Higher Education Bubble Update; New York Daily News Calls It a “Government-Sanctioned Racket”

The College Board released new data this week on “Trends in College Pricing” for 2010, and reported that four-year public universities raised tuition this year by 8%, almost twice the 4.5% average increase for tuition at America’s private universities. That differential follows a well-established pattern over the last decade of higher tuition increases at America’s public universities than at private schools (see the chart above). Public university tuition has increased faster than private tuition in each of the last four years, and in eight out of the last nine years, by an average of 3% per year. As the chart above shows, the trajectory of college tuition in the U.S. is on a path that makes the recent housing bubble seem like a minor historical footnote by comparison.
In assessing the College Board data, a NY Times article “As College Fees Climb, Aid Does Too” finds some “good news,” but only by reversing cause and effect:

One thought on “Higher Education Bubble Update; New York Daily News Calls It a “Government-Sanctioned Racket””

  1. The costs of public universities is certainly going up too fast and seems as though the increasing costs do not improve the benefits to the students and faculty who teach them.
    However, the typical journalistic scream of percentage increase comparisons between public and private institutions is so, well, typical. One would certainly not be surprised to see public schools rate of increase to be higher than private schools. When public institutions have costs between say $12,000 and $20,000, private schools are $40,000 to $80,000, percentage increases are not a fair measure for comparison.
    Say, an 8% increase on $12000 is $960, while a 4.5% increase on $40000 is $1800, and 8% on $20000 is $1600, while at 4.5% on $80000 is $3600. Hardly a government-sanctioned racket.
    In addition, in order to continue the assault on public education, states have been maintaining control of public educational institutions at the same time they are substantially cutting back on their presumed responsibility to financially support public schools and universities with tax dollars. That means, where possible, universities need to come up with the money through increasing tuition and add-on fees.
    Politicians, pundits, journalists! Impossible to underestimate their intelligence.

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