Why Is Higher Education So Expensive?

College tuition costs have gone up 945 percent since 1980. The increase in tuition places a heavy burden on young people and their families. What has made college tuition so expensive? Professor Daniel Lin  explains that tuition prices are rising so quickly because of supply and demand. As demand for college increases, universities can respond by increasing either enrollment or tuition costs. Since most universities are limited in the number of students they can enroll, they have largely responded to higher demand by increasing tuition.

Demand for a college education has increased partly because graduating college dramatically increases job prospects and partly because of government subsidies. Although many believe subsidies will make college more affordable, government subsidies actually contribute to rising costs. “When you subsidize something, it’s cheaper for people to consume. So people consume more of it and demand rises,” Professor Lin says. A rise in demand will mean a rise in costs.

Colleges have no trouble filling seats, even with rising costs, so they keep spending and increasing tuition. Improvements to campus facilities and the addition of more administrative staff make college tuition even more expensive without necessarily improving the quality of education students receive. We now know the root causes of rising tuition—promises of higher wages and increased subsidies. Professor Lin contends that this information should be used to seek solutions.

Kayla Cunningham More than 1 year ago
There is no such thing as free. And Financial Aid is not free money just to pay for college. That money does come from somewhere and trust me that somewhere is already spending more than they should.
Roberto Allende More than 1 year ago
I don't agree.

There are many exceptions but there are too many universities that have been invaded by psychopaths, sociopaths, and capital extremists’ intent on bleeding universities and students dry. 

Colleges and universities are destroying tenure; they're calling college professors "lecturers" and "instructors" to keep pay low; they are paying desperate college professors by the hour; they're in cahoots with book publishers, food vendors, and credit card companies that overcharge kids for things as basic as an ATM card, food, and books. They're the same people that let young adults go into debt for $80,000. 

Colleges and universities did nothing when in 1995, the Republican-controlled 104th United States Congress privatized Sallie Mae. Sallie Mae became a corporation, "went rogue," and started getting into the business of making unfair and deceptive loans to kids and their parents. Banks and loan companies also saw opportunities to easily double and triple their investments with no risk so they deviously started marketing student loans as something a "normal American" did along with buying a big house and leasing a big car.

Universities, particularly small private universities, saw opportunities to enrich themselves and compete with prestigious Ivy League schools so they increased their tuition fees because uninformed kids were getting easy money. Because many capitalist extremists did whatever they could to funnel taxpayer dollars to their corporate buddies who made trillions of dollars in war profits, bad loans, and deceptive financial deals, state schools saw their education budgets diminished which also forced them to increase tuition fees to stay relevant.

Notwithstanding the money we lost because of wars and deceptive financial deals, had Republicans never privatized Sallie Mae and ensured that people had the same bankruptcy protection as other unsecured debt, banks would have considered the risk, tuition would not be as high, and we would not be worried about a trillion dollar student loan debt.

H.R.1501 -- Student Loan Privatization Act of 1995 (Introduced in House - IH).
S.1198 -- Student Loan Privatization Act of 1995 (Introduced in Senate - IS).
GeF More than 1 year ago
colleges should be free like in other places
Keith Strawder More than 1 year ago
one quick mention, the 945% number seems a little higher than what I have found. According to the National Center for Education Statistics, College Board, and BLS, i have found the number to be close to 200-225% when adjusted for inflation.

Christina La Fleur More than 1 year ago
How, without financial aid, can students from diverse socioeconomic backgrounds afford college?  What are the alternatives to these "subsidies?"
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