College costs are actually going down

[Koolau]

College have seen no improvements in productivity for the past half century, have added layers of additional cost, and also have added functions and extracurricular activities that are not academic. Alex Tabarrok of George Mason University has written extensively on this, here are a few of his blog posts at Marginal Revolution. It’s a bit wonky.

He attributes this to “Baumol cost disease”. Wages of professionals at the colleges have risen even though there has been no improvement in productivity because competitive professions, such as doctors and lawyers, have enjoyed increases in the price of labor.

In other words, college cost of labor rises because it can, and that flows immediately to the overall cost.

IOW all those things the gummint did to insure that everyone (almost) can go to college, actually went to more layering of administration (and building edifices to former faculty.)

You can't fool mother nature. Supply and demand is a law for a reason. It's a natural law - not man made. Dump a bunch of money into universities (and call it loans and aid to students) and what happens? Universities spend it on what THEY want - not on what their customers need. I contend without any proof that university educations would cost half what they do now if the gummint had stayed out of it. It's probably true that a "few" fewer students would have been able to attend. But just a few. And I contend - again without proof - the students who were "shut out" simply gave up on trying to find a way to a higher education. It's out there. For some, it's a real learning-experience of head-banging-the-wall, but it was always possible for those with decent grades and a lot of drive. One thing for certain, folks that had to really w*rk hard for their education appreciate it. BUT YMMV.

 

[MichaelB]

And the ones I'm familiar with have gone on building sprees for the last few decades. Showy new buildings that are often only peripherally related to the teaching or research mission. That adds up in a hurry.

Very good point. It brings to mind our property tax when we lived in NY. They billed property tax for schools separately, and by law were required to submit for yearly voting a “do nothing” budget alternative. Our “do nothing” option still had 17% year over year growth, caused by 2 factors. One was pension contribution for teachers, the second new buildings costs. The expansion projects were all approved with matching state and federal funds for the first few years, and when the subsidy went away the following decade saw hefty yearly increases in school budget, even when no staff was added.

 

[all4j]

I only skimmed the article but I think it might be more accurate to say there is a shift beginning in who pays for college. I hear some smaller private schools & some public want more taxpayer dollars. Then there is the whole student loan thing. I got the impression the article was pushing an agenda more than providing data...maybe just me.

 

[Koolau]

<SNIP>

The expansion projects were all approved with matching state and federal funds for the first few years, and when the subsidy went away the following decade saw hefty yearly increases in school budget, even when no staff was added.

Yep. Nothing is more expensive than free Federal money. We're still trying to get our promised "free" Billion from the Feds for the construction of our Light Rail (that, so far has cost us well over 10 Billion - headed for 15 Billion before it's over.)

So to get a Fed input of a Billion, each and every citizen of the State (man, woman, child) will be on the hook for 10,000. But, by George, we'll get that free Fed money - one of these days. But I'm not bitter.