WHY COLLEGE COSTS SO MUCH by Dodge Johnson, Educational Consultant
from his Philadelphia Inquirer Column "Countdown to College"
The high cost of college seems to be an issue whose time has come. And it's no surprise that colleges are the whipping boys, since they are the most obvious targets and easiest to blame.
In the '80's and '90s we saw it in editorials on the Justice Department's probe of possible price-fixing. Editors called colleges "cynical" and "greedy" – not necessarily because they thought colleges were guilty but because they are expensive.
We saw it when the Education Secretary, who could have been telling the Justice Department what financial information colleges share and why, refused to get involved – perhaps because it's a touchy issue, or perhaps because the real message is that the administration wanted colleges to charge less.
And we see it now when legislatures want to punish colleges that increase tuition more than the cost of living – without regard to what students won't get for their money without additional revenue.
Why, in fact, does college cost so much? And here I mean primarily private colleges. I doubt public colleges can buy quality any cheaper, but since they're heavily subsidized families don't feel the brunt of the cost.
Answers aren't simple. Neither are remedies.
In defending themselves, colleges naturally emphasize expenses which most affect educational quality – beefing up faculty salaries, the staggering cost of putting books and periodicals on library shelves, the price of sophisticated equipment for teaching good science. Most of us accept that these are essentials.
Some expenses are legacies. In the 60s, colleges responded to public demand for expansion by building heavily. Those structures are wearing out and must be overhauled or replaced. We can argue that colleges should have put money aside – but not without asking if we would gladly have paid more then so colleges would have more cash now.
Some are responses to public policy. Most colleges want to make education possible for qualified students who can't pay. They also want to increase diversity, which for the most part means subsidizing more students.
But this is really cost shifting and not cost increases. As government cuts financial aid, colleges must either abandon these goals or pass the costs on to families. Other things being equal, the more expensive the college, the bigger the burden, and hence the greater pressure to raise prices. If colleges stopped contributing to financial aid from operating funds, many could reduce tuition 15-20% or more. Do we want to limit access only to those who can somehow find the money?
Competition for students also fuels increases. Thirty years ago, marketing colleges was considered shady – rather like marketing churches. But today, colleges are deep into branding, slick publications, videos, and websites. They routinely spend upwards of $1500 for each new student they enroll and $4000 is not unheard of.
And if recruitment includes "merit" scholarships to buy students a college needs or wants, costs can go through the roof. These discounts routinely return 35% of revenue to families who don't qualify for financial aid and at some colleges that figure exceeds 50%.
Families also push up costs. Colleges have learned that they are no longer expected simply to educate. And if parents wonder why prices have shot up since they were students, much of the answer lies in demands for greater luxury and a broader range of services.
Of the nearly 225 colleges I've visited in the past five years, hardly one isn't building something. First it was sports palaces to replace the gym, then posher libraries. More recently it was opulent student activities buildings, performing arts centers, and dorms with private baths. Now we're back to gyms again.
All are wonderful additions, but they're also costly. Yet colleges know if they don't have the generous – even lavish – amenities other colleges do, prospective students will shrug and pass them by.
Colleges now do many things they didn't used to – or at least did on a smaller scale. There are centers for nearly everything from advising to career planning, from study skills to counseling. The past thirty years has brought huge growth in staffs to advise and to plan activities.
My point isn't that colleges should not have these things – every addition happened because someone saw a need. The point is that they add to costs.
What can colleges do? It's true they hate to cut. They are labor intensive, and there is little hope that technology will make them more efficient. It's also true that many programs are not cost effective. But no respectable college will abandon, say, physics because of small enrollments.
In fact, the remedy lies more with consumers than with colleges. What impetus does a university with ten applicants for every space have to cut expenses? And if it did, would all those people still want to come?
People don't get angry about the cost of beach-front property, Porsches, vintage burgundies, sable coats or first-class passage on cruise ships. So why do they get furious if some colleges cost $40,000+ a year?
The reason is simple and obvious. Too many people adopt prestige – not quality and not price – as the coin that counts in a college search. They take quality on trust and a good match for granted. They want a 'name' that gets oohs and ahhs. They want to tell themselves they've arrived. And if the dollar price is higher than they care to pay, they get mad – even though by and large the most prestigious colleges have generous financial aid for any student poor enough to qualify. It's almost as if they think a pricey college ought to be a birthright.
Ultimately, high priced colleges cost so much because we want them to. It's a fact that some colleges have increased both selectivity and prestige simply by pricing themselves with colleges they most want to be compared with.
For those who think there are other measures, there are fine colleges offering first-rate education to promising students who will graduate with excellent prospects – all at reasonable cost. Finding them means knowing what you want from a college, not confusing prestige or price with quality and your own needs – and doing the necessary legwork to track them down.
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