How Did College Education Become So Ridiculously Expensive?
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When the public universities increased their tuition, the elite private universities took notice. Anxious to maintain their higher status and simultaneously bring in more revenue, they raised their tuition as well, setting off an escalating spiral. The result is visible today in the eye-popping tuition rates that now confront students at private colleges and universities. At my old school, the University of Chicago, entering students in 2013 paid $44,574 for tuition and fees. Room, board and books required another $14,446.The escalation of these costs is certain to continue. The big name private schools turn away 75% or more of their applicants. They have no reason to lower tuition and every reason to continue raising it.
In the three decades between 1980 and 2010, the United States underwent a sea change in how it finances higher education. The Consumer Price Index over that period roughly doubled, meaning that most things cost about twice what they did 30 years earlier. Many are aware that over the same period the cost of health care did not just double but increased six times over what it had been. Few Americans, however, realize that during that same period the cost of college tuition went up twice as fast as the cost of health care. Add the disappearance of part-time and temporary summer jobs for college students and the implications for higher education are clear: in three decades the cost of college rose from relatively accessible to shockingly unaffordable.
Those three decades also witnessed radically widening disparities between working and middle-class families on the one hand and wealthy families on the other. The Economic Policy Institute found that between 1978 and 2011, roughly the same three decades, average CEO salaries increased by 725%. Workers’ salaries over the same period increased less than 6%. Taking a longer view, they showed that in 1960 the top 1% of income earners in the U.S. collectively made 8.4% of the total income generated in the country. Fifty years later, in 2010, the top 1% had doubled their take to 17.4% of total income.
As the purchasing power of working and middle class families declined, college was seen as ever more necessary in the desperate struggle for financial success. But rapidly rising tuition made college less and less affordable. Trapped between their perceived need for an education and their lack of resources with which to pay for it, many families had no choice but to seek larger and larger student loans.