The Chronicle of Higher Education reports* that $50,000 is quickly becoming the typical cost for a year at one of the nation's elite colleges:
Fifty-eight private colleges now charge at least that much for tuition, fees, room, and board, a Chronicle analysis of College Board data shows. Last year only five colleges did.
Talk about sticker shock. Could it be time for Kenneth Feinberg to decide how much colleges are allowed to charge?
Members of what the Chronicle dubs the "$50K Club" include Sarah Lawrence ($55,788), Georgetown ($52,161), NYU ($51,993), Johns Hopkins ($51,690), Columbia ($51,544), Wesleyan ($51,432), Washington University in St. Louis ($51,329), Bates ($51,300), Vanderbilt ($51,228), Tufts ($51,088), University of Chicago ($51,078), Claremont McKenna ($51,035) and the University of Southern California ($50,732). Some universities you might expect to make the list"”Harvard, Princeton, Stanford"”don't.
Now, there are some caveats, including the fact that sticker price can be quite different from what a family winds up paying:
Many students receive need-based grants"”often from the colleges themselves"”or merit-based scholarships and other discounts... The Chronicle analyzed College Board data to calculate the average grant offered in 2008-9 by 42 colleges whose list price for tuition, fees, room, and board was more than $50,000 this year... Among the 42, the average grant per full-time student was just over $13,000. That means that the average bill last year for tuition, fees, room, and board, after grants, was about $36,000.
Although if what colleges are doing is jacking up the price and then jacking it back down for families who can't afford it, what we're left with is a tax on the rich"”or on people who scrimped and saved every penny for 18 years in order to be prepared for this day. You decide if that's something you want colleges to do.
And even at $36,000, we're still talking major money. I could get into some fancy calculations about how the cost of a top-tier college has risen faster than costs in general, but it's more fun to share a rule of thumb that was used by people setting tuition before the 1980s: a year of private education should cost about the same as a new Chevrolet. Today, a year of college costs about the same as two or three Chevrolets.
What's behind the drastic change? It would be neat and clean to say supply and demand. After all, more and more high-school graduates go to college, and plenty has been written about the escalation in competition for slots at the most-elite universities, which aren't increasing as fast as the number of people wanting them.
But here's another idea: what if college costs more because students get more?
That's what education economist Caroline Hoxby finds to be the case in a paper in the Journal of Economic Perspectives. Jumping to the punchline:
Over the 1967 to 2007 period, the average annual growth rate of tuition paid was 6 percent at the most selective colleges, but the growth rate in their resources was 13 percent and the growth rate in their subsidies was 25 percent!
Those growing resources include instruction, student services, academic and institutional support, and "operation and maintenance of plant." Subsidies are simply the difference between money spent on students and the tuition they pay.
In other words, once you take into account what you get for your money, college is actually a better deal than it used to be. Ready to sign that $50,000 check now?
Okay, maybe not. Because whether or not you want everything you're paying for is a different question. State-of-the art classrooms and more professors for each student sound great"”but are you interested in tossing in another $10K to pay to build luxury dorms and Olympic-quality athletic facilities? For $50,000, you get a whole lot more than an education.
Barbara!
*The Chronicle of Higher Education has managed to keep its pay-for-content model on the Web. Good for the future of quality journalism; bad for people who want to see the whole story without ponying up for a subscription. To look at a free copy, I suggest paying $50,000 to enroll in an elite university, which will almost surely have a copy in its library.
I agree. Most of what you get is totally unnecessary. How has the earnings differential between college and high school grads changed over the years?
There's another point, made by someone whose name I would look up if it didn't make it more difficult to steal their idea for a vague amount of personal credit:
$50,000 pays for quite a few trendy new facilities, including the dorm rooms and athletic facilities you mention. And you could argue that, for students on the cutting edge of the sciences, having access to the highest quality of instruments and a professor on the Nobel fast track has serious career implications.
But for the rest of the students (which covers a lot of ground) the content of college classes is becoming increasingly commoditized. You can record it, web stream it, deliver the materials electronically and administer testing to remote desktops. The physical component of college, which demands the largest share of resources, is actually becoming pretty irrelevant.
You see that in the growth of online-only institutions. The only thing holding back the University of Pheonix types is prestige. Your banking that employers and graduate programs will recognize the name. That's what you're buying with 50k - a fast track for a job interview and a line-item on your resume.
@strawmn: Good point. Though I don't know if the *only* thing holding back the University of Phoenix types is prestige. A big part of what you get from a university is a particular social and professional network. Even if you wind up getting an education that everyone knows is equivalent, you still might not get that call from your freshman-year roommate when he hears about a great job that you should apply for.
@dotybj: There's data on this in economist Richard Vedder's book, Going Broke by Degree: Why College Costs Too Much. In 1970, the earnings differential was 39%; in 2002, it was 75% (those figures are for male workers; the change is less drastic among women). One important caveat: in 1980, the differential was 24%. So it can move both up and down.
@Barbara: I'd thought about professional networks originally, but had decided my post was long-winded enough. Although I do to hear myself talk . . .
My gut instinct has always been that the value of networking decreases markedly the further you move away from the elite. For students pursuing graduate degrees in top programs, professionals looking to work at exclusive institutions, or people trying to find a career in academia, networks are absolutely key. Patronage can often be the ONLY differential between elite success and mediocrity.
But we aren't talking about how to help the smartest and richest among us. Their resources are, it's safe to say, already significant. But if you're trying to make college affordable to the great mass behind the elite, than I think affordability is a thousand times more important than professional contacts.
A peculiar demographic may be emerging at the elite schools: The rich who can afford it, the poor who receive charitable scholarships, the brilliant and the athletic.
If this omits the average, middle-class kid, what are the Darwinian implications?
Rodger Malcolm Mitchell
The rich shouldn't be there unless they qualify. The same goes for the poor. The athletic in particular. And as to the last group, the AVERAGE middle-class kid, he shouldn't be there either! Let us not forget something which has been twisted then swept under the rug: colleges/universities were Institutions of HIGHER LEARNING. That's right. Higher learning. Not remedial (for the poor who somehow has excuses); not for the rich (who can be as dumb as rocks but who are well-connected); not the idiot jock who can throw a perfect spiral but somehow cannot get a lousy 700 on an SAT! Nor is it for the AVERAGE anybody. Colleges are supposed to be this country's think tanks. Average does not cut it. We have dumbed down the notion of college so that everbody is included & nobody is offended. Then we have adjusted the curriculum & majors to guarantee that. Hell, it won't matter anyhow. Few will get jobs cuz of outsourcing or "insourcing" with the flood of foreigners.
College only for the chosen few, with the rest doing manual labor? Heaven help us.
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