inflation is considered a tough year! How many other industries would see this situation as problematic?
HT: Tyler
READER COMMENTS
Bostonian
Jan 28 2013 at 10:57am
Simple, partial solution: the government should decide what a reasonable cost for tuition and room and board is, say $30K, and allocate need-based financial aid (Pell grants and guaranteed student loans) on this basis (or on a lower figure if that is what the college charges).
Colleges would be free to charge more than $30K, but
their students would not qualify for more federal loans and grants than students at schools charging $30K.
R Richard Schweitzer
Jan 28 2013 at 12:39pm
As to the suggestion of Bostonian, would that not require that we amend that particular provision of section 8, article I of the Constitution which specifically authorizes the appropriations for those purposes? :-))
Michael
Jan 28 2013 at 2:08pm
As always when looking at tuition numbers, please do not confuse “sticker price” with actual tuition paid per student. Most schools have a high listed tuition (for signalling purposes, if you will), but give a lot of financial aid and so have a much lower effective tuition. According to an NPR Planet Money podcast from a while back (http://www.npr.org/blogs/money/2012/05/11/152511771/the-real-price-of-college), average tuition paid has actually lagged inflation for many years now.
Thomas Sewell
Jan 28 2013 at 2:23pm
The current tuition price at most mid to high-end colleges is “All of your money and your parents money, plus whatever we can squeeze out of the government and whatever loans you qualify for.”
The actual sticker prices, as Michael notes, is irrelevant to the real prices, other than as an accounting trick or signaling mechanism.
Mike Rulle
Jan 28 2013 at 2:26pm
Schools care about what they receive, not sticker price. However, part of what they get paid are guarantees from the federal government. The price colleges receive has probably risen even faster than sticker as a higher percentage of students have been using loans.
As long as the Feds keep making up the difference, prices will rise.
Alexei Sadeski
Jan 28 2013 at 8:55pm
Don’t you love the subtle power of framing?
Shayne Cook
Jan 29 2013 at 7:45am
To Thomas Sewell:
Jeez, for a second there I thought you were describing the financing scheme for the health care industry rather than the higher ed industry!
Thomas Sewell
Jan 29 2013 at 2:06pm
Shayne,
No, the health care industry charges you whatever they feel like that week, then say you should have had insurance, but that they’ll be happy to put you on a payment plan if you can’t afford it all upfront.
Unless you’re doing vision or cosmetic surgery. That you have a choice of cheap providers for. Sort of “grey market” medicine without third-party payers.
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