Speaking of credentialism and college tuition

I was bemoaning the fact that 18-year olds today must take on more debt to earn a college degree that will get them a lower-paid job than in previous eras, and a few minutes later came across this:

It’s been eight years since the Great Recession caused many states to scale back their higher education budgets, and the vast majority of states haven’t fully restored that spending despite improvements in the overall economy.

A new report from the research firm Young Invincibles, a millennial advocacy group, finds that 48 states -- all but Alaska and North Dakota -- are spending less per student on higher education than they did before the recession. Louisiana’s funding has fallen the most since the recession (41 percent), followed by Alabama (39 percent) and Pennsylvania (37 percent).

On average, states have cut funding per student by 21 percent since the recession. Tuition at public schools has increased 28 percent over the same period. (Private school tuition has increased about 20 percent in that period, according to the College Board.)

[snip]

Three-quarters of American college students attend public colleges.

As States Cut Funding, Tuition at Public Colleges Soars

Inflation matters, too.

In a low-inflation environment, employees have lower raises and repay debt in more expensive dollars.

ABSTRACT

This paper shows that although the top ten percent of colleges are substantially more selective now than they were 5 decades ago, most colleges are not more selective. Moreover, at least 50 percent of colleges are substantially less selective now than they were then. This paper demonstrates that competition for space--the number of students who wish to attend college growing faster than the number of spaces available--does not explain changing selectivity. The explanation is, instead, that the elasticity of a student's preference for a college with respect to its proximity to his home has fallen substantially over time and there has been a corresponding increase in the elasticity of his preference for a college with respect to its resources and peers. In other words, students used to attend a local college regardless of their abilities and its characteristics. Now, their choices are driven far less by distance and far more by a college's resources and student body. It is the consequent re-sorting of students among colleges that has, at once, caused selectivity to rise in a small number of colleges while simultaneously causing it to fall in other colleges. I show that the integration of the market for college education has had profound implications on the peers whom college students experience, the resources invested in their education, the tuition they pay, and the subsidies they enjoy. An important finding is that, even though tuition has been rising rapidly at the most selective schools, the deal students get there has arguably improved greatly. The result is that the "stakes" associated with admission to these colleges are much higher now than in the past.

The Changing Selectivity of American Colleges Caroline M. Hoxby
NBER Working Paper No. 15446
October 2009
JEL No. H75,I2,J24

Not sure what she means by the 'deal' students get at a selective college.

Will let you know once I've skimmed the study....

"College as Country Club"

ABSTRACT

This paper investigates whether demand-side market pressure explains colleges’ decisions to provide consumption amenities to their students. We estimate a discrete choice model of college demand using micro data from the high school classes of 1992 and 2004, matched to extensive information on all four-year colleges in the U.S. We find that most students do appear to value college consumption amenities, including spending on student activities, sports, and dormitories. While this taste for amenities is broad-based, the taste for academic quality is confined to high-achieving students.....

In line with the human capital framework developed by Becker (1964), economists typically model education as an investment wherein individuals forgo current labor market earnings and incur direct costs in return for higher future wages. While this framework does not rule out that education may also provide immediate consumption, such consumption aspects have received little attention in the literature.1 Recently, however, there has been increasing attention devoted to the recreation that accompanies investment in higher education, as illustrated by the newspaper headlines above.2 The media attention coincides with an accumulation of evidence on limited student learning (Arum and Roksa, 2011), diminished study effort (Babcock and Marks, 2011), and declining graduation rates (Bound, Lovenhiem, and Turner, 2010).

While the evidence on whether colleges today devote a greater share of resources to consumption and recreational amenities than they have in the past is inconclusive, it is clear that there is substantial heterogeneity in the emphasis that institutions place on amenities (Jacob, McCall and Stange 2013a).3 In 2007, for example, the average ratio of amenity to academic spending was 0.51 across the roughly 1,300 four-year public and private non-profit postsecondary institutions in the United States. The ratio varied tremendously, from .26 at the 10th percentile to .80 at the 90th percentile. Thus different institutions make very different choices about the optimal level of consumption amenities to offer their students. While there are several systematic patterns to this heterogeneity – for instance, public institutions spend relatively less on consumption amenities– the sources of these patterns have not been previously explored.
COLLEGE AS COUNTRY CLUB: DO COLLEGES CATER TO STUDENTS’ PREFERENCES FOR CONSUMPTION?
Brian Jacob
Brian McCall
Kevin M. Stange
Working Paper 18745

I got soooooo tired of looking at amenities.

I don't think we saw a single professor on any of the campuses we visited.

We did see some books.

Open SUNY at Cost of College

‘SUNY to boost online offerings, push early graduation’

Grace's post reminds me of something a student in one of my classes told me. It was very sweet.

I teach in a small, non-selective college that has no campus life whatsoever and is short on dorm space to boot. So a lot of the kids live in a large chain hotel and are bused back and forth.

My student was from Staten Island and had chosen to live in the hotel instead of commuting to school because, he said, "I wanted to have the college experience."

Meanwhile C. tells me he's not getting the "college experience" because he attends a university with neither a campus nor a football team.

He has a point.

Wisconsin introduces competency exams!

From College Degree, No Class Time Required:

David Lando plans to start working toward a diploma from the University of Wisconsin this fall, but he doesn't intend to set foot on campus or even take a single online course offered by the school's well-regarded faculty.

Instead, he will sit through hours of testing at his home computer in Milwaukee under a new program that promises to award a bachelor's degree based on knowledge—not just class time or credits.

"I have all kinds of credits all over God's green earth, but I'm using this to finish it all off," said the 41-year-old computer consultant, who has an associate degree in information technology but never finished his bachelor's in psychology.

Colleges and universities are rushing to offer free online classes known as "massive open online courses," or MOOCs. But so far, no one has figured out a way to stitch these classes together into a bachelor's degree.

Now, educators in Wisconsin are offering a possible solution by decoupling the learning part of education from student assessment and degree-granting.

Wisconsin officials tout the UW Flexible Option as the first to offer multiple, competency-based bachelor's degrees from a public university system.

By CAROLINE PORTER
January 24, 2013, 6:32 p.m. ET
Wall Street Journal

Wow.

I'm thinking....all those disruptive technology people may turn out to be right for the wrong reason.

The coming Disruption won't be courses going online.

The coming Disruption will be courses going away altogether. (Some of them, anyway.)

The tests go online, not the courses.

I don't believe in making predictions, but even so I have simply never been able to see how MOOCs save the day. I can't stand online courses myself, my students don't like them, and I don't know any grownups who like them, either. The people touting them (and investing in them) don't seem to have taken any coursework via MOOCs themselves, as far as I can tell.

So while the logic of the MOOC -- put the best professors online so thousands can learn! -- often seems unassailable, I just don't see it. Put it this way: I don't believe in making predictions, and I continue to wonder what I'm missing, but I will not be investing my pennies in Udacity, Coursera, or edX.

I have always thought, though, that there is a major use for the internet when it comes to assessment.

Maybe college competency exams are the missing piece?

Such a scenario -- MOOCs fail as a means of making college affordable, but competency exams succeed -- strikes me as possible.

First, according to the Bain/Sterling Partners report, one-third of U.S. colleges and universities are in financial trouble.

Second, the economy continues to be depressed and, absent "regime change" at the Federal Reserve,  will remain depressed.^*

Given a depressed economy, I assume some colleges will close.

College closings will put pressure on state universities to expand, but state colleges are also in financial stress and have been raising tuition. They are in no position to grow.

At some point, it seems to me, political pressure will build on state legislatures to find another way to provide college diplomas.

In short, I can imagine Wisconsin's move attracting a lot of imitators, and sooner rather than later. I can also imagine a circular effect, with college closings leading to the introduction of competency exams,  and the introduction of competency exams then leading to more college closings.

That's disruption.

We'll see.

If competency exams begin to take hold, I can imagine a number of other developments that might be very interesting.

^* The economy is growing but is not going back to trend as it always has done in the past, including the Great Depression. I know people hold out hope that a housing recovery will lead to a real recovery, but since I am persuaded by Scott Sumner's analysis, I don't see housing as the white horse.

chart from: historinhas
and see:
Lawyers without Law School
proposal for a national baccalaureate
why college costs so much
US News: 2-year law degrees

why college costs so much

They're paying the adjuncts too much.

sources:
Moving Beyond Grade 12
By Lynn Olson
Published: January 4, 2007
Education Week


Health Law Pinches Colleges
By MARK PETERS and DOUGLAS BELKIN
Wall Street Journal
Updated January 18, 2013, 7:53 p.m. ET

5 years for a 4-year degree

From Believe it: Harvard cheaper than Cal State
By Matt Krupnick

Add to the equation that students at smaller private colleges often can graduate sooner, saving thousands of dollars over California's public universities, where cuts have made it difficult to get all required classes in four years.

Families and students considering Cal State "do have to think of it as a five-year proposition, at least," said Vicki O'Day, a Menlo Park college-admissions consultant.

Both of my sister's kids are going to need an extra year of college in the UC/Cal State system entirely because of scheduling problems.

no, parents are not stupid, Post number I've-lost-count

Here we go.

Who still believes college sticker prices matter?

Some 58 percent of students from lower-income families and 62 percent of those from middle-income backgrounds are likely to eliminate schools from contention based simply on price. In comparison, 48 percent of affluent households crossed colleges off their list because of price.

Despite the stubborn belief that price-tags matter, two-thirds of students who attend private and public colleges in this country receive some type of tuition break.

Despite the stubborn belief that price-tags matter, two-thirds of students who attend private and public colleges in this country receive some type of tuition break. At private institutions, 85 percent of students receive an institutional scholarship or grant.

I just read this passage out loud to Ed, who said: "If 2/3 of all college students are receiving some type of tuition break, that means parents are aware tuition breaks are available. I doubt they're just getting tuition aid dropped on them randomly."

Speaking as a parent, I have a stubborn belief that price-tags matter.

The reason I have a stubborn belief that price-tags matter is that .... price-tags matter.

Here's how it works (short form).

1. While your child is ages 12-16, you read articles and attend guidance presentations in which you are told that nobody pays sticker price.
2. Then, when your child turns 17, you discover that virtually everyone you know with a child who is 18 is paying sticker price. 

How it works (long form).

1. While your child is ages 12-16, you read articles and attend guidance presentations in which you are told that nobody pays sticker price.
2. If you're paying attention -- and, if CBS Money Watch is to be believed, a lot of parents are paying attention -- at some point along the line you realize that: a) 33% of all college students - the number paying sticker price - is a big, not small, number of kids and your kid could be among them; b) most discounts are nominal at best (e.g. the $2000 merit scholarship to Vermont --  out-of-state cost $45K -- awarded to a friend of C's); and c) significant merit aid is contingent upon your child attending a school at least one tier below the best schools that accept him. 
3. Then, when your child turns 17, you discover that virtually everyone you know with a child who is 18 is paying sticker price. 

today's brain teaser

What is the difference between a trained economist and a guidance counselor?

ANSWER: An economist needs a Ph.D. to tell you nobody pays the sticker price.

update: Cost of College says 1/3 of all college students are paying sticker price. I feel as if I know about half of them.

stuck (college tuition)

The lesson from "Bennett Hypothesis 2.0" (pdf file) is that there is an overwhelming danger, especially over time, that higher financial aid will lead to higher tuition, says Gillen. Barring an overhaul of the nature of competition in higher education, there are a few other ways to avoid this scenario, he says.

[snip]

[T]uition appears stuck in an upwards spiral.
Revisiting the Hypothesis That Tuition Rises With Student AidBy Caralee Adams on February 22, 2012 10:00 AM

Are we stuck in the same spiral with health care costs? I'm thinking we are -- or, at least, that we have been for a while now.

Ditto, I think, for public schools, at least in my town: the more we spend, the more we spend.

Stuck in a spiral.

College Costs and Aid

There was an interesting article this week in the San Jose Mercury News, comparing the real costs at public California universities to those at private schools. I thought it was interesting to see that the kinds of issues we've been talking about for a while are just starting to make it into the mainstream.

Particularly relevant:

"At UC, "we hear from students who say, 'I was accepted at Cal, but such-and-such private university offered this aid. Can Cal match that?' said Anne DeLuca, UC Berkeley's acting admissions director."

Merit Aid for Parents

Catherine has kindly offered me the keys to make the occasional post here at KTM. My kids are too young to have issues with math education yet, so I will probably stick to posts about college admissions, which has been a big topic lately. I thought I'd start with a primer on merit aid.

Merit aid is probably the least well-understood piece of financial aid. The entire way that colleges figure out what you will pay is purposely vague anyway. It is based on a sense that a college that costs a lot is perceived to have a high value, while lowering tuition makes a school seem like it is lower in quality. I’m not kidding here – a few years ago, a consultant recommended that to raise our enrollment, we raise our price by 10K per year and raise average financial aid per student by 9.5K. They figured that would actually attract more students by making us look high quality and generous with aid.

The cost of college is adjustable – an institution won’t tell you the real cost until after you have been accepted and they see your FAFSA (which is basically the information on your tax return – imagine if a car dealer asked for that information before you started negotiating!) Most schools have a discount rate, which is the ratio of the real cost to the sticker price, but the published discount rate isn’t meaningful. Instead, the discount rate is different for every student.

So what should a parent understand about this process? First, the largest non-need based scholarships are grouped together as merit aid. You never apply for merit aid specifically. Instead, you are considered for merit aid as part of the admissions process. For the most part, privates give more merit aid as part of so-called enrollment management, though as Catherine noticed, state schools are also starting to compete with merit aid, especially for out of state applicants. Enrollment management is the process of getting a class of students with the desired statistics (grades/scores) that can pay the bills. So a student who is in the bottom 25% of the admitted students will be asked to pay full fare (or full fare minus any federal or other need-based financial aid, but that’s another topic). The admissions and financial aid folks know this person is probably excited to be admitted at all, so will make it work. Another student in the top 10%, on the other hand, has other options and is likely to get a better package with some kind of scholarship.

To some extent, every college wants the same students, but some schools give more merit aid than others. The Ivies and the top liberal arts colleges, which admit ~10% of their applicants, don’t give much merit aid. They don’t have to – even their top 25% applicants are excited to get the admissions letter and they can fill a strong class without discounting tuition.

There is a book out there that discusses all this in more detail, called The Financial Aid Handbook: Getting the education you want for a price you can afford.

If you go to the Amazon link and search inside the book for merit aid, you can get the main points. The Amazon site also lets you look at their list of sixty schools that give a significant amount of merit aid. You will notice that the 75% verbal/math SAT score for most of these schools is 1300-1400. So a student with 650+ SATs and solid grades can potentially score some good deals, although not at schools anyone has necessarily heard of! Also, the 25%/75% SAT numbers are public (although as the CMC scandal shows they may not be totally accurate.) You can see an example here, and find many others at collegeapps.about.com

The final thing parents and students should know is that, within a tier of institutions, you can bargain with financial aid. If Oberlin gives you a better package than Macalester, it is worth seeing if Macalester will match or beat it. However, Yale will not be impressed by an offer from Oberlin, but would try to match or beat an offer from Harvard or Princeton.

Crazy U - Andrew Ferguson on why he wrote the book

Ferguson:

An editor/friend of mine planted the seed for the book when he asked me to write a magazine article about Katharine Cohen, an extremely successful and extremely expensive private college counselor in Manhattan. I spent a fair amount of time with her and discovered her to be an appealing subject. What really opened my eyes, though, was an information seminar she held one winter evening in suburban Connecticut. Like most parents with kids about to apply to college, I’d heard how the process had descended into Absurdistan. But it wasn’t until I saw the feral squint of parental ambition in the faces of these well-to-do moms and dads that I realized how weirdly competitive and confused the whole thing had become. These people were out for blood -- they were going to do whatever it took, including hire a private counselor for $40,000, to get their little Ashleys and Caitlins into Brown. My own son was a junior in high school at the time, just starting to daydream about college, and I remember thinking, “Yow, this is what we’re up against?”
'Crazy U' by Sam Patulla
Inside Higher Ed

Glen on the flood

In a comment on another thread, Glen writes:

SteveH asked: But how about the MITx degree? What's the catch?

The catch is that nobody at MIT (that I know of) is talking about an MITx "degree". These and the new Stanford online classes only give you credit toward a degree if you are an admitted MIT or Stanford student.

Otherwise, the idea is to give you some sort of acknowledgement that is carefully designed to make it clear that it is NOT MIT or Stanford credit. Both institutions are desperate to avoid diluting their own brand equity.

However, these projects often take on lives of their own. Some Stanford students are now complaining that they have to pay $5000 to take the same online class that non-students take for free. No difference at all in the educational experience, assignments, tests, feedback from TAs, etc., but the Stanford student pays a fortune and gets Stanford credentials; the equally-taught non-student gets it for free and gets no Stanford credential. That's an unstable situation, I believe, that may end up like breaching a barrier between two oceans at different levels. I'm looking for a flood to pour through this opening, which might overwhelm the people who are trying to keep these projects under control.

I see them right now as desperate to defend their monopolies but well aware that huge pressures are mounting to change the system. I think they figure, rightly, that if they don't disrupt themselves, someone else will do it to them. They probably don't want to be the venerable Kodaks and Fuji Films of higher ed as the world goes digital.

The final section of Walter Russell Mead's The Ice Cream Party and the Spinach Party is directly relevant.

Crazy U

Heard from Susan S yesterday, who wanted to know if I'd read Crazy U by Andrew Ferguson.

Answer: yes, and I've been meaning to post excerpts forever. The book is fantastic. If you're sending a child to college any time soon, you must read it (along with Barry Seaman's Binge and Tom Wolfe's I Am Charlotte Simmons, neither of which I have had the nerve to crack as yet...)

Susan says I have to get to Crazy U now, so here goes:

The cost of college is the consuming preoccupation for parents, of course, and a major source of the craziness. It's not hard to see why. I graduated from a small liberal arts college in 1978. My annual tuition bill was $5,100. If my school's tuition had tracked inflation, the bill today would be $16,500. Instead it's nearly $40,000--an exponential rise repeated at nearly every school in the country.

But unlike other questions related to college admissions--how do I make my kid write the essay, do we really have to do a tour, who designs these stupid applications, when will it all be over?--how to pay for school is a peculiarly sensitive matter. With the Kitchen People I could start a good thirty- or forty-minute chain rant y asking about the college counselors at their kids' high schools. But when I'd ask about college costs I'd provoke a quick Vesuvius-like first, followed by a slow glide into silence, a lot of foot-shuffling and ceiling glancing, until people drained their cups and wandered off for a refill. Nobody likes to talk about money, especially when you're being reminded you don't have enough of it.

[snip]

But when it came to finance I restricted myself for the most part to College Board and the Department of Education Web sites. I took their directives to be authoritative. (If you can't trust an agency of the federal government, who can you trust?) By the time I was through collecting material about college costs, I had enough documents to make several impressive new stacks in the dining room. There were booklets, worksheets, request forms, disclaimers, power points, suggested guidelines, official guidelines, disclosures, charts, backgrounders, tables, monthly planners, and FAQs beyond number. Usually the sheets showed ranked masses of bullet points with impenetrable headings: "ICR Consent to Disclosure of Tax Information," "Repayment Plan Selection," "DCL GEN-04-04 General Guidance for FRAC Participants," "Fafsa4caster," "Income Based Repayment Selector," and "FFEL Convertible-rate Interest Rates Calculation Sheet." I could concentrate on them for no longer than forty-five seconds at a time. Then I'd look up and hear Patton: "Very difficult, very complicated."

Among those reams of paper many pages were pure salesman-ship--and what the CB and the Education Department were selling was, once again, college itself, the raw idea of it, quite apart from any considerations that might draw a kid to one particular school or another, or heaven forbid toward a future of work and family without higher ed. The message was nmistakable: When it comes to college, you should just go. Don't worry so much about the money. Go. The money--we'll help with the money. Just go. Go, for crying out loud.

One of the first sheets I acquired from the CB, under the section College Costs, set the tone. It offered a little USA Today-like charticle--half chart, half article--headlined "Keep Rising Prices in Perspective."

"Media reports," the sheet said, "can be intimidating. Don't let the sticker prices scare you." Damn lyin' media.

"There's no escaping the fact that college costs are rising," the sheet acknowledged, though I knew that if there were a way of escaping the fact, the College Board would have found it.

"But there is good news," it continued. "There is more than $143 billion in financial aid available." (That number--$143 billion, the pot of gold--was repeated frequently, endlessly, in the documents. The chart that followed showed two columns. On the left was the bad news. On the right was the good news, offered as refutation of the bad, in a box labeled "But did you know that..."

So in the left-hand column we saw that last year tuition rose by 5.9 percent at private schools and 6.4 percent at public schools. "But did you know that..." 56 percent of students enrolled at four-year colleges attend institutions that charge tuition and fees of less than $9,000 per year." Good for them. And the other 44 percent?

On the left, the bad news: "The average surcharge for out-of-state students at public institutions is $10,867."

Then the good: "But did you know that...About two-thirds of all full-time undergraduates students receive grant aid."

On the left: "Students will pay on average from $381 to $408 more than last year on room and board."

"But did you know that...More than $143 billion in financial aid is available to students and their families.

Actually, we did know that, since it had already been printed right there at the top of the page. The rebuttals weren't very effective, if you thought things through. It was small comfort to know that this problem of rising costs was solvable, but only so long as the family agreed to go deeper in debt or accept repeated handouts. Maybe it's good news that $143 billion was available for aid. But isn't it bad news we need the $143 billion in the first place?

"Consider college an investment," the information sheet concluded, its manner calm and reassuring. Then this College Board charticle quoted a study from the College Board that said people who earned a degree from a college, schools such as those that make up the College Board, earn 60 percent more than workers with only a high school degree--adding up to $800,000 over a lifetime.

"Whatever sacrifices you and your child make for his or her college education in the short term are more than repaid in the long term."

I'd noticed something interesting about these communications from the higher-ed establishment. The only time they spoke of higher education in business terms, weighing costs and benefits, was in the middle of a come-on to parents and students, most of whom were presumably comfortable with seeing life in terms of commercial transactions. Otherwise the literature treated higher ed as a spiritual realm, filled with mystery and magic, immune from the worldly pressures of costs and benefits."

The cultlike disingenuousness of it was galling. Much of the stuff I'd accumulated from the College Board was thinly disguised propaganda of this kind--prettied up in numbers, but just as self-serving as anything you'd expect from a business lobby.

"Don't let the sticker price scare you," the next sheet said, ramming the message home. "Financial aid often makes up the difference between what you can afford to pay and what college costs." And just so you don't forget: "Education loans are also an appropriate way for families to pay for college."

more t/k

'10 Reasons to Skip the Expensive Colleges'

On the heels of CassyT's post on America's Ten Most Expensive Colleges, here are some ideas on why you might want to avoid them.

'10 Reasons to Skip the Expensive Colleges'

America's Ten Most Expensive Colleges

America's Ten Most Expensive Colleges—And How Much Financial Aid They Provide
Via Good Education.

My husband is a 1985 graduate of #6 - Claremont McKenna,  where the average student currently pays $20,423 of the $55,865 sticker price.

public sector unions & higher education in California

Daniel DiSalvo's The Trouble with Public Sector Unions describes a phenomenon we've seen here in Irvington, which is our unions (we have 3) pressing not just for higher pay and benefits but for a higher absolute number of employees as well -- and this as enrollment is declining.

Fewer students, higher pay, more employees. That is the formula. Per pupil spending currently stands at roughly $30K, and negotiations have been at impasse since last school year. So, under the Triborough Amendment, the district must continue to award raises that were negotiated during boom times.

Here's DiSalvo:

[A]s economist Richard Freeman has written, "public sector unions can be viewed as using their political power to raise demand for public services, as well as using their bargaining power to fight for higher wages."

[snip]

For a case study in how public-sector unions manipulate both supply and demand, consider the example of the California Correctional Peace Officers Association. Throughout the 1980s and '90s, the CCPOA lobbied the state government to increase California's prison facilities — since more prisons would obviously mean more jobs for corrections officers. And between 1980 and 2000, the Golden State constructed 22 new prisons for adults (before 1980, California had only 12 such facilities). The CCPOA also pushed for the 1994 "three strikes" sentencing law, which imposed stiff penalties on repeat offenders. The prison population exploded — and, as intended, the new prisoners required more guards. The CCPOA has been no less successful in increasing members' compensation: In 2006, the average union member made $70,000 a year, and more than $100,000 with overtime. Corrections officers can also retire with 90% of their salaries as early as age 50. Today, an amazing 11% of the state budget — more than what is spent on higher education — goes to the penal system.

In 2009, the New York Times reported on cuts to the UC system:

As the University of California struggles to absorb its sharpest drop in state financing since the Great Depression, every professor, administrator and clerical worker has been put on furlough amounting to an average pay cut of 8 percent.

[snip]

And on Thursday, to top it all off, the Board of Regents voted to increase undergraduate fees — the equivalent of tuition — by 32 percent next fall, to more than $10,000. The university will cost about three times as much as it did a decade ago, and what was once an educational bargain will be one of the nation’s higher-priced public universities.

A Crown Jewel of Education Struggles with Cuts
By TAMAR LEWIN
Published: November 19, 2009

college tuition

my money blog

[T]uition has been been increasing annually (7.88%) at more than three times the rate of inflation (2.37%) since 1978.

 Carpe Diem


You can't attribute the fantastic increase in college tuition to special education.

Or to unions, for that matter.


This has got to be a big part of it:

The Bankruptcy Abuse Prevention and Consumer Protection Act was enacted in 2005 to include private student loans as one of the 10 debts that can't be forgiven.

Robert Siegel talks with Stephen Burd, senior research fellow in the Education Policy Program at the New America Foundation, who says federal loans had long been included in this list, but private loans were included in 2005 because lenders had been reluctant to take on the risk of student loans.

Now that lenders have no risk, Burd says, student loans have become a very lucrative business.

2005 Law Made Student Loans More Lucrative