Why is a college education so expensive in the United States? Long gone are the days when you could relatively easily work part-time during the school term, save money from your vacation jobs, and pay your tuition from your earnings.
Why is university education in the UK becoming so expensive? Are we picking up bad habits from our American cousins? The day of the ‘grant’ for all but the financially well-off family is now a thing of the past. Grants have been replaced with student loans of one form or another. Are we sleepwalking into the US system where the caveat to access to academic excellence is squarely grounded in money?
In the States, most university staff will tell you the tale of a government whose priorities shifted not long after baby-boomers reached adulthood. Funding for higher education was slashed, forcing colleges and universities to find additional streams of income to keep the doors open and the lights on. Much of that cost, according to conventional wisdom, was shifted to the students in the form of ever-rising tuition fees.
Several half-truths in this story need explanation. The first is that the number of college-aged people across the United States has not increased very much since the tail end of the baby-boom. What has increased significantly is the percentage of those young people who are seeking post-secondary education. This is due to many factors, not the least of which are the changes in the labor market. To get a job that affords a basic middle-class income you simply must have more than a high school qualification – GCSE’s to us in the UK.
The second is that the amount of federal and state funding, per student, adjusted for inflation, has remained almost the same (Upwards of 80%) despite an increasing demand. This is like building twice as many hospitals for slightly less money per hospital and then claiming that the funding has been “slashed.”
One could argue that the increased staff necessary to accommodate a growing student body is to blame for the tuition hikes. You could even argue that the cost of maintaining state of the art research, health, and arts facilities on campus has added to the price tag. The truth is that these and similar things have contributed to the rising cost of college tuition. But the simplest, and most direct answer to this question is simple; Supply and demand.
As post-secondary education becomes a job requirement for larger and larger sections of the labour force, more and more students are opting for college after high school. However, the number of places is limited. And what do you do when you have a limited supply and growing demand, raise prices!
But, universities are not-for-profit entities? That’s true, they are. But the six, sometimes seven-figure salaries of top administrators, luxury accommodations to attract students, and ever-expanding list of amenities on campus may speak to a culture that is more corporatist than their non-profit tax status may imply. The outcome of this reality is easy to predict. Predatory lending, crippling student debt, and (yes, this is a real thing) for-profit colleges have all created a financial disaster that continues to threaten the social, economic, and political stability across the United States of America.
Why am I talking about this? Simple. It seems that the UK may be in danger of sleepwalking into the same kind of debacle with ever-increasing tuition fees, private universities offering ‘their’ alternative to students, and an economy that doesn’t always give graduates a return on investment. Gone are the days when tax paid by workers funded those services needed to ensure the educational development of the up and coming generations; which in turn repeated the process. The various governments of the day argued that it was not financially feasible to continue to fund university education in this way publicly; particularly when the same governments set an artificial target of 50% of all school leavers attending university and, covered all post-secondary establishments into universities.
We now hear rumours that financially, the student loan system is far from being cost-effective. We are also bearing witness to the frantic drive to encourage school leavers to take up one or another type of apprenticeship as an alternative to university. Can it be argued that the systematic and meteoric rise in tuition fee from £1,000 in September 1998 to the to-date figure, shy of £10,000, was a year on year attempt at forcing a square beg into a much smaller round hole?
Whilst there is good news in the willingness of the present UK Government to freeze or possibly reduce tuition fees, it is also important to learn the lesson from the United States’ student debt crisis. A student who graduates with large amounts of student debt simply is not able to fully participate in the economy. They marry and have children later in life, and can’t afford to adequately save for retirement for years, sometimes decades. They begin their adult lives with a deficit that, should the economy fail to be kind, will only grow larger.
Whether in the UK or the States, the issue of value for money when it comes to higher education is one that needs vigorous public debate. Why are Chancellors and Vice Chancellors paid such large salaries? Is there a correlation between the pay of high ranking administrators and academics and student performance? Is technology being used to reduce the student-lecturer contact time?
Ultimately, we in the UK need to decide whether university graduates are an investment by society for society, or solely a personal investment by the graduate. In reality, it is likely to be a hybrid of the two.
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Written by Dr Ambroz Neil