Inflection Point: What is Driving Higher Ed Costs ?

Photo of CU Denver studentsThere is no question that American higher education costs have been rising, faster than inflation, making affordability and student debt front-page issues.

Since state institutions serve most American college and university students, arguments about the causes of increased higher education relate closely to state budgets and questions of who is responsible for higher costs.

Some analysts have argued that the tuition increases are caused by having more university administrators, making high salaries, and this has driven up costs.  Another argument is that tenured faculty teach fewer courses, as there has been increased emphasis on research work, and this drives up costs.  Another is that institutions are basically rent-seeking – as federal financial aid support goes up, colleges and universities just increase their tuition to match.  Yet another argument is that student amenities are more expensive – climbing walls, wellness centers, nicer dorm rooms.

A report that came out in late spring, by Demos, tries to assess the arguments. They examine real higher education internal cost data, from the NCES Delta Cost Project Database.

Their conclusion is that, while all of these factors may contribute a bit, the overwhelming cause of tuition increases is reduced state aid to support higher education.  Higher education institutions then must raise tuition to backfill and pay their bills, as the state share is reduced.

This is no surprise in Colorado, where state cuts came with a vengeance in the early 2000s, and put us at #48 in state support per student, at less than half the national average. Unfortunately, it looks like a number of other states will soon catch up (down?) with us.

 



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