College Cost Increases Exceed Inflation as Endowments Drop, Spending Slows

[marmar]

Private U.S. College Tuition Rises Most in 21 Years (Update2)
By Janet Frankston Lorin


Oct. 20 (Bloomberg) -- Tuition and fees at private four- year colleges in the U.S. rose the most in 21 years, when adjusted for inflation.

Prices rose by an average of 4.4 percent at private four- year colleges in the U.S., to $26,273 for the 2009-2010 school year, compared with 5.9 percent the previous year, according to a report released today by the New York-based College Board. Using inflation-adjusted numbers, this year’s increase was 6.6 percent, the largest since 1988-89, when it was 9.1 percent. That year, tuition and fees were $14,546, in inflation-adjusted dollars, the report said.

Tuition increases, set earlier in the year, exceeded inflation as endowments declined in value and public colleges reduced budgets because of state funding cuts, said Sandy Baum, an economist and senior policy adviser at the College Board.

“Certainly there hasn’t been enough movement in finding really innovative ways of doing things,” Baum said. “That’s what they’re going to have to do to turn this around. This is not something they can do in a few months.”

‘Not Like Companies’

Schools also increased their financial aid budgets and haven’t required professors to add more to their teaching load, which compounded their difficulties, she said. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20603037&sid=arCKwdxcVaoc

[DJ13]

1. Maybe if the colleges hadnt made risky investments they would still

have more money than they could ever use and their students wouldnt have to pay out the ass?

[mistertrickster]

2. This is a steaming pile of horse sh!t. Tuition is going up. College costs are NOT going up.

So why is tuition going up when college budgets are not going up?

One simple reason--state legislators are cutting funds. And the feds have replaced grants and direct funding with loans.

I calculate that tuition costs are up about 3 times from when I was in college in the mid-70's. And all of that increase is coming from screwing the kids to help the rich stay rich.

[frazzled]

4. College costs are not going up?

The cost of providing health insurance (plus other benefits, like disability insurance, etc.) to employees, from professors to staff to janitors, goes up every year, as in the rest of the business sector.
The cost of space goes up ... whether necessary renovations or new construction.
The cost of salaries goes up ... well, except for all the professors who have currently had their salaries frozen for the second year now.
The cost of everything goes up annually ... equipment (yes, colleges and universities need to buy equipment, for laboratories, new media studios, etc.), travel, food services, health services, everything.

So you're wrong there that the cost of doing business for colleges and universities has not gone up.
Aside from university presidents and sometimes provosts, college professors are not getting "rich" off your kids. Nobody is getting rich off of this. It's an increasingly expensive enterprise.

Tuition covers at most 1/3 to 1/2 of a college's expenses: the rest must be made up from endowment income, giving, grants.

[mistertrickster]

5. Yes, I agree that college costs go up. But not at 5 times the rate of inflation like tuition has.

You're also right that tuition only covers part of the college's budget. But most of the rest comes from taxpayers at state schools.

That was exactly my point. Instead of raising taxes to cover rising costs, the state and fed gov't impose more cost on students by raising tuition.

(The ivies are in a class by themselves. Because of their huge endowments (billions), they actually don't need to charge tuition but do anyway just to prove how exclusive they are. Bastids.)

[Statistical]

6. Real estate prices are falling, cap ex prices are falling, and salaries are flat.

So why is College going up at 5x the rate of inflation?

[aikoaiko]

3. Obligatory post: State college tuition and fees are free in GA if your graduate from

a GA high school with a GPA=>3.0. Its called the Hope Scholarship. You can even move to GA, pay for the first year and get the last 3 for free if you have a college GPA => 3.0.


Come to Georgia my fellow DUers. I'll take you shooting if you come to my college.

[Phoebe Loosinhouse]

7. That is a great policy. Good for Georgia. nt

[aikoaiko]

9. Its something we do that is truly progressive.

Sadly, too many of our students don't meet the criteria or drop below the required maintenance GPA.

[raccoon]

8. The rank and file aren't getting it, I can tell you.

But I guess my fellow DU'ers figured that.