The "real reason" college tuition costs so much

In higher education, there many be no other refrain spoken more often than the costs of tuition raising at a pace that far exceeds inflation (or any other good and service). Two articles in the New York Times in the past few months have attempted to explain why tuition is so high and has increased so much. The earlier published article appears to be a couple page ad for a forthcoming book about the future of education and the author's assumption that it will be revolutionized by on-line education. Of the many problems in higher education he identifies, the one discussed at present is the profile and rankings arms race that he sees national and regional research institutions chasing. The article can be summarized by a quote from Mr. Trachtenberg, the former president of George Washington University, the case study of little brother universities trying to punch above their weight by raising their costs so they can spend that money on the "wrong" things:

"College is like vodka, he liked to explain. Vodka is by definition a flavorless beverage. It all tastes the same. But people will spend $30 for a bottle of Absolut because of the brand. A Timex watch costs $20, a Rolex $10,000. They both tell the same time."

With this metaphor and case study in George Washington University, the author describes the amenities arms race taking place at universities across the US. Under the assumption that more (or higher priced) means better, the author suggests that the price of tuition is increasing because it can. Without the higher price, universities lose out on the lazy rivers and luxurious apartment-style dorms that all of the other universities are investing in. So in this author's view, the high and increasing price of tuition is due to the misguided, endless search and battle for supremacy in research prestige, branding and self-aggrandizement.

In the second article, the real reason why tuition costs so much,  the author names two different reasons for the increasing cost of tuition, the increasing number of students attending universities (requiring more services, facilities, etc.) and the increasing number of university administrators. Surprisingly, the author vehemently denies the most commonly cited cause of raising tuition costs, decreases in state and federal funding. He states that higher education's federal budget is 10 times higher than the 1960s and state appropriates are 4 times higher than the 1960s. Almost everywhere else I looked I couldn't find data supporting the idea that funding hasn't decreased (this was a very difficult search to do given the motivations on both sides of the argument). In 1960, 2.9 million students were enrolled in colleges and universities while in 2014, 7.24 times that many were enrolled. This piece from the Chronicle does a great job summarizing state funding trends with their findings pointing to decreases in funds.

Combining the suggestions from the two articles and reanalyzing one of their points I think we find the reasons why tuition is increasing. There has been an explosion in the number of students attending college, paired with increased government oversight and an increase in the number of services that colleges provide causing an increase in the number of staff to oversee/audit those new services all while the schools receive less funding from the public (federal and state).

One thing that seems to be rarely discussed when pointing out the college tuition is skyrocketing is that college today is much different from the 1960s or some other time period that is pointed to for lower tuition costs. Technological advances has created the need for revolutionized infrastructure in order to support computer and internet abilities (that also comes along with specialized staff to make sure those services are provided safely and timely). Other support services have been created and expanded including alumni/career services and student support services that help students find employment, health services or extracurricular activities. Again, to beat an old drum, college is more than sitting in a lecture and taking a multiple choice exam (or watching a video on-line, writing in a forum and taking tests). If we envision college this way, then it also makes sense to extend it to all aspects of the college experience. Dorm rooms should be 9X7 concrete blocks, the cafeteria should serve gruel and there should be no extracurricular opportunities because all of the students' time outside of the classroom should be spent working and preparing for class.

Colleges are meant to provide for the public good and includes more than just the time students spend in the classroom. In short, the public good provided by colleges/universities include: collaborative relationships with the community, service to the community, supporting diversity, improving quality of life, providing economic benefits, training a workforce, regulating social change, transmitting culture, creating knowledge, disseminating knowledge, providing critical reflection, promoting diversity of thought, increasing problem solving abilities, promoting democratic citizenship, civic participation, and social responsibility. Practically these public goods are reflected in increased engagement by college graduates including more volunteer work and participation in elections. College graduates are also more likely to make more money thus increasing their contribution to tax revenues while also using less social services. So while we watch public funds drain away from colleges and universities, at what point does the public good become a private good?