With Wishes Of 'Good Luck' from Paul Krugman...

A professor at one of the most expensive universities in America comes out in favor of more government support for higher education.  Waddya expect from a former Enron adviser?

But the innumeracy here is troubling:

For the past couple of generations, choosing a less expensive school has generally meant going to a public university rather than a private university. But these days, public higher education is very much under siege, facing even harsher budget cuts than the rest of the public sector. Adjusted for inflation, state support for higher education has fallen 12 percent over the past five years, even as the number of students has continued to rise; in California, support is down by 20 percent.

One result has been soaring fees. Inflation-adjusted tuition at public four-year colleges has risen by more than 70 percent over the past decade. So good luck on finding that college “that has a little lower price.”

Is Krugman that dumb or does he think his readers are (I deplore these false choices - "Both" might be the answer!).

Do people really comparison-shop by reviewing price hikes over the past decade?  One might have thought that the current price was even more relevant than the inflation-adjusted history.

So let's run this graphic from the College Guide comparing public and private tuitions and costs:

These are averages not adjusted for financial aid, but the in-state four year institutions cost about $8,244; the average private four-year school is $28,500.

Yike.  Good luck finding a state school that is more expensive than the private schools.

SINCE YOU ASKED:

Let's compare Rutgers and Princeton for a Jersey boy (or girl!).

Rutgers is $10k for tuition, $11k for room & board, and $3k for fees, totalling $24k.

Princeton is $39k for tuition, $13k for room & board and $3k for this and that, totalling $55k.

Well, that is for anyone who has to pay retail.

 

Comments

[NK]

TomM--

I have a message here for you from Herr Doktor Krugman -- it reads:

"Subsidies for me, taxes for Thee!!!"

PS: someone has to pay for the fine LAX team at Old Princeton!

[bgates]

I renew my call for federal CAFE (Cap All Fees in Education) standards to first limit and then steadily decrease the cost of higher education in this country. Congress feels competent to tell engineers how much the latest advances in materials science, aerodynamics, and engine design will translate into greater fuel efficiency; surely if they can do that they can tell colleges to quit hiking tuition.

Besides being the right thing to do, a Republican proposal to halt the increase in student debt would make two important Dem constituencies into mortal enemies. Couple CAFE with new copyright law - I'm thinking a limit of 14 years or $14 million in sales, whichever comes first - and we win the college vote by cutting two of the most vocally anti-American Dem constituencies off at the knees.

[Clarice]

You're so clever bgates. I think you should write a whole piece on this but since you won't I'll blog this over at PJM.

[clb72]

Excellent point. We need publicly funded universities to keep college costs down. Hopefully state budgets will recover and states will continue their commitment to funding an affordable college education to their residents.

I don't think price caps are the answer though, bgates. This ain't Russia, after all.

[Ignatz]

It's self evident you haven't had the bgates experience previously clb.

[AliceH]

Given the effort to commoditize a college degree, why not roll Public Universities in with other Utilities, requiring them to go thru those PIRGatories to make any rate changes, or add any new fees? Just a thought.

[NK]

AliceH@1:53-- excellent notion. And ban tenure at State U as an undemocratic perq, and mandate time sheets from faculty. That ought to make the Lefty faculty see some of the real world.

[matt]

There has been no analysis of the soaring costs of education of which I am aware. Is it capital expenditures? salary costs? Insurance?

In short, how does the increase in tuitions relate to the increase in educational costs?

The same education I received in the mid-70's for $2,000/year now costs $45,000/year, a 2,200% increase. What is the justification? Lab fees?

[Ignatz]

--In short, how does the increase in tuitions relate to the increase in educational costs?--

Only modestly.
Mostly it relates to a huge pot of cheap government money distorting the market.

[Ranger]

Mostly it relates to a huge pot of cheap government money distorting the market.

That has, in turn, produced a dramatic over investment in fixed capital investments (new construction) and non-academic professional employees (along with a significant bump up in pay for all Higher Education employees).

[Thomas Collins]

Simple solution. Higher educational institutions change their name to Solyndra College, Volt University, Windmill School of Technology, and the like. The funds will come rolling in, and Congress will enact a refundable tax credit equal to 120 percent of the cost of tuition, room and board (and contraceptives, of course).

[AliceH]

It's also due to swelling administrative personnel staff and salaries. I forget the exact numbers, but there are charts around plotting tuition costs over time (steep slope) with ratio of non-teaching staff to total staff (way way steeper slope).

Government gives you money -
step 1 Raises all around!
Step 2: Hire more people
Step 3 Raises all around!

[Boatbuilder]

When you subsidize something, the price increases. The geniuses (or liars) in higher ed have the solution--more subsidies!
And if you have been to any college or university recently--public or private--the level of new construction is stunning.

[JorgXMcKie]

The number of administrators [especially highly paid ones] has risen dramatically over the past 3 decades.

[Ignatz]

--That has, in turn, produced a dramatic over investment in fixed capital investments (new construction) and non-academic professional employees (along with a significant bump up in pay for all Higher Education employees).--

Just like the housing bubble we see the symptoms [gold plated campuses, McMansions] but the underlying cause without which the symptoms could not exist in the first place is the harder to detect giant pot of free money.

[Porchlight]

Students' expections in terms of standard of living has also increased dramatically. It used to be understood that even at elite institutions, college living was spartan. Now dorms, food, and recreational facilities are all quite luxurious in comparison. And if you don't have those perks you can't compete with other schools.

[Porchlight]

expections s/b expectations

[Thomas Collins]

Porchlight, I have to plead guilty as to being a spoiled student re food. I was a commuter, so I wasn't required to have a meal contract. I tried the dining hall (called the "Ratty") and decided that when I was on campus, I would indulge myself by eating at local hotspots (there was a sandwich place on campus called "The Gate" that was good) or would bring my own food from home. It amused me that kids whose families' net worth was probably greater than several generations of my family's net worth put up with that slop. Substantially all of my fellow commuters, who also tended to be on the lower end of the family wealth scale, felt exactly as I did. So I guess I can't criticize today's students for wanting decent food. :-))

[jimmyk]

Students' expections in terms of standard of living has also increased dramatically.

To be fair, our overall standard of living has increased dramatically (at least until the last few years, so it's not unreasonable for it to be higher on campus as well.

The government's involvement in student loans has undoubtedly pushed up costs as it did in the housing market. But there are other reasons too. The technology hasn't really progressed--see Baumol's cost disease. That could change over the next decade.

[Jim]

When I graduated my annual college tuition in a private college was less than 20% of the starting salary for my first job. In fact, my 5 years of college cost me less than my first year salary. Because I attended a co-op university I was able to pay for most of my tuition through the income from my co-op job and part time work while I was in school.

I pity kids today with the exorbitant tuition and fees and wonder how someone taking sociology courses or other basket weaving type programs will ever pay off their loans.

[jimmyk]

Jim, that's the kicker: What's really being subsidized by the student loans are the worthless "gender studies" and other fluffy things that have proliferated. People in the sciences, engineering, and (dare I say) harder social sciences like economics can get their money's worth.

[Tom Maguire]

CAFE? We need CAFE Latte, which stands for Cap All Fees in Education, uhh, Leadership, and Taxes, Tuition, hmm, Excellence! Or maybe that is Leadership and Total Teaching Excitement. Yeah, we need leadership. And excellence. Or excitement.

Now I am working on Mocha Decaf.

[NK]

OK TM-- we get it -- you don't like tuition bills. But what do you think of the ISDA call on CDS defaults for $3B Greek Bonds, has the world ended?

[David Davenport]

A professor at one of the most expensive universities in America comes out in favor of more government support for higher education. Waddya expect from a former Enron adviser? ...

I read somewhere that Krugman's NY Times column is ghost written.

[cathyf]

I'll take this opportunity to announce that WonderBoy got a fat letter from Notre Dame today.

But as someone right in the midst of the whole process... The price of Princeton (tuition, room, board) for us po' folks is about $3,000/year. U of I, on the other hand, comes in at about $25,000. Ok, he will get the $1,000 for coming in 2nd in State WYSE Challenge last year, so $24K...

Number one piece of advice for college seniors out there: go for the schools with the big endowments!

[cathyf]

...except that was high school seniors...