College is expensive. Like, really expensive! Especially here – in the United States of guns, fast food, (coughs Trump), and student debt. But it wasn’t always like this.
In 1980, the average cost of tuition for a year at a 4-year private college was $3,500. Adjusted for inflation, that’s $10,200. And today, that price has gone to $32,000 – three times as much in only 36 years. WHY?
Well, that’s both a complicated and controversial question.
To understand why college has risen in cost, we first have to understand why college has always been expensive. The biggest fraction of your tuition goes to salaries. The national average student to faculty ratio is 18 to 1, meaning that for every 18 students there’s one faculty member. The average professor at a private college makes $126,981 per year. Divided by 18, that comes out to only $7,054, which doesn’t seem that bad but you have to consider that there’s more than just faculty. There’s also coaches, gardeners, kitchen staff, dorm staff, maintenance people, admission staff, marketers, IT staff, security guards, and college presidents. Altogether, the salaries and benefits of all these individuals add up to a whopping $24,000 of our $32,000 tuition.
Salaries tend to be high because college functions similarly to many other industries – following the rules of supply and demand. The most popular college majors vary over time because interests change to reflect changes in culture. The problem is you can’t just magically create new professors. By the time new professors go through their 20 years of education and specialization in a field, the major will no longer be the popular one so when a major is popular, colleges have to compete to get professors and the only thing that really matters is money – money brings more professors, more professors bring more students, and more students bring more money.
At the same time, professors in historically popular majors receive tenure. Teure is the idea that in order to promote academic freedom, long-term professors should have their job guaranteed until retirement. With professors that legally cannot be let go, there can often be an abundance of professors in less popular study areas.
So, we still have $8,000 of tuition unaccounted for. Colleges need places to teach and their infrastructure is rather unnaturally expensive. Classes usually only run for 8 or 10 hours a day, 5 days a week, for 40 or so weeks a year. That means that classrooms are only in use 23% of the time. The college still has to pay for the space the other 77% of the time which of course adds up.
Additionally, colleges really like to build nice buildings because these attract students. The average cost to build a building varies by location, but it averages between $155 and $215 per square foot. By contrast, U-Mass Amherst’s Commonwealth Honors College costs $354 per square foot. U-Mass Boston’s General Academic Building No.1 cost $594 per square foot, and Berkley’s Lower Sproul Building cost $659 per square foot.
Of course, there are other factors contributing to the high prices of college, but staffing and building are the big two. Now for the reason, the college has tripled in price. – it’s always been expensive to pay highly educated people to teach in inefficiently use buildings so what has changed in the last 30 years?
Well, college is more popular than ever. In the last 20 years, college enrollment has increased by 50%. Federal and state fundings for college has actually increased to an all-time high since 1980, but with the simultaneous increase in students, per-student funding has hit an all-time low.
In 1990, Ohio’s flagship public university – Ohio State University – paid for 25% of their budget with government money, while in 2012, only 7% of their budget was paid for by the state. With less federal and state money, students have to pay more out of pocket to make up the difference. Additionally, colleges have changed to appeal to the millennial generation.
According to William Strauss and Neil Howe, the millennial generation – born between 1982 and 2004 – are characterized by 7 core traits: they are sheltered, confident, team-oriented, conventional, pressured, achieving, and they feel special.
Sometimes called the ‘trophy kids’, millennials tend to be more ambitious and feel more unique than the preceding generation, which means they tend to believe more in “the right fit” idea for a college. Colleges responded to this attitude by adding more and more amenities to help them stand out to the growing number of students. All these new amenities required more management which contributed to the boom in administration at universities.
According to the US Department of Education, the number of administrator positions increased 60% between 1993 and 2009 which means it is 10 times faster than the number of tenured professor positions. Now, seeing what it takes to make a college functional, it isn’t that expensive. 80% of full-time degree-seeking students at four-year universities receive some sort of financial aid with the average grant hovering around $15,500. That’s a significant amount, but I’ve got to admit that there’s still a significant amount leftover, until you consider that going to college is the single greatest investment you can make in your life, especially today.
People who go to college earn on average 98% more per hour than those who only have a high school diploma, and that number is up from only 40% more 35 years ago. So, given that, what’s the true cost of college? When you look at it holistically, over your whole life, the cost of going to college is not $32,000 a year or $128,000 over four years, but rather negative $500,000. By skipping the opportunity to go to college, you will forfeit on average half a million dollars in potential earning.
Go to college, kids!