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Posted at 11:22 AM ET, 02/ 4/2011

Is college always worth it?

By Derek Thompson

Here's the higher education conundrum in a sentence: The benefits of college are growing, but the costs are growing faster.

Each year, a college education becomes more valuable for U.S. workers. The college premium -- the "bonus" a typical college-educated worker receives over a high-school grad -- has doubled in the last 30 years in real terms.

But each year, a college degree moves further out of reach for middle class families. A four-year public college education cost 18% of a middle-class family's income in 2000. Today, it's 25%. And that percentage will grow exponentially, since middle class wages are stagnating and higher education costs are growing four times the rate of inflation, according to Louis E. Lataif in Forbes.

Education is an appreciating asset. By that, I mean it helps young workers leapfrog low-skill jobs, so its value increases over time. But today, the price is prohibitive. Since the mid-1990s, average student debt has doubled. Today, two of three college graduates from public and private universities have loan obligations that average more than $20,000.

How do we bring down the costs of college? Financial support for college students is a fine bandaid, but it does nothing to slow down runaway tuition. If we want schools to do more and cost less, we need universities to take a page from the business playbook and use technology to become more productive. Lataif suggests more online classes, fewer paper books, and a truncated college experience:

There is so much classroom time that can be off-loaded to technology tools for self-paced learning in asynchronous time. And then the time spent in the classroom on the same subjects can be much richer with robust discussion and debate about the strengths and limitations of those tools and techniques.

Many four-year college degrees will inevitably be delivered in three years, or at least a three-year option will be available. With two-thirds of private-university students going on for a master's degree, those students could earn their two college degrees in four years--for the price of one today. That would certainly increase the value...

And for future students, what will a "library" be? These students will have in their pockets handheld devices that can access virtually everything that's ever been published.

This sounds like a smart start, but it might not have a big impact on bending the curve of college inflation at the top. Our world-class research universities compete in a national arms race for the best faculty, facilities, grants and young minds. Attracting the best students and professors means building the newest labs, updating the plushest dorms, and promising the highest wages. How do you convince Yale to reduce its costs while Harvard and Princeton sharpen their edge? I hope somebody else has the answer, because I don't.

Derek Thompson is an associate editor at The Atlantic, where he writes about economics, business, and technology.

By Derek Thompson  | February 4, 2011; 11:22 AM ET
 
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Comments

I grow weary of these conversations. College is worth it. There are certainly economic issues and people should strive to get their degree at a cost they can afford. We should help make college more affordable.

But it is worth it! A well educated society is worth it! People's happiness is worth it!

Posted by: sailor0245 | February 4, 2011 11:44 AM | Report abuse

sailor0245 - Agreed! Higher education is indeed worth it. But I don't think it's fair to suggest that Derek thinks otherwise.

The rate of growth in college costs is steep enough that it threatens the basic accessibility of college education. For now, that's fine - most families, through a mix of subsidy, scholarship, or spending, can still send a child to college. But what happens when the cost of college starts to exceed the ability of the average American to pay for it?

At that point, with the college premium still growing, higher education becomes another driver of inequality - benefiting mostly the wealthy, and benefiting them disproportionately.

Hell, I don't have any answers either. And partially that's because the current system has been so resistent to savings up to this point. I think that whatever bends this cost curve is going to involve some pretty fundamental changes to the way we deliver education, full stop.

Posted by: strawman | February 4, 2011 11:55 AM | Report abuse

Amazing that with all the assistance we have, to help pay for college, that the cost keeps going up. Seems like no matter what we do to subsidize costs, it's only the ones who are willing to dig into their own pockets or take out their own loans who are ever able to afford it.

What can we do to take the work out of getting an education???

Posted by: whoisjohngaltcom | February 4, 2011 11:56 AM | Report abuse

Are we sure that the "bonus" from a college education has doubled? Or has the "bonus" from a high school education dropped? The statistic is a comparison, so it's important to look at the other side.

What if the problem is worse--the real value of a college education is stagnant and the price of college is skyrocketing?

Posted by: punditpending | February 4, 2011 11:57 AM | Report abuse

I'm highly surprised the article does not mention significantly decreasing state support (tax dollars) for public universities as one of the reasons for runaway tuition rates. As state governments lower the amount of dollars the contribute to higher education, tuition has to exponentially increase in order to cover the costs of college. At the large university of 25,000 students I attend in the midwest, the state contributes less than 15% of the total cost to run the university. The rest is tuition, fees, private donations, grant funding, and endowment funds.

The loss of state funds does not completely account for "runaway" tuition increases, but is certainly a significant factor because it shifts more of the cost of running a university on a very small segment of the population (the college student/family) versus the population at large (state residents).

Posted by: knoelle11 | February 4, 2011 12:06 PM | Report abuse

"Is college always worth it?"

Of course it's not always worth it. Millions of people obtain college degrees, find themselves in jobs that don't require college degrees and basically wind up with 4 (or more) years of lost income and a mountain of debt. Many of these people also didn't much enjoy the educational experience. It was a complete and total loss for them.

The simple fact of the matter is that not everyone benefits from a college education. Even if every single person is capable of getting a lot of out it - and not everyone is - there are millions of jobs which simply don't require a college degree.

Too many people are getting undergraduate degrees, and at the same time too many people are graduating without marketable skills.

"But today, the price is prohibitive."

Rising prices are normally market signals saying "reduce the quanitty demanded". However, we keep plowing money and assistance into college, which maintains the quantity of demand and pushes prices sharply higher.

Without much need to compete on cost, universities compete on quality (and not always instructional quality). They get into "arms races", trying to outdo each other in terms of having the most attractive total experience.

"How do we bring down the costs of college? Financial support for college students is a fine bandaid, but it does nothing to slow down runaway tuition."

Indeed, financial support directly increases costs. It blunts the price signals.

Posted by: justin84 | February 4, 2011 12:10 PM | Report abuse

College has become an arms race.

Why do we build such expensive gyms, dorms, labs?

Why do we provide title IX sports?

Why do we push more people into college thus naturally driving the price up?


"As state governments lower the amount of dollars the contribute to higher education, tuition has to exponentially increase in order to cover the costs of college. "

This is a liberal lie. Stats have not lowered the amount of dollars for anything. At most, they haven't paid the grossly inflated rising costs that unscrupulous liberal professors are demanding, but that is NOT a lowering of dollar amounts.

Posted by: krazen1211 | February 4, 2011 12:18 PM | Report abuse

How about guaranteed free education for all? Anyone who grew up in Georgia recently will not understand this strange concept of paying for college...

Posted by: cassander | February 4, 2011 12:18 PM | Report abuse

Scholarships are vital. If other kids actually tried in high school...

Posted by: ReverseThat | February 4, 2011 12:20 PM | Report abuse

http://seattletimes.nwsource.com/html/pacificnw/2009833524_pacificpcollegcost20.html


Cost is a huge concern, says Nancy, whose husband is a software salesman. "We've been saving since she was born. I was told back then it would cost $200,000 by the time she was college age. I remember laughing at that. But it turned out to be dead on."

On the tour, a student guide, Alex Thomas, tells visiting families about how, beyond the classroom, nearly three-quarters of Whitman students play sports — everything from Ultimate Frisbee to lacrosse. There's not much reason to leave campus on the weekends, Thomas says, what with the giant inflatable movie screen, the casino nights, the moonlight paddling trips, the farm-fresh cafeteria food and the resident advisers who try to take care of your every need.

Whitman President George Bridges says all sorts of new student services have added to the cost of running the university. The library and health center are now both open 24 hours a day when school is in session. There's the free mental-health counseling and the free academic tutoring.

"Sometimes we are asked, is all that necessary?" Bridges says. "But we want to support the students in their health and well-being."

Ehrenberg, the Cornell professor, points out that, unlike trends in other industries, the increasing cost of the college workforce hasn't been offset by efficiency gains.

While machines and computers can help a company like Boeing make airplanes more efficiently, the basic premise of college — a wise master passing knowledge to a roomful of eager students — hasn't changed much since the University of Oxford opened its doors in England some 900 years ago. In fact, technology has only added to educational costs.

One pernicious contributor to rising tuition is the annual college rankings put out by U.S. News & World Report, Ehrenberg says. Colleges with smaller class sizes and more faculty resources do better under the U.S. News formula. Put simply, the more colleges spend, the more they are rewarded in the rankings, whether the extra money improves quality or not.

IN MICHAEL Hochberg's lab at the UW, the cables and computers and cameras tumble over each other as if crammed into a cluttered garage.

On the optical table, light beams shoot through a silicon wafer. One day, Hochberg hopes, the experiments will give birth to new, more efficient computer chips that operate not with electricity but with light.

The UW last year lured the 29-year-old rising star in electrical engineering to campus with a salary of about $90,000. But the real money came in his startup package: $1.2 million for him to hire staff and set up his lab and another $5 million to buy and install a machine called an electron-beam lithography tool, which he'll share with other researchers.

Posted by: krazen1211 | February 4, 2011 12:24 PM | Report abuse

I think Derek's issue about the top schools is a bit misguided.

I went to Yale, and I loved it - and I know lots of other people who loved their Ivy League experience. But I also know plenty of people who loved where they went to college, and got a great education, and didn't pay an arm and a leg for it, relatively speaking. In general, yes, college is more expensive than it should be - but looking at the Ivy League for cost controls is the wrong place. Let them compete with each other - you can get a fine education somewhere else.

My wife likes to say that if you don't get into one of the top schools, there's no point in going to private college at all - just go to your state's main university and you'll be fine, in a lot of cases. In other words, Bennington is pointless. If you can afford it, great, go for it - you'll love the trees and the campus and your fellow students. But in terms of planning for the rest of your life, if you don't get into Yale, CMU, Stanford, etc., then just go to public school - you'll save a ton of money and you'll get a fine education.

Posted by: ezra_reader | February 4, 2011 12:29 PM | Report abuse

As an interesting note, the real tuition at Harvard didn't change for half a century. From 1900-1947, Harvard tuition fell from $3,800 to $3,719 (in 2007 dollars).

It then rose 3.5%/yr from 1947-2010. Note that this is the real or inflation-adjusted change in tuition. Probably more you add in the ancillary fees, many of which didn't exist decades ago.

Today, it costs 8.9x as much to obtain a Harvard education, adjusting for inflation, than it did in 1947.

The fees for health services and student activities in 2007-2008 cost almost the same amount as the 1947 tuition - again, adjusting for inflation.

http://kwharbaugh.blogspot.com/2005/02/educational-costs.html

*note - this source doesn't have data for 1900 prices. Eh.net does, and it shows a lot of price inflation between 1900 and 1915. Also, the author thinks
that the price data for 1916 and 1920 is wildly improbable. It wasn't. There was a ton of inflation associated with World War I, but Harvard's tuition was kept constant. In those days, inflation wasn't a permanent trend but a periodic result of extreme situations such as wars - as a result, most people expected prices to fall back down. Indeed, prices fell quite a bit from 1920-1933, with most of the drop occuring during the 1920-21 and 1929-33 Depressions. Harvard did appear to increase tuition in the 1920s when it became fairly clear that a quick reversion to the pre-war price level wasn't going to happen.

Posted by: justin84 | February 4, 2011 12:35 PM | Report abuse

More online classes will probably degrade the value of a degree. I agree with earlier comments that higher education support from state gov't has dropped substantially, causing more cost to be shifted toward the individual.

Posted by: will12 | February 4, 2011 12:42 PM | Report abuse

Yale, Harvard and Princeton were bad examples for pricing education out of the reach of the middle class and poor. They all have need-blind financial aid. The only people paying full tuition are those whose parents are making some hundreds of thousands of dollars every year. All of the best private liberal-arts colleges and universities are never going to turn to online classes or cutting their libraries, and that's fine, because there will always be people willing to pay for the premium and the endowments will always be big enough to handle everyone else.

Every state used to guarantee cheap college education that could compete with the Ivy League/liberal-arts colleges for anyone in-state who could get in. We should not be compromising the quality of that education.

Posted by: farside | February 4, 2011 12:47 PM | Report abuse

Is it expensive? Absolutely

Do I know of a job that doesn't require one? No, I honestly can't think of a single job in my LAW profession or below that would hire someone without one

For many professions, it is mandatory

Posted by: Bious | February 4, 2011 12:54 PM | Report abuse

--*I hope somebody else has the answer, because I don't.*--

You don't want the answer, Derek, because it's the same answer to the question of rising health care costs: Get the freaking government out of a market in which it has no legitimate interest. In education and health care, it is the high (and increasing) levels of government involvement that is driving the dislocations. It's what *happens* when governments attempt to remake markets to fit arbitrary political notions of what they should be. The rising prices are one of the automatic adjustments made to counter an dislocation imposed from outside.

It isn't rocket science, unless you're hell bent on spending other people's money for them in an attempt to shape the world to one's blinkered view of how things should be (and even then, it's not rocket science, but some form of despotism.)

Posted by: msoja | February 4, 2011 12:59 PM | Report abuse

It is pretty typical to see a post about "college education" that doesn't even mention community colleges. But it shouldn't be - half the undergradutes in the United States are at community colleges. Still, we got the obligatory reference to Ivy League schools.

Community college enrollment has gone up during the last few years, and any fool with two brain cells can see why. You can get two years of your education for a fraction of the cost. And if your performance is sound, you'll probably be able to get into a program at a 4 year school in your state under an articulation agreement. It's the smartest way to "do college," if you don't have wealthy parents or lots of aid. And I think it's the only sensible model for the future we have. I'm all for expanding the hell out of community colleges and focusing the more expensive university structure on upperclassmen and graduate students. That's where all the research activity happens, anyway.

Of course, this would require adequate funding, which as others have pointed out here is not happening at the state level anymore. And perhaps just as difficult, this would require students and parents to adjust their expectations. You want the full college experience, with dorms and a fancy gym? Okay, good for you, it does sound like a nice life, but do you really need FOUR CONSECTIVE YEARS of it? Staying with your parents for 2 more years and commuting to the local cc is a lot less appealing to the average 17 year old than the whole "going away to college" package, and these days 17 year olds typically get what they want.

But something has to give. We have a cheaper way to educate students in the community college model. We're just too snooty to even mention it, never mind partake of it, when there is Yale's tuition to discuss!

Posted by: 4620316 | February 4, 2011 1:08 PM | Report abuse

"More online classes will probably degrade the value of a degree. I agree with earlier comments that higher education support from state gov't has dropped substantially, causing more cost to be shifted toward the individual."

will12's comment summarized the crux of the problem which other posters have mentioned. The problem is not so much that the cost of the degree has increased -- which it has, and for a lot of the superficial reasons mentioned by krazen1211 -- but that individuals and families have been forced to assume a greater share of those costs by state legislatures sticking their unis with their budget problems rather than solving them like responsible lawmakers. The "more online classes" etc. is premised on the idea that it is the degree -- a piece of paper -- that is important, not the education. This is another short-term, band-aid fix to a larger problem that risks undermining our economic and cultural future by "training" engineers and architects that can't design, scientists that can't innovate, historians and social scientists that can't research, writers that can't write, and artists that starve before they've created their best work.

Posted by: dollarwatcher | February 4, 2011 1:15 PM | Report abuse

http://seattletimes.nwsource.com/html/pacificnw/2009833524_pacificpcollegcost20.html


Cost is a huge concern, says Nancy, whose husband is a software salesman. "We've been saving since she was born. I was told back then it would cost $200,000 by the time she was college age. I remember laughing at that. But it turned out to be dead on."

On the tour, a student guide, Alex Thomas, tells visiting families about how, beyond the classroom, nearly three-quarters of Whitman students play sports — everything from Ultimate Frisbee to lacrosse. There's not much reason to leave campus on the weekends, Thomas says, what with the giant inflatable movie screen, the casino nights, the moonlight paddling trips, the farm-fresh cafeteria food and the resident advisers who try to take care of your every need.

Whitman President George Bridges says all sorts of new student services have added to the cost of running the university. The library and health center are now both open 24 hours a day when school is in session. There's the free mental-health counseling and the free academic tutoring.

"Sometimes we are asked, is all that necessary?" Bridges says. "But we want to support the students in their health and well-being."

Ehrenberg, the Cornell professor, points out that, unlike trends in other industries, the increasing cost of the college workforce hasn't been offset by efficiency gains.

While machines and computers can help a company like Boeing make airplanes more efficiently, the basic premise of college — a wise master passing knowledge to a roomful of eager students — hasn't changed much since the University of Oxford opened its doors in England some 900 years ago. In fact, technology has only added to educational costs.

One pernicious contributor to rising tuition is the annual college rankings put out by U.S. News & World Report, Ehrenberg says. Colleges with smaller class sizes and more faculty resources do better under the U.S. News formula. Put simply, the more colleges spend, the more they are rewarded in the rankings, whether the extra money improves quality or not.

IN MICHAEL Hochberg's lab at the UW, the cables and computers and cameras tumble over each other as if crammed into a cluttered garage.

On the optical table, light beams shoot through a silicon wafer. One day, Hochberg hopes, the experiments will give birth to new, more efficient computer chips that operate not with electricity but with light.

The UW last year lured the 29-year-old rising star in electrical engineering to campus with a salary of about $90,000. But the real money came in his startup package: $1.2 million for him to hire staff and set up his lab and another $5 million to buy and install a machine called an electron-beam lithography tool, which he'll share with other researchers.

Posted by: krazen1211 | February 4, 2011 1:19 PM | Report abuse

http://seattletimes.nwsource.com/html/pacificnw/2009833524_pacificpcollegcost20.html


Cost is a huge concern, says Nancy, whose husband is a software salesman. "We've been saving since she was born. I was told back then it would cost $200,000 by the time she was college age. I remember laughing at that. But it turned out to be dead on."

On the tour, a student guide, Alex Thomas, tells visiting families about how, beyond the classroom, nearly three-quarters of Whitman students play sports — everything from Ultimate Frisbee to lacrosse. There's not much reason to leave campus on the weekends, Thomas says, what with the giant inflatable movie screen, the casino nights, the moonlight paddling trips, the farm-fresh cafeteria food and the resident advisers who try to take care of your every need.

Whitman President George Bridges says all sorts of new student services have added to the cost of running the university. The library and health center are now both open 24 hours a day when school is in session. There's the free mental-health counseling and the free academic tutoring.

"Sometimes we are asked, is all that necessary?" Bridges says. "But we want to support the students in their health and well-being."

Ehrenberg, the Cornell professor, points out that, unlike trends in other industries, the increasing cost of the college workforce hasn't been offset by efficiency gains.

While machines and computers can help a company like Boeing make airplanes more efficiently, the basic premise of college — a wise master passing knowledge to a roomful of eager students — hasn't changed much since the University of Oxford opened its doors in England some 900 years ago. In fact, technology has only added to educational costs.

One pernicious contributor to rising tuition is the annual college rankings put out by U.S. News & World Report, Ehrenberg says. Colleges with smaller class sizes and more faculty resources do better under the U.S. News formula. Put simply, the more colleges spend, the more they are rewarded in the rankings, whether the extra money improves quality or not.

IN MICHAEL Hochberg's lab at the UW, the cables and computers and cameras tumble over each other as if crammed into a cluttered garage.

On the optical table, light beams shoot through a silicon wafer. One day, Hochberg hopes, the experiments will give birth to new, more efficient computer chips that operate not with electricity but with light.

The UW last year lured the 29-year-old rising star in electrical engineering to campus with a salary of about $90,000. But the real money came in his startup package: $1.2 million for him to hire staff and set up his lab and another $5 million to buy and install a machine called an electron-beam lithography tool, which he'll share with other researchers.

Posted by: krazen1211 | February 4, 2011 1:19 PM | Report abuse

The overpriced professor you reference typically starts at $35,000 after spending nearly 10 years in school to earn a Ph.D., the most advanced degree with the most specialized, technical knowledge you can achieve in most areas.

The federal government has nearly no role in determining the scope of university and college missions - that's typically a state decision, unless you want to talk about the development of the Land Grant Act which created many flagship state universities - but that happened in the late 1800's. States have more of a hand in defining the mission of universities while funding them less and less.

Posted by: knoelle11 | February 4, 2011 1:52 PM | Report abuse

The way universities have to stay afloat is to attract students to attend - by playing up athletics, by building nice dorm rooms, by utilizing new technology, by offering a vast array of undergraduate services that were not available to undergrads 10 years ago. Losing tuition paying students + lack of state funding support = death to universities. And for some areas, that also means the death of small to mid-size communities. While I don't mean to argue that the so-called arms race in college amenities is a good thing, without state support, universities are forced to do things that provide operating dollars.

I'll also bet that UW faculty member mentioned in the Seattle Times article will draw in nearly $5 million (or more) in grant dollars every couple of years. A significant portion of those dollars will go to support university overhead/operating. In short, that professor will earn his or her salary in grants. That 1.2 mil plus lab costs is a one time expenditure; the grants will come every couple of years.

Posted by: knoelle11 | February 4, 2011 2:00 PM | Report abuse

I can't really speak to the cost of college as a whole, but as for the rising cost of the top research universities I think you overstate the costs. Now full disclosure, I interview high school students applying to MIT, but I don't work for MIT. However, this has let me get a pretty good look at the grants MIT gives to students.

Every admitted student with an annual family income less than 65K pays no tuition. No loans at all. For families with incomes above this level, but below either 150K or 200K (I don't remember which), annual tuition is capped at 10% of the family's annual income. To be sure, there are many families above this limit and they're often hit with the full sticker price of the tuition, but they are much more able to pay it and they also tend to be the families whose incomes have still been rising over the past few decades. And the 65K no loan limit for MIT was actually lower this year than it was a few years ago (the endowment hasn't recovered from the financial crisis yet I guess.)

I don't know much about the financial aid packages of the other schools, but I am under the impression that Harvard, Princeton, Stanford, and other schools like them have similar financial aid packages.

Posted by: zerghunter | February 4, 2011 2:31 PM | Report abuse

I agree with knoelle11, and especially with this: "States have more of a hand in defining the mission of universites while funding them less and less." In fact, this understates the situation in some cases, such as the University of Oregon. The following is from http://www.insidehighered.com/news/2011/01/17/colleges_push_for_greater_autonomy_as_state_resources_fade

"Kelly notes that universities don’t even have the flexibility to spend the tuition money they collect. If an enrollment boom leads to higher than projected tuition revenues, for instance, universities have to get permission from the Legislature to use the funds, Kelly says. On a related note, there is some precedent for the Legislature raiding university tuition reserves for other purposes."

Far too many state governments just don't recognize the importance of higher ed.

Posted by: coatesa2 | February 4, 2011 2:34 PM | Report abuse

I agree with knoelle11, and especially with this: "States have more of a hand in defining the mission of universites while funding them less and less." In fact, this understates the situation in some cases, such as the University of Oregon. The following is from http://www.insidehighered.com/news/2011/01/17/colleges_push_for_greater_autonomy_as_state_resources_fade

"Kelly notes that universities don’t even have the flexibility to spend the tuition money they collect. If an enrollment boom leads to higher than projected tuition revenues, for instance, universities have to get permission from the Legislature to use the funds, Kelly says. On a related note, there is some precedent for the Legislature raiding university tuition reserves for other purposes."

Far too many state governments just don't recognize the importance of higher ed.

Posted by: coatesa2 | February 4, 2011 2:36 PM | Report abuse

The free market has a large role in this as well. Our society seems to have declared certain 'winners' in College education and are willing to pay a premium to attend.

Penn State's main campus charges 2.5 times what Shippensburg State charges. But PSU gets an enormous number of applicants willing to pay that relatively inflated price because of a perception of competence that may or may not be 2.5 times higher.

What incentive does PSU have to lower tuition? None. When the market values Shippensburg at the same level as PSU, then either PSU's rates will come down, or (more likely) Shippensburg's will go up.

There's no large well respected Universities with declining enrollment due to excessive tuition costs.

I think the best value for building more opportunies lie in building Community Colleges, which if well managed can grow into smaller 4 year state schools or higher. JMU, CNU, GMU are all growing rapidly in numbers and prestige because of the huge number of well qualified students who can't get into UVA, W&M, even Va Tech.

Sorry, probably need some proofreading, but I'm out of time...

Posted by: JkR- | February 4, 2011 3:10 PM | Report abuse

As usual, business people haven't a clue what they're talking about when they approach education. Just use technology! Increase productivity! Deliver classes online!

This speaks of someone who views the classroom largely as a lecture (basically the only experience that can be delivered on line). Leave time in class for free wheeling, deep discussions? That requires preparation and students currently don't even want to read, let alone do a class before the class.

Students expect content to be delivered in class and nowhere else, and they expect a study guide specifying in exhaustive detail exactly what questions will be asked on the test.

I'll be the first to admit that education sector inflation is frightening. I work in a college. I see it firsthand. But it is inflating for many of the same reasons that health care is inflating -- it is essentially a handicraft industry. Just as a doctor must see each individual patient himself, thus establishing a practical upper limit on how many patients he can have in a day, a teacher must speak with each student individually. Dreaming of a one hour discussion in a 300 person lecture is idiotic.

Economists have an unsettling tendency to think that their expertise transfers to everything. It really doesn't. Just do like businesses and use technology to boost productivity? Technology is a tool in the toolbox, but it isn't the only tool nor is it always the most appropriate tool. You wouldn't try to drive a screw with a hacksaw, would you?

If knowledge doesn't exist in the room, no amount of technology will put it there. And since intelligent systems are still a pie in the sky dream, the only way to use technology to put information in the room is didactically. But didactic instruction is provably (with data! for you economists) the worst way to cause conceptual change.

I used to work in a self paced learning environment and I can tell you that the bulk of student pace themselves right down to the wire before lifting a finger. And for the best of reasons, not because all of them are lazy. They have a lot of competing demands on their time and it is easy to put off something that doesn't have an immediate deadline. But the result was that we would have students cramming every possible assessment into the last few days.

This whole post reflects an understanding of a college that doesn't exist in the real world. There are real colleges out there, with real problems, many (but not all) of which can be helped by technology.

There are ways to reduce costs for students, some technological and some otherwise. Look up the Thor Power Tools decision and its effect on textbook prices. A legislative repeal of that decision would help a lot since, in my lifetime, it alone increased textbook costs in my discipline by a factor of 10.

Much of tuition increases (though not all) is driven by state cuts in funding for universities and colleges. I'm not talking about reducing the rate of growth.

Posted by: pj_camp | February 4, 2011 7:44 PM | Report abuse

More:

I'm talking about actual cuts on a massive scale. One of my three alma maters is now approaching 10% state funding, and this is for the flagship state university. It no longer refers to itself as state supported. And largely this is done to fund tax cuts and incentives for businesses to relocate.

People who think education (or any branch of government, for that matter) should act like a business are generally businessmen who don't know what they're talking about. Education is not a business. It's aim is not profit (and in those cases where it is, it borders on fraud, which I guess qualifies as "running like a business").

Colleges are among the most creative at holding down costs. I once equipped a physics lab with 6 computers for less than $1000 (and this was in the days when a typical desktop cost over $2000). Tell me a bidnessman could do that.

Please spare us the benefit of your business genius. You're just f**king things up.

As usual.

Posted by: pj_camp | February 4, 2011 7:50 PM | Report abuse

"The way universities have to stay afloat is to attract students to attend - by playing up athletics, by building nice dorm rooms, by utilizing new technology, by offering a vast array of undergraduate services that were not available to undergrads 10 years ago. Losing tuition paying students + lack of state funding support = death to universities. And for some areas, that also means the death of small to mid-size communities. While I don't mean to argue that the so-called arms race in college amenities is a good thing, without state support, universities are forced to do things that provide operating dollars.

I'll also bet that UW faculty member mentioned in the Seattle Times article will draw in nearly $5 million (or more) in grant dollars every couple of years. A significant portion of those dollars will go to support university overhead/operating. In short, that professor will earn his or her salary in grants. That 1.2 mil plus lab costs is a one time expenditure; the grants will come every couple of years."

The second paragraph is pure speculation. For that matter, so is the first one.

If students willingly make the choice to attend expensive schools and the market truly demands it, there is no problem. Of course, demand here is fueled by foolish government interference in the marketplace.

Posted by: krazen1211 | February 4, 2011 7:51 PM | Report abuse

Beautifully written, pj. Couldn't have said it better myself.

I really do not understand what you mean by "demand here is fueled by foolish government interference in the marketplace." Please, explain.

Posted by: knoelle11 | February 4, 2011 10:52 PM | Report abuse

First, few students go to Harvard and Yale, and those that do typically make more than enough after graduation to pay off the cost, and get a fantastic return.

Second, going to three years is a horrible idea. As society advances more education becomes necessary to be highly productive, not less. We should go to five. The positive externalities make this well worth it, and it will allow us to add needed required courses in economics, civics, and personal finance, to name a few. The problems is brain dead Republicans with their sloganomics have no understanding of externalities, and wouldn’t care anyway.

Nonetheless, for the vast majority of majors/career choices a bachelor’s degree is still very high return for the money. And you can cut the costs greatly by doing the first two years at dirt cheap community colleges. For the final two years there are still major state universities that aren’t that expensive like the one I teach at, the University of Arizona.

One of the biggest externalities of a college education is that your tuition largely subsidizes high positive externality research. A big reason community colleges are so inexpensive is that you just pay for teaching, not very expensive research.

The problem is that Republicans have made it so that college financial support has withered terribly adjusting for education inflation. We have a party that not only would really like to cut college aid to zero, they’re so extreme now that I would not be surprised if secretly they’d like to cut all government spending on education to zero, K-12 included. Free market! What’s an externality? You want your child to go to school you pay for it, not the government! Third world country here we come!

Posted by: RichardHSerlin | February 4, 2011 11:03 PM | Report abuse

--*Second, going to three years is a horrible idea. [...] We should go to five.*--

Probably right. From what I can tell, it's taking colleges a full year or better to bring the majority of incoming freshmen up to college level speed, on account of the rot taking place in the k-12 government system. Might account for some of yer ever expanding costs there, too.

And wasn't there a study in the last week or so? Something about no one learning anything at all the first year or two of "higher ed"? Really shocking!

Might be time to fire a few perfessers and chop some of the fluff out of those social science programs. Know what I mean?

Posted by: msoja | February 4, 2011 11:20 PM | Report abuse

--*I hope somebody else has the answer, because I don't.*--

Funny, isn't it?

The government gets all involved promoting the American dream of home ownership, putting pressure on lenders, winks and nods at Fannie and Freddie, and the thing blows up all over the economy.

The government gets all involved in trying to get everyone in the country covered by health insurance, subsidies out the wazoo, regulations as thick as the avg. collectivist's head, winks and nods at the rampant corruption bleeding Medicare, etc., and the whole system is in perpetual crisis, ready to take whole states under.

The government gets all involved in promoting the American dream of everyone going to college to learn diversity and that coal is bad, with subsidies by the truckload and loans for everyone, and a million grants and endless dollars for every kind of research imaginable, and lo and behold it looks like *that* isn't sustainable either, costs rising through the roof and people coming out just as dumb as when they went in, and no jobs, anyway.

At what point does it begin to dawn on people that there might be a pattern to things?

Posted by: msoja | February 4, 2011 11:41 PM | Report abuse

America would have no education problem if it weren't for its job problem. I see 36k jobs were made last month, at this rate we will be at 20% unemployment, (I exaggerate) by the end of the year. At that rate, nobody can afford to be educated.

Hey Ezra, et all, how about you stop distracting people with talk about health care bills that have already passed, and education reform, and instead start talking about the millions of people out of work, where they are going to get jobs, and the failed conservative policies of the last thirty years that brought us here. After all, the only reason most people care about education, fundamentally, is because it puts food on the table -- at least it did up until generation x.

Posted by: comma1 | February 5, 2011 1:50 AM | Report abuse

The classes themselves are not that expensive to produce: the teachers cost a tiny fraction of fees (frequently even a single student's fees). Unless rents are really high for classrooms, I suspect the issue is not cost inflation.

The issue is that colleges are eating the whole increase in the premium, and eating into the slice of the premium that students retain.

Posted by: albamus | February 5, 2011 1:54 PM | Report abuse

"I really do not understand what you mean by "demand here is fueled by foolish government interference in the marketplace." Please, explain."

You claim that expensive palace dorms are necessary to attract tuition paying students.

In a normal market, expensive palace dorms would price out most potential students and colleges would be forced to provide a more cost-reasonable alternative. There would be insufficient demand for such tuition increasing construction, and it would not happen.

However, with the government supported loan industry, 18 year old chumps are flush with taxpayer cash that they otherwise would not have. This alters the demand curve for such luxuries. On top of that, other silly government policy like Title IX mandates cost increasing programs as well.

Posted by: krazen1211 | February 5, 2011 3:37 PM | Report abuse

In the early 1980's I only paid $1200/year to attend Cal state university system. I paid no more than $5000 for my B.A.

Posted by: Helen1005 | February 6, 2011 3:37 AM | Report abuse

I bet we will eventually have a food fight over higher education costs much like the one we had with healthcare costs.

Posted by: weiwentg | February 6, 2011 11:05 PM | Report abuse

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