Flogging a Dead Horse: College Tuitions Still Out of Control

At the risk of repeating myself, let me repeat myself… College tuitions are out of control. Attending a four-year public college or university in Virginia this year will set you back about $452 more in tuition and mandatory fees on average than last year, according to new figures released by the State Council on Higher Education in Virginia.

The jump in tuition and mandatory fees is equivalent to an increase of 6.8 percent, reports Gary Robertson with the Times-Dispatch. That represented a moderation from the previous year’s 9.2 percent hike, but it still beats the 2.7-percent inflation rate by more than 4.0 percentage points.

How much is enough? At what point will Virginia’s colleges and universities acknowledge that they’ve made up for financial hardships imposed upon them years ago by the General Assembly and start restraining their tuition increases? At what point will the dramatic productivity gains of the profit-driven private sector — yes, even in the labor-intensive services sector — be seen in the not-for-profit, academic sector? Universities are loaded to the gills with really smart people, right? Virginia has some of the best business schools in the country, right? Why can’t they figure out how to bolster productivity and restrain tuition charges?

(Obligatory disclaimer: Yes, I know Virginia’s public colleges provide more educational bang for the buck than most of their peers. But the fact that higher education generally is totally out of control is not a sufficient excuse for Virginia instituations being only moderately out of control.)

It strikes me as no mere coincidence that the most inflation-prone sectors of the “private” economy are those that are most affected by the heavy hand of government: education, health care and housing.


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21 responses to “Flogging a Dead Horse: College Tuitions Still Out of Control”

  1. At what point do you start questioning the economic value of a college education, particularly for kids that are going into general business and not something specialized that requires intensive education (engineering, medicine, etc)?

    4 years in the work world at that age makes you maybe $100K, plus the $160K you didn’t spend on college. If you could convince an 18 year old to sock away 10% in an IRA the magic of compound interest would give them a huge head start on a comfy and fairly young retirement.

    I know the numbers used to be dramatically in favor of the earning power of a college degree, but I always felt that was somewhat skewed. People with high earning potential tend to go to college. It’s necessarily college that makes them high earners. How many of those folks would do just as well if they didn’t spend the $160K on college?

    If college costs keep on the upward trend, we may start to see more people skipping college and trying to follow their own path.

    I don’t think that would be a bad thing.

  2. Groveton Avatar

    COD

    With all due respect I believe that more Americans skipping college would be a disaster.

    The relative economic vacuum that the United States enjoyed for over 200 years ended sometime in the 1980s. Until then, there were lots of competing political and economic beliefs. And while there are still plenty of “outliers”, too many countries have finally figured out that the US had the basic political – economic equation right all along.

    After 200 years of success, they copied us – in droves.

    Their economic systems.
    Their contract law.
    Their currency policy.
    Their educational systems.
    Their embrace of private ownership.

    The United States is like the dog that finally caught the car it’s been chasing.

    Now what?

    We’ve been telling the world that they should be more like us for 200 years and, somtime in the 1980s, the world kind of said, “OK”.

    Our system is no longer unique.

    And the ability of our citizens to prosper is no longer based on their inclusion in our unique system.

    Now, it’s about execution among many roughly equivalent systems.

    And that is all about education and the right amount of governemnt influence.

    And the State of Virginia should be doing everything in its power to keep our citizens prospering by providing the tolls needed in a world where the US no longer holds the monopoly on aggressive political – economic thought.

    Yep – we caught the car all right.

  3. Larry Gross Avatar
    Larry Gross

    what is the essence of a college education?

    I have known plenty of very intelligent folks very skilled at figuring out difficult problems – that were not “college-educated”.

    On the other hand (and you guys know where I’m going on this)..

    I’ve met some “college-educated” that have to be helped to avoid being killed…. by obvious threats.

    I will admit from the get go – that a CEO and lots of folks that are at the forefront of nimble and smart companies have an education from college that did prepare them for the gladitator challenges ahead.

    But those folks are 1 in 100… the rest of those “educated”… some of them.. can’t spell or use grammar correctly and I do wonder exactly what college they went to and how in the heck they graduated if they can’t read a tech manual – much less write one…

    I’m so bad for saying this so I do apologize to anyone whose nose I have abused…

  4. Larry Gross Avatar
    Larry Gross

    oh.. yes… for the guy who manages to massacre the King’s English with almost every post in this blog, I, more than anyone else am the kettle pointing out the black… 🙂

    still I do wonder what a college edumication is… sometimes.

  5. Anonymous Avatar
    Anonymous

    “At what point do you start questioning the economic value of a college education, particularly for kids that are going into general business and not something specialized that requires intensive education (engineering, medicine, etc)?”

    I question wheather or not going to college was “really worth it” each month when I send in my studen loan payment.

    At this point, I would say that it has not really been worth it. Why?

    1)The job I have has nothing to do with the degree I received. Not uncommon, but what does that really say about the degrees offered by today’s colleges and universities?

    2) I have friends the same age as me who never went to college and are making twice as much as me. I also have friends who graduated with me and they can’t find a decent job (at least one that justifies the degree) to save their life.

    3)It’s no secret, but if you really want to “get someplace” in today’s corporate workplace a Masters Degree is almost a requirement. So what, you say? That will set you back upwards of 60K…and you will likely have to relocate to find a job that pays enough to justify the degree.

    Face it. A college is a business just like everything else.

    It is also, in many ways, a donkey/carrot scenario. I know dozens of students who are forced to switch majors 1/2 way through because they know they won’t get into the school of their choice because they don’t have the grades or brcause there is not enough room in the program they want to get into.

    Walk around Blacksburg and see if you can get a count of all the folks who wanted to be architects or engineers….do the same at Radford for the nursing school…..UVA for the business school.

    If I only knew then what I know now……

    p.s. I graduated from a Virginia University (2000)

  6. Anonymous Avatar
    Anonymous

    I don’t think that horse in the picture is dead. I think it’s sleeping. Let sleeping horses lie, the saying goes. No, dogs. Whatever.

  7. The general college degree today serves the same function as a high school degree 50 years ago. It’s the price of admission to corporate America. And no, I’m not jealous or anything like that. I have 3 degrees, and my undergraduate degrees are from a fairly prestigious university. Was I anymore prepared for the work world after college than I was before? I don’t think so. My career track has little to do with anything I studied in college or grad school.

    I think 1 million 18 year olds stating their own businesses would be far, far more valuable to America than those same 1 million 18 year olds partying their way through 4 years of college.

  8. Anonymous Avatar
    Anonymous

    Why does it have to be one or the other? I worked full time and took six years to graduate, but I earned $150k and graduated with money, property, and experience.

    Grad school was paid for by my employer. Now working on second Masters because I couldn’t see the value for the effort to get a PhD.

  9. Anonymous Avatar
    Anonymous

    So much for the thought that education is, for it’s own sake, something worthy.

    For those who reduce the value of a degree to mere earning power, well, it’s their choice. But it’s far from a complete analysis.

    One of the above posters captured it nicely when he or she said the college degree today is the equivalent of a high school diploma decades ago — public middle and high schools are now outcome-oriented, teaching to the SOLs, rather than giving kids the framework to think.

    Grad schools are the new college — giving kids the specialized training they need to compete.

    The fact is, we have a lower percentage of college-educated young people in our workforce than many of the nations against whom we compete for economic activity.

    I believe that at least part of the tuition hike mentality has to do with branding and marketing. I recently spoke with a college administrator who admitted that raising tuition, without more, increases the school’s “cool” factor. Let’s face it, in an era when kids want $100 jeans and $150 sneakers, a cheap school is just not “cool.”

    Add to that all the extras kids want — private bathrooms, A/C, wireless LAN, a Starbucks in every dorm. So much for the cheap Red, White and Blue, 7-11 Casa Bueno burritos and free Saturday football games that I expected.

    I surmise the real enemy of low tuition has more to do with competition for “prestige” rankings and wealthy potential donors than it does a hard-core education. But then, I trust that the market works, and so far, it’s moving in that direction.

  10. Groveton Avatar

    Wow!

    I am stunned by these posts. They may be right or they may be wrong but they sure are different from how I see (or ever saw) the world.

    I applied to many different colleges but knew I had to put myself through college. I considered skipping college and just “getting a job”. As usual, my old man knew what to say. He told me that I was afraid to go to college because I was afreaid that I’d fail. Other than offering to pay for college it was the best thing he could have said.

    After seeing where I got accepted and what each college cost – UVA looked real, real good. I waited on tables (any old ‘Hoos remember LaHacienda before it moved?). I mowed lawns and moved furniture for Student Services. I borrowed from VELA.

    Going to UVA was the best time of my life and the best decision I ever made. Many of my present friends are the people I met at UVA all those years ago.

    I took some classes that I hoped would be easy in Probability and Statistics. I liked them so much I took more of the math classes and actually learned math (well, at least statistics). That would never have happened if I’d have just “gotten a job”. They made me take a foreign language and I took Chinese. Chances of that happening if I’d just “gotten a job” = 0%. I took a course in finance and the rat professor who taught the class made me use something called a computer. Once I saw how fast the computer could slice through statistics problems I stopped taking finance courses and started taking computer courses.

    However, I never did have the gumption to take much in the way of English or History. Seemed like too much writing and required knowledge of both spelling and grammar. It’s a regret I still hold. I should have stayed longer instead of going off after graduation to “get a job”. There were always plenty of customers at LaHacienda after a basketball game at U Hall. The tips were there, my wisdom was not.

    However, once I did go “get a job” I sure knew a whole lot more than I did before I matriculated to Mr. Jefferson’s Academical Village (did I get the grammar right on that one Larry?).

    I think that any student who graduates from high school in Virginia should be able to work, beg or borrow their way through any public university in the state.

    If these tuition increases have put that out of reach I’ll add a point to my long list of reasons why I hate the state politicians. I’d like to say that I’ll vote for a candidate who has a plan to make state unioversities more affordable but none of the candidates in my area seem to feel that discussing their position on any issue is a prer-requisite to getting elected. Oh – except the Rail to Dulles. They all want that – buried in a tunnel. Otherwise, they say, it will make Tyson’s look like Chicago. Yeah. Like Tyson’s is a freakin’ architectural treasure that can’t be diminished by above ground rail.

    I also believe that any adult who understands the world of the future should encourage almost any child to go to college. Some college. Somewhere. As my Dad said so many years ago, “You can always drop out if you find you don’t like it or just can’t hack it”.

    Like I said so many words and aimless thoughts ago on this post – Wow!

    I am stunned.

  11. Jim Bacon Avatar
    Jim Bacon

    Anonymous 6:54, You’re right, American universities are prestige-driven institutions (as opposed to profit-driven institutions), and the drive for status overwhelms the mission to make higher education affordable. Affordability is someone else’s problem — i.e. state and federal governments. It’s their fault for not providing enough financial support.

    Groveton, You made the most of your education at UVa, as did I (though in a less lucrative field). But there are plenty of students who utterly squandered the opportunities presented them. Also, I wonder how easy it would be for a young person with your motivation and drive to work their way through UVa today, after two or three decades of tuition increases.

  12. Groveton Avatar

    Jim:

    Lots of kids did what I did back then. It was pretty common. You could borrow $2,500 a year from the Virginia Educational Loan Authority pretty much by signing a piece of paper that said you pay them back. Tuition and fees were low and living expenses were tiny.

    I hope the kids today can do the same if they want. However, tuition costs consistently rising faster than the rate of inflation kind os makes me doubt that they can.

    You want to charge me user fees? Charge me a fee every time I hire a graduate of a Virginia public university. I’d be happy to pay. especially if the fee were used to keep public university education affordable in Virginia. Sounds like a win – win – win for the employers, the state and the kids to me.

  13. Anonymous Avatar
    Anonymous

    Groveton –

    “Lots of kids did what I did back then…….”

    That was then this is now.

    If you had to finance your entire education, i.e., 4 years of undergraduate studies and 2-years in a masters program you would be in the hole $125K…and that’s if you go to a public STATE school for your first 4 years. If you go private the first 4 years you would be upwards of 200K in the hole.

    Sure, some aid is available to almost everyone but it’s not nearly enough.

    When your loans come due a 125K note @ 8% requires a minimum payment of $965 if you want to pay it off in 25 years.

    Sure, you will get a good job that pays a lot of money but in the long run but you are setting yourself up to be in debt for the better part of your life.

    Jim,

    “But there are plenty of students who utterly squandered the opportunities presented them.”

    That’s 100% true. But, there is a growing population of students….I’d say from 1990 onward that feel that if they had to do it all over again they would do it a little differently.

    In many of the high-tech degree fields (computer science, architecture, engineering, medical, etc.) American students are competing against students from India, China, The Middle East, etc. for a limited number of spots.

    How is that fair?

    Finally, the comment about branding and marketing is spot on. It’s all about image, at least on the outside.

    Who do you think the highest paid people on a college campus are these days? In most cases it’s the Football coach and the Men’s Basketball coach……see you at the Sugar Bowl!

  14. Anonymous Avatar
    Anonymous

    “In many of the high-tech degree fields (computer science, architecture, engineering, medical, etc.) American students are competing against students from India, China, The Middle East, etc. for a limited number of spots.”

    And at least in IT/CS and engineering they are seeing the wages in these fields depressed as a result even if they are lucky enough to get a job in the first place. There was a story in the “Roanoke Times” a few months back noting that the degrees awarded in IT/CS have dropped to nearly half of what they were a while back. This can’t be good for the US, but who could blame the students?

    I couldn’t agree more that a college education is more than just job training but most people have to support themselves. Among the worst cases are students who have to pay their own way through college because their families can’t help, who take on a lot of debt, and then don’t get that degree.

    Last fall, the heating & A/C tech guy came by to check out our system. He was 23-years-old and had taken some kind of course at the community college in this sort of technology. He admitted that, in fact, he’d learned most of what he knew (and he was good) by working with the experienced guys in the company. He’d just bought his first house on a few acres in the county.

    On the other hand, I have a friend in her early 30’s who just got her MA at VT. She has thousands of dollars in student loans and will be teaching middle school in Pulaski County in a week or two. Her pre-teen daughter will be ready for college before she pays her college loans off. A house? She’s having trouble affording a car….

    Deena Flinchum

  15. Groveton Avatar

    Anon 9:22 – Quite possibly you are correct. I was about $10K in debt when I graduated in 1981. Not sure what that would equate to in today’s dollars. So, I ran a quick calculation:

    What cost $10000 in 1981 would cost $23591.49 in 2006.
    Also, if you were to buy exactly the same products in 2006 and 1981,
    they would cost you $10000 and $4238.82 respectively.

    Do you want to do another calculation?

    So, my borrowing in my day would be worth $23,591 today (using CPI, not tuition, inflation).

    I’d need to albe to raise another $100,000 or so to go to college if I can assume your college total debt is a proxy for total college costs.

    A quick look at the UVA web site showed current tuition and fees for an in-stat undergraduate student at $4254 or $8508 per year. Using a compounded tuition and fees inflation rate of 6% for the next four years provised a total tuition and fees cost for a four year undergraduate degree of $37,281.

    $125,000 – $37,281 = $87,782 for your years of non tuition and fee costs or $21,945 per year for each of those four years. Assuming that a working person would have to pay 25% average taxes, they would have to earn a salary of ($21,945 * 1.25 = $27,431 to earn the money you suggest that a student live on after tuition and fees). This seems a little “high on the hog” to me. Therefore, I am going to downgrade your estimated living expenses from $21,945 per year to $15,000 per year (cash, after taxes).

    I am also going to assume that a student can get a job making $10 / per year net of taxes. That would require the student to work 1,500 hours to pay for UVA in-state.

    Assuming that the student would work full time over 3 months of the summer, that would yield 14 weeks * 40 hours = 560 hours. The student would be 940 hours short. That would equate to working 24 hours per week during the 9 months of the school year.

    I think that’s possible but definitely pushing the envelope.

    So, I conclude from this very rough analysis that a student could borrow and work their way through UVA in today’s terms but it would be considerably more work than when I went through. I’d estimate that I worked 15 hours per week during the school year.

    Please let me know where you see miscalculations on my part.

  16. Groveton Avatar

    Ms. Flinchum:

    The implications of jobs being sent from the US overseas is a major, major issue receiving very little press coverage – in either the MSM of the “blogosphere”. I believe it is of far, far greater consequence than the debate about illegal aliens sneaking into Virginia and working as bus boys and girls in restraunts, mowing lawns or painting houses. However, the attention is all on these low pay jobs and the immigrants who take thise jobs.

    Meanwhile, high paying jobs are being sent offshore at an alarming rate. These are not only IT jobs but also work as insurance claims processors, radiologists, accountants, etc.

    This largely ignored point will be a major issue in the impending economic crisis in the US (and in Virginia).

  17. Anonymous Avatar
    Anonymous

    groveton,

    I am extremely well aware of the problems that off-shoring high paying jobs will cause the US and VA and have been for years. I am also well aware of the effects that importing cheap foreign labor into the US via H-1B and L-1 visas are having on US workers. I attribute this offshoring of jobs and importing of replacement workers to be THE major reason why fewer US students are selecting STEM majors, IT/CS being perhaps the best example simply because those jobs have been affected longer than some others. In fact I had a letter to the WSJ published back in 2005 on this subject. I considered that quite a feat since the WSJ proposes a constitutional amendments stating simply: “There shall be open borders.”

    Now there are “supposed” to be protections for US workers, such as advertising these jobs, making an honest effort to find US workers, etc. As you may have read, there was a recent stir when a sharp IT worker captured part of a law firm’s lead-in for a conference explaining how to maneuver around the H-1B visa laws in which a lawyer stated that what they were showing here was how to AVOID hiring qualified US workers. Can’t get much clearer than that.

    Remember that long before these high paying jobs were being affected, the same scenarios were been played out in manufacturing (offshoring) and everybody – including a lot of folks now alarmed that THEIR jobs can also be outsourced either to another country or to imported workers -simply said that “those people” just had to go back to school and get more education without understanding that many of “those people” may be HS drop-outs in their 50’s.

    Just as less-skilled manufacturing jobs got off-shored, many less-skilled jobs that couldn’t be exported because of the nature of the work have been “colonized” by businesses’ undercutting US workers by hiring cheap foreign labor, often illegal, while the federal government has done next to nothing to enforce the law. I don’t blame the workers, who are frequently badly exploited; I blame the businesses who hire them.

    The statement that these illegal workers are “just doing the jobs that US workers won’t do” is a colossal lie. They are repacing US workers just as H-1B’s are replacing US IT/CS workers. Everyone likes to point out the low unemloyment rate, but that tells only part of the story. The EMPLOYMENT rate for working age US citizens is the lowest it’s been in decades, and this is supposed to be boom times. Especially affected among the less skilled are African-Americans and the young.

    The Center for Immigration Studies recently (Spring 2007) released a report, noting that:

    “Common sense, economic theory, and a fair reading of the research on this question indicate that allowing in so many immigrants (legal and illegal) with relatively little education reduces the wages and job prospects for Americans with little education. These are the Americans who are already the poorest workers. Between 2000 and 2005, the number of jobless natives (age 18 to 64) with no education beyond a high school degree increased by over two million, to 23 million, according to the Current Population Survey. During the same period, the number of less-educated immigrants (legal and illegal) holding a job grew 1.5 million.

    Of greater concern, the percentage of employed native-born without a high school degree fell from 53 to 48 percent in the last five years. African Americans have particularly been affected. A September 2006 National Bureau of Economic Research paper found that immigration accounted for about a third of the decline in the employment rate of the least-educated African American men over the last few decades.

    The disproportionate flow of undereducated immigrants to the U.S. has also depressed wages for native-born workers on the lower rungs of the economic ladder. In the last two-and-a-half decades, average hourly wages for male workers with less than a high school education declined more than 20 percent relative to inflation. For those with only a high school degree they are down almost 10 percent.”

    In particular, businesses seem to be unwilling to give young less educated citizens that first all-important job that actually places him or her on the ladder of upward mobility. You can’t climb the ladder if you aren’t even on the first rung.

    Our less educated workers – many of whom have little likelihood of acquiring much more education other than OJT – are suffering from the unwillingness of our governments to enforce immigration laws.

    After a raids in GA and CO closed some meat-packing plants, US citizens lined up to take these jobs, now being paid at a higher rate. In GA, they hired some new workers from a local homeless shelter.

    It is time that we started enforcing the law because we are not talking about victimless crimes here. A perp walk by a “pillar of the community” in several towns and cities across the country would do more good in shutting down the jobs magnet than 20 fences at the border.

    Deena Flinchum

  18. Anonymous Avatar
    Anonymous

    “Assuming that the student would work full time over 3 months of the summer, that would yield 14 weeks * 40 hours = 560 hours.”

    Work doing what? I believe that we are talking about students who have to work – or borrow – their way through college and so can exclude those whose parents can get them a job by making a few phone calls or hiring them as go-fors at the law office.

    Some types of summer employment, especially for young men, have traditionally been the following: construction, yard work, parks and recreation, and, in areas where summer tourism is a factor, hotel-restaurant work. When was the last time you saw a young college student working in construction or lawn work in NoVA in the summer? Do you honestly believe that NO young college students in the NoVA area will work in these fields?

    Here in Blacksburg, we lose students during the summer and get them back in the fall. Many of these students work in stores and restaurants, including fast food, in the area during the school year. I find it hard to believe that many students wouldn’t happily work in the summer if they could find jobs in their communities.

    From one of CIS’s backgrounders (The Impact of New Immigrants on Young Native-Born Workers, 2000-2005)

    “(Over the 2000-2005 period…,) this report finds that the arrival of new immigrants (legal and illegal) in a state results in a decline in employment among young native-born workers in that state. Our findings indicate that young native-born workers are being displaced in the labor market by the arrival of new immigrants.

    Between 2000 and 2005, the number of young (16 to 34) native-born men who were employed declined by 1.7 million; at the same time, the number of new male immigrant workers increased by 1.9 million.

    Multivariate statistical analyses show that the probability of teens and young adults (20-24) being employed was negatively affected by the number of new immigrant workers (legal and illegal) in their state.

    The negative impacts tended to be larger for younger workers, for in-school youth compared to out-of-school youth, and for native-born black and Hispanic males compared to their white counterparts.

    It appears that employers are substituting new immigrant workers for young native-born workers. The estimated sizes of these displacement effects were frequently quite large.

    The increased hiring of new immigrant workers also has been accompanied by important changes in the structure of labor markets and employer-employee relationships. Fewer new workers, especially private-sector wage and salary workers, are ending up on the formal payrolls of employers, where they would be covered by unemployment insurance, health insurance, and worker protections.”

    http://www.cis.org/articles/2006/back806.html

    A college student living at home and working construction in the summer would not be adding to the affordable housing crunch. He’s sleeping in the same bedroom where he’d slept for years. Since he is likely to be covered by insurance either through his parents or via student insurance, he is unlikely to overtax health care systems such as th ER at the local hospital. He’s also unlikely to be adding children to the local over-crowded school system. Thus the community benefits along with the student when he finds summer work in his community.

    As for the student, he’s likely to have to borrow less and so to stay in college and get that degree. Some students simply panic when they realize the price tag on 4-years (or more) financed by borrowing and drop out, planning to work a while, maybe pay the loan down a bit, save some money, and go back later. Later may never come.

    We live in a time where the prevailing philosophy seems to be that what is good for the business interests and the ethnic lobbies trumps what is good for US citizens individually and for the country itself. And that is very, very sad.

    Deena Flinchum

  19. Anonymous Avatar
    Anonymous

    Frankly, I am sick of all this whining about Virginia in-state tuitions. U,Va., rated #2 by Us News after Berkeley, is a bargain at less than $20 K.
    I went to a pretigious, small New England college that is on a par with U.V. Today’s tuition and board? $44K.
    So, pass me the violin and cry me a river. If any of you skinflints ever traveled out of VA., you’d understand what I am talking about.

  20. Jim Bacon Avatar
    Jim Bacon

    Anonymous 12:08, Tuitions outside of Virginia are *unconscionably* high. That small New England college charged $44K because it could, not because it needed to.

  21. Anonymous Avatar
    Anonymous

    Jim Bacon,
    So what’s your point? Out of state colleges get away with murder? The fact is that when companies around the world (and not just in Virginia) look for job candidates, they really do take note of where that person went to college and what he or she did with it. If one can get a relatively (talking national here not parochialism) cheap education and still be comparable to top drawer national schools that’s a great deal. Luckily, Virignia has some public schools in this
    category such as U.Va., William & Mary and to some extent, Tech.
    Mr. Bacon, you really do need to get out of state once in a while and shake the sillies (and the cheapnesss) out.
    Anonymous

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