This is an interesting NPR Planet Money podcast where they try to break down why Duke's tuition costs $60,000/yr (and Duke claims that the actual cost of a student is really $90,000/yr).
One of the most interesting points is that colleges are in a unique inverted position when it comes to price vs. demand. Cutting their tuition price would actually decrease the perceived value of the degree, and thus lower the demand for their product.
You can grind your teeth at the rest of the podcast where the administrators claim a lot of this cost is building amenities and facilities that students now expect out of a high-tier college like all-single dorms, a myriad of cafeteria options, and 24/7/365 library and IT staffing. I'll go back to my lawnchair now.
> You can grind your teeth at the rest of the podcast where the administrators claim a lot of this cost is building amenities and facilities that students now expect out of a high-tier college like all-single dorms, a myriad of cafeteria options, and 24/7/365 library and IT staffing.
I've seen a fair number of universities in the U.S. and other similarly developed countries, and one of the most striking differences I've noticed is that U.S. university physical plants tend to be really nice — super well-maintained and frequently renovated, "deluxe" feeling — whereas even top-tier universities in other countries often feel a bit threadworn and sometimes even kind of run-down, even if they have beautiful old buildings. The latter function perfectly well as universities, mind you, but the impression is that they're being pretty careful with their maintenance budget....
> Cutting their tuition price would actually decrease the perceived value of the degree, and thus lower the demand for their product.
Even if you accept this as true (which is interesting but is also a bit of a stretch), it certainly doesn't explain why tuition consistently rises at a rate several times that of inflation. The latter items certainly do.
Customers (students) have been allowed easy access to student loans, which makes them less picky about price differentials and closes the loop. Closing the loop allows it to accelerate beyond the scope of inflation.
http://www.npr.org/blogs/money/2014/02/26/283018555/episode-...
One of the most interesting points is that colleges are in a unique inverted position when it comes to price vs. demand. Cutting their tuition price would actually decrease the perceived value of the degree, and thus lower the demand for their product.
You can grind your teeth at the rest of the podcast where the administrators claim a lot of this cost is building amenities and facilities that students now expect out of a high-tier college like all-single dorms, a myriad of cafeteria options, and 24/7/365 library and IT staffing. I'll go back to my lawnchair now.