Because the US government will loan people very large sums to attend, which allows the universities to raise prices at will. The buyers are price-inelastic, which means that they want to go regardless of price, because they are surrounded by people that tell them that going to college is the right thing to do - and the more prestigious the better.
College in the US would be a lot cheaper if the government didn't inflate it. If you go back in time just a few decades, this is how it was: you paid for it, either in cash or with a PRIVATE loan, and people didn't see college as an automatic requirement. Then it was 1/10th as expensive.
It isn't solely the government's fault. Most American universities are corporatized and exist primarily as money printers for the admin staff. The purpose of an adjunct professor is to cost the institution as little as possible while passing as many marginal students as possible so they can maximize profits with sheep that keep coming back to the trough.
This only works if students have the money though - which the government helpfully provides. The Universities are just milking the system - which isn't their fault - it's ours as the voters.
European colleges are incredibly thrifty, though. German universities for example can lack dorms, student unions, and professors lack TAs to grade homework (so homework isn't graded) and your entire grade depends on one final.
We could do this in the USA also, or perhaps even bother with online universities, except those are generally considered not very useful as degrees.
I can't agree with your experience regarding German universities. Usually dorms are offered by the university but students usually just rent a room in the city.
I've had to submit weekly sheets that were graded in almost all courses and these qualify for the final exam (in STEM). There were two exercise groups with competent ta to ask questions..
What's missing is some kind of Disneyland experience, student unions also exist to some degree but it's more low key.
Not saying that German university is better or worse - I'm convinced it has it's own problems that only will get worse if nothing is changing but it's not like it's subpar and you are alone with your book.
That varies a lot between countries in EU. I live in Finland and my country has student unions, and professors are quite free to choose how they do the grading, so it's not always just one final exam per course. There are no dorms, but there is cheaper only-for-student housing. There are also really cheap state-subsidized meals in student restaurants on campus.
the real issue in american universities is that the tuition largely goes to paying for administrators. they do no teaching and largly dont' add much value to the experience. if we capped administratiors to 1 per 5 professors, that would go a ong way towards paying for tutors and services that actually do help students.
You have the causation backwards, I think. Or maybe we agree.
These administrators exist due to the influx of government money. As long as there is available money, the administration has every incentive to grow, and does. It's really very much like the government itself.
IOW - It's not that a larger administration causes costs and prices to go up - it's that more money coming in leads to a larger administration.
It's very much like the cost-plus model in the defense department as well: If I'm allowed to make more money when my costs are higher, then I will ensure that my costs continue to go up.
This is a common myth. This might explain why Harvard or MIT tuition is high but not the average college. Tuition mostly reflects staff costs and those have been going up due to Baumol's cost disease. Dentists, along with many other industries with its main cost being highly educated staff that haven't managed to scale production like online brokerages, have had a similar price increase since 1970.
You’re going to have to qualify where you are talking about. Where I am, California, that only describes community colleges. Even state and especially UC have “invested” significantly in infrastructure improvements paid for with loans backed by expectations of tuition income, which has had an absurd effect on growing tuition far outside of inflation. Very little of your tuition at these schools goes towards teaching salaries.
> Even state and especially UC have “invested” significantly in infrastructure improvements paid for with loans backed by expectations of tuition income, which has had an absurd effect on growing tuition far outside of inflation.
What timeframe are you looking at?
Back in 2011, registration fees at UC Berkeley were $7,230 per semester, with $813 allotted to health insurance (which could be waived if you provided proof of existing insurance from your family), so $6,417 ignoring health insurance. Meanwhile, last year, registration fees were an eye-popping $9,847 for new students, but cost of health insurance grew much faster to $1,929 ($7,918 ignoring health insurance). This is about a 23% increase, compared to CPI-measured inflation of about 35% between Sep 2011 and Sep 2023.
(The next biggest driver of the overall increase was the campus fee, which went from $253 to $820.)
Or, if you look at just tuition alone, that went from $5610 to $6261, or just barely above 10%.
I don't disagree, but they support my point that tuition has not changed meaningfully in the past decade (and then some), which is why I asked what timeframe you were looking at.
Inflation is perhaps not a good point of reference anyways, since in 2009, inflation per CPI was actually slightly negative. Cost of borrowing is not the same as cost of goods and services or cost of labor, for reasons such as the ones you point out (changes to banking regulations, increased risk aversion, etc).
Although, I'm a little surprised that cost of borrowing would have been much higher, seeing as that was the start of the zero interest-rate policy in the US. The average 30-year fixed mortgage rate was hovering around 6-7% pre-crisis and 4-5% in the years immediately following it.
Perhaps some more generous explanations for the rapid tuition growth between 2000 and 2010:
- UC Merced was established in 2005, so I buy the argument on that point regarding investment in infrastructure.
- In 2009, the state's general funds accounted for $2.6 billion, compared to just under $3 billion in 2006. Student fees in that timeframe rose from $1.55 billion to $2 billion, tracking fairly closely with the corresponding shortfall in state funding. [0, 1] Yes, these numbers are also cherrypicked as a representative budget right before the GFC and shortly after, but they represent neither peak funding nor the overall sharpness of the budget cuts. So, I reject the claim that the tuition hikes in the aftermath of the GFC was due to increased borrowing costs for the UC system. I think a more mundane explanation is that the state had a budgetary shortfall due to less taxes being collected (income, property), and made cuts across the board; the UC system raised student fees to compensate.
https://thebottomline.as.ucsb.edu/2017/10/a-brief-history-of... provides an overview of how tuition at UCs evolved up through 2017, although it gets the state funding amounts off by 3 orders of magnitude (since the linked governor's budget is measured in thousands of dollars).
> If you go back in time just a few decades, this is how it was: you paid for it, either in cash or with a PRIVATE loan, and people didn't see college as an automatic requirement. Then it was 1/10th as expensive.
...if you go back in time a few decades basically everything was about 1/10th as expensive.
> and people didn't see college as an automatic requirement
This here is where the money is... college degrees are a very effective dull-weeder for job applications. It filters out people of lower social classes (because they cannot afford college or effects of their social status like having to work jobs next to school to help their family make rent prevent them from getting good enough grades), it filters out people with unmanaged mental health issues, it filters out young parents (good luck managing to get a degree parallel to raising a child), it filters out people with disabilities... and all of that without violating a single anti-discrimination law.
College in the US would be a lot cheaper if the government didn't inflate it. If you go back in time just a few decades, this is how it was: you paid for it, either in cash or with a PRIVATE loan, and people didn't see college as an automatic requirement. Then it was 1/10th as expensive.