They cite a College Board report, but don't specify which one. I suspect it's this one: https://research.collegeboard.org/trends/college-pricing
Tables CP-9 and CP-10 do indeed show net price going down for the last few years. But the figures aren't expressed in dollars, but in '2022 dollars', i.e. the charts don't show the actual net price, but the net price adjusted by CPI inflation.
This is an important distinction because, when people pay for college, they're not comparing it with the cost of other goods and services (which is what CPI measures), but whether they can afford it, based on their parents' current/past income, or their own future expected income.
If you agree with this perspective, using CPI to make the curves look flatter does everyone a disservice. Wages for many people haven't kept up with CPI, so a higher nominal net cost still makes college less affordable.
All attempts to track prices over time have some flaw. But not adjusting for inflation in a chart that goes back ~20 years could also be perceived as misleading.
Moreover, we are starting to see growth in real median wages again. They are already above Q4 2019: https://fred.stlouisfed.org/series/LES1252881600Q. So I think it is fair to say in some sense that the real price of attendance has started to go down (albeit not that much).
The thing to compare tuition to is teacher pay. At today's tuition rates, 10 or less students would pay their professors salary. Average class sizes are much larger, so it's obvious the money is going somewhere else. Done. Forget CPI, the schools are pricing based on perceived value, not cost, and an unlimited supply of government backed loans.
And if you look at any graph of college costs vs wages over the past 40 years or so, they have simply skyrocketed.
EDIT: The rest of my comment below is (as pointed out below by gruez) incorrect. The article did say 'in 2021 dollars' in reference to one set of numbers, and it's reasonable to assume they meant that to apply to all the other numbers in the same paragraph.
It's still surprises me that The Economist would use CPI-adjusted figures, but fail to mention the adjustment. Using CPI-adjusted figures is common, but it's not the default, which is why people often add 'in real terms' or some other qualifier.
- this data misses people who transitioned to gig work or other types of self-employment, and
- looking at average (mean) can be misleading due to large numbers at the top
BUT... it appears that median household income has also gone up faster than CPI, which means those objections are likely irrelevant.
Now that I think about it, it also tracks hourly earnings, and if a non-insignificant people work hourly, but have been scheduled less hours (due to automation, or reduced need for labor), then their hourly earnings may have gone up, but their take-home pay gone down.
If anyone has any statistics for either of these, that would be very useful.
If you want to weigh in changes in wages, taxes, etc, that can be very relevant, but ignoring inflation is not a good way to do that.
>[...] Wages for many people haven't kept up with CPI, so a higher nominal net cost still makes college less affordable.
Wages have kept up with CPI, at least for the period that The Economist mentioned: https://fred.stlouisfed.org/series/LES1252881600Q
I suppose you could claim that wages for everyone hasn't kept up with inflation/tuition rises, but that's not the claim that The Economist is addressing and is basically cherry-picking.
Going to university should be viewed in the same light as a financial investment, there is no guarantee it will improve your standard of living, except perhaps through networking, a case of who you know not what you know that matters, the old school tie network, that sort of thing.
For example, the police when charging people dont ask what your educational achievements are or where you studied. So are some university's going to increase your chances of ending up in prison or do they make you an untouchable Clarke in their field of knowledge? https://www.youtube.com/watch?v=Yk4wX4FPRzE&t=6s
In a way, the police are hiding the poor standards of the state educational system by not publishing this data, let alone capturing it for data analysis and they are also protecting the reputation of university's.
Likewise the course offered, is it relevant for today and the future or are they teaching courses on subject matter which is becoming irrelevant? Look at how quickly some things have changed over the last twenty years.
And the obvious elephant in the room, is how many people have studied a degree which is relevant to their current employment and past employment? In other words, does having a university degree show you can play nicely with others and evolve from academic speak to corporate speak?
Again backing up the impression the university's are selling knowledge on the subject matter you want to learn, but its not their job to find you employment pertaining to the subject matter you have studied. This applies to all universities.
So then the networking potential is relied upon and if you happen to work for a business which values university degrees highly, then there is a level of "obedience to authority" which can be applied as a factor to that business.
Take Goldman Sach's, AFAIK their policy is to recruit only graduates and to let a % go every 3 years irrespective of company performance, so this displays an unconscious bias towards university's and their reputation.
Some large companies like a drug company will actively sponsor some aspect of a university in order to influence what is taught on the course and lets them have first access to the students, who show potential, or obedience to the scientific theory of the day, which happens to be lucrative for the business. In biology there are lots of theories, mainly because there is still so much undiscovered potential in the body.
Some university courses will also likely land you a job in a quango, which if your aspirations are muted, will set you up for life because serving on a quango can be highly lucrative, if everyone tows the line.
In my time, none of this was explained to me, and I doubt it is now, but if you have a parent who has been through the uni process, especially one of the more prestigious uni's, you be made aware of what to look for, especially if you are the type that likes to name drop your university name. mic drop....
This is a good way to think about it in the USA, but IMO going to university should be viewed in the same light as going to high school or trade school -- ie, a public good, available to all, and required of some subset of the population to ensure the continuing function of a modern society.
Countries with this system seem to spend less and get better outcomes from their higher education systems.
A parasitic idiocracy ensues from which the prospect of recovery at all is grim at best.
Why would corporations wish to exclude the brightest minds so they can increase profits?
Ensuring opportunities for working class and marginalised people is an issue that can only be addressed by community or government
Were they to do so deliberately, it world be to get a larger piece of a smaller pie.
More likely something like that would be an emergent phenomenon where no one was doing it deliberately.
Also, if anything, the education system is contributing to our future idiocracy - esp. the public school system, which is a complete and utter failure.
The worst case scenario is that we return to the pre-GI Bill status quo, where generally only those from wealthy families could afford a college education unless they won scholarship money. There was a period from the late 1940s until roughly the 1980s or 1990s when college opportunities were extended to the middle class and the poor through the expansion of public university systems that offered low (or even no) tuition, extended merit- and need-based scholarships that are funded publicly and privately, and student loans. Tuition and other expenses were low enough to where it was possible for many students to cover some or all of these expenses by working a part-time job during the school year and/or by working full time in the summer, and for those who needed to take out student loans, debt levels were not crippling. But in the past few decades, the cost of college has risen to levels where working part-time during the school year and full-time during summers just doesn’t cover costs like it used to, and where people are graduating with increasingly burdensome student debt loads. The high cost of housing isn’t helping matters.
I see a few potential solutions:
- Price caps imposed by the federal government as a condition for accepting federal student aid, though this could mean cuts to services.
- Upstart colleges and universities forming that offer a reduced-cost college experience by being “no frills” and focusing on teaching without offering the wide array of services that even the most modest universities offer (e.g., no career centers, no well-equipped fitness centers, no luxury dorms, no on-campus health centers, etc.). However, some of these services may be mandated as part of accreditation standards, though I don’t know much about this.
- A concentrated effort to improve the nation’s K-12 education so that way high school graduates are equipped to perform a wide array of jobs that don’t require higher education, along with an effort by Corporate America to hire high school graduates for jobs that truly don’t require a university education.
The question how this is compared to peers, and if it is actually brightest minds who have opportunities, or those who have monetary support from parents.
Most research at private companies is namesake.
If anything, bright minds on scholarships are diluted with sportsmen and everyone and their dog on student loans.
Go to community college for 2-3 years, then matriculate from the university. Way cheaper, better teacher/instructors, more time to mature, start early in 12th grade, and the diploma is from the university.
What do you lose? 2-3 years of goofing off at a country club.
What do you gain? time and money.
Not just, those, of course, really but any shared activities+clubs for practically any niche– college could be considered one of the last places where everyone has normalized openly seeking groups of friends based on common interests, to the point most throw extracurricular fairs at the beginning of every year. Not saying those don't exist after college, but finding e.g. a truffle mushroom foraging group is a lot harder in your 30s if you've never met anyone who does it before.
Depending on what you want in life, the social class you started in and the one you want to end in, that is worth a lot...
Now that I've been living in the real world for quite some time, I yearn to return to the goof off at the country club. I acknowledge that I am definitely looking back at my university days with rose colored glasses, but I still vividly remember the lifestyle I had while attending. I can't say the same thing for most of the education I received there. That's not to say it was bad, or that I didn't apply myself, just that we tend to forget the majority of things we're taught.
That being the case, while it is true that I would have probably gotten a more straightforward education at a much lower price by attending a community college, I would have also probably forgotten just as much of it. That being the case, I'm glad the extra money spent went towards the things I look back fondly upon.
I’m not saying don’t go to community college by any means. I think for people who still need to mature more before becoming independent, or who are especially price sensitive (remember there are many colleges in the US that will give you a full ride just for good test scores, or there were a few years ago at least) it’s a good choice.
But just because the sticker price is a little lower doesn’t mean it’s better for everyone
But most people take community college courses for the first two years of university. At every non-elite university I've worked at or had a family member work at, the most-subscribed Mathematics courses are College Algebra and Calculus I -- ie, high school-level courses where the instruction is probably better in community colleges.
Also: Mathematics is an outlier in that the instructional staff is fucking amazing at community colleges because of the dismal job market. The situation is quite different in CS. But, again, it doesn't matter, because most people at most universities are taking high school and CC level material their first 1-2 years.
Using the calculator at https://www.savingforcollege.com/calculators/financial-aid-c..., and setting no savings and no 529, it appears you're expected to pay about 1/4 to 1/3 of your AGI (checked at $50k and $500k and several points in between). Which basically means no relief from the sticker price at private schools if your AGI is over ~$250k, and no relief from the sticker price at even the least expensive public schools if your AGI is over ~$80K.
Or am I missing something?
Do not go into debt for college if at all humanly possible. Fuck the system, it's designed to fuck you.
The financials are almost secondary to that, although there's also a lot of bad targeting by kids in those (where you'd go out of state / private instead of going to your flagship public and save a lot of tuition $$$).
It's not that unusual to find wealthy parents that refuse to help their children at all, even though they didn't do anything, and are fine people. I'm a bit unsympathetic to OP, but the young adults that have literally nothing thanks to the whim of some asshole... that's really tough, and a flaw in the system.
Anyway, there are rare cases, I believe, but the government makes this very difficult. If you grew up in a normal household, live an ordinary life, but your parents refuse to pay, you're out of luck. You will struggle to get this even if you're estranged from extremely abusive parents.
Undergraduate is a racket. If my kids choose to get into tech I will use my connections to get them a job, either working for one of my companies or for a friend of mine, or start a company with children of friends. Now that is how the real world works - not handing 6 figures every year to a government sponsored scam.
Your solution to the "racket" that is undergraduate education is to... engage in nepotism? What exactly is that supposed to mean in terms of policy implications? Rather than paying tens of thousands for an undergraduate degree, students should just ask their parents to vouch for them instead? What if their parents don't have the connections? And what about the flip side? Should your friends oblige you and hire your children without any credentials just because you're their friend?
No, to be really successful you need both the expensive fake degree, and the nepotism.
That's not just acceptable, but ought to be considered a moral obligation as a parent.
Take a look at this graph of college costs vs salaries for young people over time: https://image.cnbcfm.com/api/v1/image/106968880-163579955995... . It's really hard to look at that graph and make the argument "No, no, expensive college costs are basically all in your head." The other thing I think is insane, which I see often, is to compare salaries of college grads vs. HS grads to make the argument that college is "worth it". But why is it a moral argument that colleges should have a right to "capture" as much of this increase in earnings as they can? After all, a huge reason for the discrepancy is that people who are inclined to go to college are more likely to get higher paying jobs in the first place. It's kinda like how I see some marketing departments that try to ascribe every single purchase to their efforts (and winning a larger budget in the process), when their "science of marketing attribution" is often a lot of hand wavy BS.
This article does make some fair points: public colleges tend to much cheaper than private ones, and most colleges give substantial grants. But even then it's leaving out some vital details (e.g. I didn't hear it mention room and board or obscene textbook prices). I think the thing that is most frustrating to me about the general college cost debate is that the thing that is most out of whack is giving giant, non-dischargeable student loans to students in non-lucrative majors. The reason lenders are willing to give hundreds of thousands of dollars in loans to someone who studies poetry is they know either the government has their back, or the student will be paying off their loan until they die - and colleges know this, too, which is why they feel so little downward pressure on pricing.
Let me stop you right there. The fact that the graph doesn't show the dip in actual tuition costs that the article mentions, and the fact that other commenters have corroborated the dip does indeed exist, makes me think that the chart you linked is talking about the wrong metric. I suspect that the prices are "sticker prices", not actual costs, which the article specifically addresses:
>Sticker prices are rising while net costs remain steady and, in some cases, drop. A report from the College Board, a non-profit, shows that whereas published tuition and fees for private non-profit colleges increased from $29,000 in 2006-07 to $38,000 in 2021-22 (in 2021 dollars), the net price actually decreased from $17,000 to $15,000.
Anyway, the best schools are free to attend (at least until the loan payments start.) You get showered with grants and loans if they accept you. It's the worthless ones that benefit from signalling their cost. Those are the schools paying smart (and culturally interesting) kids to attend, as atmosphere for the real customers.
2) Good for them using inflation-adjusted prices. Too bad incomes haven’t kept up with inflation. If we’re going to discuss “affordability” we probably need to include the income side, hmm?
3) I’d hoped that my initial comment was worded closely enough to the headline for the tongue-in-cheek to be more blatantly obvious. Alas.
A good teaching-oriented university needs dedicated faculty, dedicated students, and facilities that help the faculty teach and help the students learn. Some costs are unavoidable, such as hiring good faculty, running a library, maintaining facilities, etc. However, if we eliminate the “frills” and pare a university down to its essentials, will it be affordable? I’m very curious if this is one of the major factors, or are there more significant factors leading to exploding costs?
In any case, the thicket of incentives is so dense, and the interests so mutually intertwined, that any reform would be met with kicking and screaming (and lots of rationalization, of course). This university lobby would work overtime against successful attempts to educate the public about what it means for a university to be good, and what sorts of gimmicks make them more expensive. But it is still important to try. It is important to counter the misinformation that's taught in primary school about what universities are about, but that would also entail a reform of primary education by implication, another milieu that would resist reform. It is important that we try. We need a clear and correct notion of what education is for, and then what primary, secondary, etc. education is for. Once there is clarity, it becomes easier to make decisions about how to structure education, what to keep in, and what to keep out. It is easy to see why some may not want to resolve the ambiguity.
One avenue that's being pursued is the founding of new colleges that demonstrate what is possible. This is the long haul, but in an environment as entrenched as this one, it may be the only realistic solution.
It’s this simple. I don’t know why we need think pieces on this topic. Either make college a true market product (loans would change based on expected return), make it free for all (bad idea mainly), or create an economy where education isn’t needed (regressive and not practical without “make work” which is cruel).
We need to loose the grip of these institutions on our economy, they're - very evidently - a trillion dollar sink.
I guess it’s kind of like enterprise pricing, in reverse. Rather than the rich outliers getting the extortionate pricing, it’s the average consumer who has to request the real price. That lack of transparency makes making a rational choice harder for the average person.
The price discrimination approach is a really effective method for pricing, and I'd be all for it (progressive taxation, basically) if not for the shoddy implementation leading to a student loan crisis.
