Why is college so expensive?
Omkar Kendale
The one thing that many people dread about going to college are student loan debts. There are countless stories of students graduating from college and 10 years later, they are still paying off student loans. The average amount a student owes is $32,731. In addition, there are a total of 44.7 million people in the US who currently have student loan debt. Student loans are not something anyone would want to do, but unless you get a good scholarship or are able to pay it off immediately, you have no choice but to take in student loans and the debt that comes with it. This brings up the question of why is college so expensive? What costs do colleges incur that force you to pay upwards of $10,000 per year for a college education? The answer is a reduction in state funding, the costs of faculty and staff and mainly, a higher demand to go to college.
Colleges were a lot more affordable in the late 1900’s. However, since then the state has been reducing the amount of funding they give to colleges. According to businessinsider.com, “In the 2015-16 school year, appropriations — money given to a school by the government — per full-time enrolled student were 11% lower than 10 years before, when adjusted for inflation.” Colleges aren’t getting as much as they used to. Naturally, colleges aren’t going to just accept this lack of money; they’re going to find a way to accommodate and work around it. Unfortunately for students, this means price increases in tuition. Before funding cuts, college expenditures were at a certain level. Collections from students and the government helped to offset these expenditures. However, when one of those money sources decreases (funding), colleges are forced to increase the other source to ensure they don’t create a deficit and go into debt. The end product of this is higher college prices.
Another big portion of college expenses come from faculty and staff. With the amount of student services and courses offered, colleges need a lot of people to fill these roles. The average student to staff ratio at colleges is 18:1. That is a lot of staff and paying those staff is very expensive. However, it’s not only the salaries of staff that are increasing. According to the seattle times, additional hiring benefits such as medical plans and retirement funds are raising costs as well. There are also other costs that colleges have to pay such as things like buildings, stadiums, and scholarships. However, none of these costs add up to more than the cost of paying staff. With the amount of staff being so high, colleges are faced with two options to compensate: either reduce the amount of staff or raise tuition prices. Most colleges choose the price increase route and it is reflected in the students debt.
Although reduced funding and staff certainly play a big role, the demand for college is the main factor that causes prices to be so high. In 2000, there were 13.2 million college students. That is significantly lower than the 19.7 million college students in 2020. According to USA today, tuition for a public college was on average $12,310 in 2000. In 2018, that number was raised to $21,370. So why do prices increase as demand for college increases? The supply and demand curve shows why. The demand shift is illustrated with the second demand curve. If you look at the equilibrium price of the first curve (P1) and the equilibrium price of the second curve (P2). You will see that the price of the second curve, when demand was increased, is higher than the original curve. So, as demand for college increases as it did from 2000 to 2020, prices will also increase.
The biggest causes of high expenses for colleges can be broken down to a reduction in state funding, a large amount of staff, and a higher demand for college. This is why college is so expensive. As more and more students go into debt, it is important for colleges to look at how they can reduce costs and in turn reduce the amount of debt students are forced to take on. Although colleges want to bring in as much money as possible, it will eventually get to the point where the majority of students just don’t see a college degree as worth the debt. Some possible solutions to lower student debt include getting more government assistance and possibly switching to more online classes. However, until something is done, students will be forced to take on a debt that they will be paying for a good amount of their lives if they want to go to college.
Works Cited
Campus Explorer, www.campusexplorer.com/college-advice-tips/BFDD4D28/High-School-Junior-Timeline-and-Checklist/.
Friedman, Zack. “Student Loan Debt Statistics In 2020: A Record $1.6 Trillion.” Forbes, Forbes Magazine, 5 Feb. 2020, www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics/#595360a281fe.
Hoffower, Hillary. “College Is More Expensive than It's Ever Been, and the 5 Reasons Why Suggest It's Only Going to Get Worse.” Business Insider, Business Insider, 26 June 2019, www.businessinsider.com/why-is-college-so-expensive-2018-4#:~:text=College is expensive for many,years ago, one expert said.
“How Much Does College Cost?” CollegeData, www.collegedata.com/en/pay-your-way/college-sticker-shock/how-much-does-college-cost/whats-the-price-tag-for-a-college-education/#:~:text=In 2019-2020, the average,out-of-state residents).
Long, Katherine. “How Staff Benefits and Student Services Drive up College Tuition.” The Seattle Times, The Seattle Times Company, 14 Feb. 2014, www.seattletimes.com/education-lab/how-staff-benefits-and-student-services-drive-up-college-tuition/.
Sauter, Michael B. “Here's the Average Cost of College Tuition Every Year since 1971.” USA Today, Gannett Satellite Information Network, 18 May 2019, www.usatoday.com/story/money/2019/05/18/cost-of-college-the-year-you-were-born/39479153/.
When I was done reading your writing piece a whole lot of thoughts came into my head at once. One of them was that okay college is expensive now then when it was back in the 90's. This also brings up the question while this ever go done in the future or will it continue to get bigger and bigger to the point to where some people who can't afford to go to college because they don't have the money that is need for to pay for college.
ReplyDeleteNice job looking at many different aspects of why college is expensive. When we all think about the expenses of college, the numbers are daunting. However, I didn’t realize that college was so expensive because of a basic concept learned in class (demand curve). In addition, I am curious about why funding is so low or public colleges. One would think that college funding would be an investment to boost the economy and to create a more skilled workforce, therefore I am confused on why the goal isn’t to keep college funding constant from year to year.
ReplyDeleteFirst of all, I thought that your piece really helped me understand why college is super expensive and I didn't know why until I read this. Another thing that I liked was how you had the price-quantity diagram and that really helped me understand that the more people who want to go to college the more the price will be. I also thought that you had a lot of good facts to show how college is more expensive now than earlier and I thought that those facts were very helpful in my understanding of it. To ad to your piece, I think that college is also more expensive because their is a higher standard of living in college and in the older days college was a lot less nicer and the buildings now seem like they are better taken care of and that could contribute to the high cost of it. Overall, I think that you did a great job on this piece and it helped me understand how college was very expensive and I gained a lot from reading this.
ReplyDeleteWhile college can create a large amount of debt from loans, most adults are able to repay them once they are out of college and have a higher paying job, which is easier to find now that they have their degree. Not only that, but there are solutions to some of the payment problems, such as digital books and loaning libraries that loan out the students required books for less than they would purchase it for. In addition to solutions to pay for things such as meal plans, books, and room and board, of the overall tuition, it could be paid back in a quicker fashion if the student learns to properly invest and save.
ReplyDeleteWhen you really think about it, colleges are an interesting and sometimes forgotten part of our constantly fluctuating economy. In a way, they have some kind of an effect on almost every aspect of our economy, as they grow our younger generations into capable workers that promote the next generation of economic growth and financial stability. Because of this, it is important to keep both the price levels and demand levels of college stable. In that case, why are college prices continuing to rise? Sure, it is due to increased demand for college and decreased government funding, but why? Why is the government decreasing its funding for colleges?
ReplyDeleteIn my eyes, the gateway to a continuously prospering and stable economy lies in how we respond to these college demand and price changes. We, as a country, need to do our best to keep these prices low, as decreased demand for college as a result of high prices could spell disaster for the entire economy. At the end of the day, there are always going to be expenses associated with college, and certain students who forego those expenses. But, for the average person, college needs to have an immense amount of incentive, as it is the building block for the fulfillment of our next generation’s American Dream, and the sooner we realize that, the better off our country and economy will be.
I find it very interesting how in the past 30 or so years the expectations for college tuition has changed drastically. My parents tell me stories about when they were in college and their tuition was only a couple hundred dollars. Although I am not sure if that is an exaggeration, the price my parents paid for college will be much different than the price I will have to pay. I didn’t realize that colleges were receiving so much less funding than they did before. Hopefully the price of college doesn’t continue to get higher in the future. While I have been applying to colleges, one of my main factors is affordability. Out of state tuition is much higher! Sometimes the best deal you can get is in state or reciprocity from other nearby states. Overall, colleges help our nation to have a skilled workforce so lowering tuition costs would allow for more people to have the opportunity for a high level of education.
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ReplyDeletethis post speaks with what the public thinks about college. whenever i talk about college with my parents or freinds it is always well how are you going to afford it ? but i never knew exactly why it was so expensive thanks for your insight. but i really do think that college should be a little bit cheaper because people nowadays are not even going to college and highschool is just thinking thats going to be our pathaway for future life. its all going to change i feel like
ReplyDeleteThe thing that I don't really understand about college prices going up is the necessity of needed a degree in today's world to advance in society. College is quite literally the last stepping stone you really need to get on to having a successful life. And as prices increase they make that stone smaller and smaller and less people are going to want to go to college. The price gouging that is happening here makes some sense with supply and demand principals but if the government wants to see a generation of people not be able to get a career with a degree then it needs to act fast or millions will be left behind. I don't think college being free is a good idea because it is a business but at least help to regulate it so people can reasonably afford it. Overall great read, thank you for sharing this.
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