No, they’re not the problem. They may be one factor, but all of the factors listed by Fretful Porpentine are valid.
I think you are limiting your mention to Undergraduate Stafford Loans for someone claimed as a dependent. For someone who is not claimed as a dependent - financially independent - the amounts can be higher. And for Graduate school, those amounts are higher still.
I’m assuming the bolded section is some sort of sarcasm, but it still doesn’t make sense. Huh?
In 1971, an entering freshman at Harvard College could expect total costs for the school year (including room and board) to be about $6200. By 1974, this had risen to about $6600. Total cost to earn a BA was about $25,400 for the whole four years.
Very typical each year for a middle- or lower-class student would be a $1200 scholarship, a guaranteed student job for $1800, and a student loan for the balance that the family/student could not afford to pay themselves. Many of the student loans were for $1000 to $1500 per year. One of my friends graduated with total student loans of $4500, which he was able to pay off in four years.
Very different times.
I agree with this. When I went thirty years ago, one year we were told that something like 27% of the tuition amount went to scholarships. That sounded silly to us, since most of were on scholarships provided by the university. But it lets the school shift money from the kids whose parents were rich enough to afford the whole thing to those of us who needed assistance. (And by the way, every year when they announced the tuition increase, they always mentioned how it compared to our “peer institutions”. So it’s almost an arms race.)
In my experience, the majority of those who go to college the traditional way (right after high school) are dependents, and far from financially independent. But I also realize that many students are attending college as independent adults.
No. Student loans are the problem. The factors listed are simply the side effect of colleges having money to blow.
Even number 4 - less government support - is a feedback loop. As students are able to provide more money, the state feels it does not need to provide the same level of funding.
That means a 4-year degree is limited to $27,000. Funny, every complaint from the victims of student loans discusses numbers far higher than this.
Those people are getting loans from private lenders, outside the government-subsidized system.
I suspect the reason is that tuition hikes are always the most politically painless way for a university to make financial ends meet - politically as in, internal politics within the administration.
Administrator: “Our expenses will surpass our revenue. We need to do something. We need to cut our spending somewhere.”
HR: “Don’t cut our budget, cut someone else’s!”
Academics: “Don’t cut our budget, cut someone else’s!”
Maintenance/facilities: “Don’t cut our budget, cut someone else’s!”
Student assistance: “Don’t cut our budget, cut someone else’s!”
Faculty: “Don’t cut our budget, cut someone else’s!”
Athletics: “Don’t cut our budget, cut someone else’s!”
Research: “Don’t cut our budget, cut someone else’s!”
Special programs: “Don’t cut our budget, cut someone else’s!”
Arts/humanities: “Don’t cut our budget, cut someone else’s!”
STEM: “Don’t cut our budget, cut someone else’s!”
Administrator: “OK, since nobody wants to cut their budget, we’ll just increase tuition by another $100/credit hour this upcoming year, how about that?”
** Thunderous applause/cheers all around **
One major factor has not yet been covered. Everybody talks only about operating expenses and not about capital expenditures. Capital expenses include everything from buying a new desk and a computer to replacing the entire campus’ electrical system.
Major universities have enormous capital expenses, because they have to expand and build from scratch every year. All of them are taking in more students, offering more courses in more disciplines, and financing state-of-the-art research facilities. Think of the millions involved in building, filling, and maintaining dorms and classrooms, hospitals, athletic facilities, parking and roadways, theaters, galleries, and enough infrastructure to house a city of up 100,000 people. Gone are the buys when a million could build your whole quadrangle. I’ll bet the price of a new chemistry building has risen faster than even tuition.
Looking at the history of state funding for the University of Missouri, it actually hit its peak in 2002, and except for a couple of years where there were single-year special funds, it’s never been that high again.
Looking further back (the records go to 1988) there were multiple years where state funding was either reduced or flat. That’s in real dollars, not taking inflation into account.
I would also add that when I was at Missouri in the 1970’s, few classrooms and no dorms were air-conditioned. Dorm rooms also didn’t have carpeting, telephones or TV hookups. There were no personal computers and not all departments were fully computerized – in fact, when I first got there, students registered for classes by standing in line and literally signing up for each individual class. If a class was filled before you got to that table and you couldn’t beg your way in, you were out of luck, so you had to strategize which classes would fill up fastest and try for them first. The campus wasn’t designed for cars and the only authorized student parking was at the stadium on non-football days.
Try and attract ANY student these days with that lack of amenities.
Moved to Great Debates.
Colibri
General Questions Moderator
The University of California budget is posted here:
https://www.universityofcalifornia.edu/press-room/budget
Revenue Sources:
27% Medical Centers (our hospitals make money)
19% “Other sales, services & auxiliaries”
18% Government contracts and grants
7% Private support
2% Other Srouces
Then, in the so-called “Core Funds” which make the remaining 27%
- 13% student fees
- 3% UC General Funds
- 11% State General funds
So that 11% from the State used to be higher.
and
In 1992 the tuition at UC was almost $5,000. Of that the State contributed $3900. Next year UC will charge $15,000 and the state will pay $5850. If tuition had merely increased by inflation it would be $7,555 and state funding would have gone from paying 78% in 1990 to 77.4% in 2018.
The problem is out of control spending, not lack of state support.
This is confusing cause and effect. It would be like saying the reason Oracle charges so much for its software is that it need to have high prices to pay for Larry Ellison’s yacht. Universities are awash in money and they don’t have shareholders so the money has to go somewhere. Since administrators are deciding how to spend the money it goes toward more and higher payed administrators.
I was on a University Board and it drove me crazy that when the administration came in for the annual “time to raise tuition” talk, it was always based on what our competition was charging. There was no discussion (until I repeatedly asked) about the relationship between the cost of providing an education and the amount we were going to charge. I am not sure they even knew how much it cost to get a student through a particular program. Tuition rates were thought of as more a marketing question than an accounting one.
Let me ask, if student loans suddenly were made unavailable, or capped at, say, a lifetime limit of $30,000 from all sources, what do you think would happen?
a) Schools would decrease tuition to make college affordable for more students
b) Government and private foundations would increase funding to close the gap
c) Post-secondary education would collapse to its pre-WW2 level of about 5% of Americans.
Given that both public and private universities are seeing this rate of increase, pretty much universally, maybe the cause is not just “out of control spending.” Several people have given reasons.
And $15K is dirt cheap for a Cal or UCLA education.
Bingo. You think the universities care where the money comes from?
A and b.
Good point, but I think the not best and not brightest will drop out first. The best will probably get good enough jobs to pay for it, but someone in a third rate college because a degree is a must have is not going to get a high enough paying job to pay it off. And third rate colleges often charge much as top colleges (and more than public ones) because tuition is a signal for quality.
The ads will highlight their one or two somewhat well known professors, their facilities, and that they are rated #1 in basket weaving. Naive parents and kids won’t see through this.