Well, Fuzzy, you may not be aware of this, but the people who run Harvard really arent bright at all. 
Your link seems to indicate that there are at least 30 schools with acceptance rates above 90%. Remember, we are talking about colleges in general and not just “particularly good schools.” So it looks to me like according to your own sources, there are plenty of colleges in the US who will accept just about everyone.
Then it follows that there are some colleges which could choose to cut tuition.
So what? That’s totally irrelevant to your claim since “costs of operation” is not some dollar figure brought down from Mount Sinai.
Yes, although I think it’s misleading to call it “grant and scholarship funding.” I would call it a “discount.”
I’m not sure what you mean by “microeconomics” but my assumption is that basic economics does in fact apply to college tuition. That if you increase demand, tuition can be expected to rise.
Because it’s in Harvard’s financial interest to charge sticker price to those who can afford it. Duh.
Oh, and also Harvard is well aware that if it cuts tuition by 90%, people will subconsciously start to wonder if something is wrong with Harvard.
Still doesn’t explain why even publicly funded state schools need to increase tuition.
Examples: U of California system or University of Texas or lots of other examples (by doing a simple Google search).
Note these aren’t elite private schools but publicly funded state schools.
Their tuition increases aren’t being driven by loans but by dwindling state budgets. And something tells me state legislatures aren’t going to be looking to push tuition decreases when their budgets start looking more rosy.
And those 90+% acceptance colleges? They don’t represent the vast majority of open spots. The largest schools in the country are large state universities (New York, California, Texas, Michigan, etc). Guess what? Those schools don’t accept more than 90% of applicants. Look at the enrollment figures for those schools that accept a ton of students. They don’t have very many students, and they aren’t ranked very high.
I’m not sure what your point is here. You claim that demand far exceeds supply for colleges in the US. Are you abandoning that claim?
How do you know that?
So what? Your claim is that demand far exceeds supply. If that’s true, then there should be lots of high school graduates who can’t get into any college at all. They should be beating down the doors of even low ranked schools. But that’s not what’s happening.
Again, so what? Let me ask you this: In your opinion, what percentage of American high school graduates would be unable to get into any college at all, even a low-ranked one?
There may not have been student loans in the 50s and 60s, but there was the G.I. Bill. You might remember that it gave (not loaned, but flat out gave) money to almost 8 million veteransbetween 1945 and 1956 to use for college tuition. In 1947, 49 percent of college admissions were veterans on the G.I. bill. All those subsidized students during the period you’re comparing.
By the way, the G.I. Bill also provided subsidized mortgages. That didn’t push up the cost of housing. In fact, the rise in home values actually grew more slowly during the 1950s than either the 1940s or 1960s, despite the jump in home ownership.
LOL
Nope. It’s still true. “New” universities haven’t popped up very much compared to population. But students overwhelmingly need to go to schools to make even a middle class income.
I’m hardly the only person to argue this.
State budgets? Maybe you don’t keep up with US news? This is common knowledge across the country.
Look at my links. I’ll even give a few more:
U Texas state budget leading to higher tuition: link.
U California state budget leading to higher tuition: link
Ditto Missouri: link
Michigan: link
North Carolina state manages to increase tuition “only” by the planned 6.5% because it cut department budgets and laid off workers: link
Maybe you’re not familiar with how most American college students are educated. They’re mostly (by population) educated at large public state universities, which receive significant amounts of funding via state government, meaning tuition can be limited compared to private universities.
What do you think those 90+% acceptance colleges are? Those are the low ranked schools accepting those students. Notice that not too many flagship state universities show up at 90+% acceptance rates.
Community college enrollment is at an all time high.
Note that community college fees are lower than traditional 4 year schools and supply/demand provides a good explanation for why enrollment at such institutions is outstripping the 4 year schools.
It’s not a discount because they use money from their endowment and other endowed scholarships to pay all the real costs of running the university that would otherwise have been paid by the student’s tuition. It would be a discount if they simply didn’t collect that portion of the tuition, but then they would become insolvent and all teaching and research would come to a screeching halt.
Removing student loans wouldn’t decrease demand, because kids will still need a degree to be successful. It would just make it impossible for middle class kids to afford tuition. There’d be fewer kids able to pay for school, but schools still would have massive overhead that needs to be paid for. To remain solvent, they would have to massively increase tuition for the far fewer wealthy children capable of paying, spreading out their overhead costs across a far smaller student body.
Right, but this would be the case if there was no federal student loan dollars available. In your imagination, where there are no coincident costs driving increased tuition prices, Harvard would still charge full rate to students who can afford it. All the needy students would get a ‘discount’. There’d be no incentive to drop the tuition, as you conjectured, because Harvard’s students already aren’t reliant on federal student loans and there’s been no drastic drop in tuition price.
Would Harvard forget this if there was no federal student loan dollars?
What exactly is common knowledge? That there have been cuts in state aid to public universities? That tuition at state universities have skyrocketed? That many people blame the latter on the former? I don’t dispute any of these things.
Anyway, since you brought up North Carolina, I decided to find some actual figures to see if your claim stands up to scrutiny.
First, historical tuition at NCSU:
http://www2.acs.ncsu.edu/upa/otherdata/general/tuitionhist.html
Between 1981-1982 and 2011-2012, in-state tuition and fees went from $583 to $7018. In inflation-adjusted dollars, that’s approximately a 5-fold increase.
During the same time period, North Carolina state aid for higher education went from approximately 821 million to slightly under 4 billion. In inflation adjusted dollars, that’s approximately a doubling.
http://www.osbm.state.nc.us/new_content/historical_budget_data.pdf
Perhaps I am missing something, but it seems difficult to me to attribute a five-fold increase in tuition to a decrease in state aid given that state aid actually increased substantially during the same time period.
Yet again, so what? The claim you are making is about colleges in general, not about flagship state universities.
Again my question: In your opinion, what percentage of American high school graduates would be unable to get into any college at all, even a low-ranked one?
So in your view, it is impossible for a not-for-profit organization to offer a discount for any good or service?
Every last bit of training and research? Why not just reduce operating expenses, for example by laying people off; shutting down unpopular programs; etc.?
I don’t understand this. Do you agree that removing student loans would reduce the total amount that your average student is willing and able to pay for college?
So it would be impossible for schools to reduce their expenses to the levels they were at 20 years ago?
I’m seriously skeptical of this claim. Do you have a cite?
Of course not, but Harvard can safely reduce tuition if other leading schools also do so.
How much money per student was the subsidy?
No, it is impossible for Harvard to discount its tuition by up to 100%.
Because large organizations aren’t nimble. It’s completely unrealistic to expect every college to downsize instantly. It could never happen.
No, many students would simply be unable to afford college without federal assistance.
Utterly impossible.
According to US News only 1/3rd of Harvard students borrowed any money to attend Harvard and of those, their indebtedness averaged about $10,000. A mere $2,500 a year in debt on over $200,000 in tuition and education expenses.
http://colleges.usnews.rankingsandreviews.com/best-colleges/harvard-university-2155/paying
Up to $500 per year, plus a living expense subsidy.
That would buy pretty close to a full ride at Penn(a private school) in 1950. For a state school, a veteran could basically attend for free.
I don’t understand this. Consider a not-for-profit such as a synagogue which provides services and charges money for those services. If a family membership costs $2000 per year, and for whatever reason the Schwartz family is charged only $1950 per year, then the $50 difference must come from other sources (let’s assume the endowment) to pay for the costs of running the Synagogue which would otherwise have been paid by the Schwartz family. So by your reasoning, the Schwartz family is not receiving a “discount.” Agreed?
Let’s see if I have this straight: If Harvard cut tuition by 5% across the board, the whole university would promptly fail?
And why is it that all budget cuts must be “instant”?
Ummm, this makes no sense at all. Do you understand what the word “demand” means? Let me ask you this: In year 1, there are a hundred people who are willing and able to pay $100 for service X. In year 2, there are only 50 people who are willing and able to pay $100 for service X. Do you agree that demand has dropped for service X?
Do you have any argument or evidence to back up this claim? What’s changed between 1992 and today which makes it “utterly impossible” for universities to incur expenses at 1992 levels (adjusted for inflation of course)?
If the claim is that only a small percentage of Harvard’s tuition receipts come from student loans, I would agree with you.
That’s far less than the amount of aid available today if you compare the minimum wage in 1950 to the minimum wage today.
Irrelevant. $500 per year for tuition plus an additional subsidy for room and board would pay the entire cost at state universities and a large part even at expensive private schools like Penn and Harvard.
Your assertion was that federal student loans simply allow colleges to increase tuition. Your argument was that there was much less aid in the 50s and 60s and tuition was low. Your facts are wrong. In fact, the post-WW2 decade saw a higher level of federal spending on education than anytime before or since.
There was a huge amount of aid during that era. It was called the GI Bill. It was so generous that many students had virtually all their higher education costs paid for by the government. Colleges did not respond to this huge influx of federal money by hiking tuition.
If you want to argue that the Student Loan program is inefficient, or wasteful or whatever point you’re trying to make, don’t use the 1950s as your benchmark. The sudden influx of students - who prior to then would have had no reasonable hope of ever getting a college education - and the vast amount of federal funding used to pay their tuition, makes that era an invalid comparison.
Because tuition was very low then. Duh.
Lol, you are using the low tuition itself as your measuring stick. That makes no sense at all.
The fact is that in inflation-adjusted dollars, there is far more money available now both in terms of amount of money per student and in terms of the percentage of students who qualify for the money, as compared to the 1950s and 60s. Do you dispute this?
Are you asserting that all of this aid was distributed in the form of loans and tuition grants? Because if not, it’s completely irrelevant to this discussion.
As a side note, the University of Pennsylvania raised tuition by 18% in nominal dollars in 1946; 15% in nominal dollars in 1947; and 9% in nominal dollars in 1948. (I picked Penn because its historical tuition figures are easily accessible.) That’s a rather large increase right at the time American colleges were being flooded with GI Bill students. Agreed?
That’s why.
Most Universities are operated by government or non-profits. I’m not sure where greed comes into play, unless your point is that “administrators” raise tuition so that they can raise administrators’ salaries.
Government subsidies of many Universities have fallen significantly over the last 40 years. This is a major reason for tuition increases. And, I think school fees often include health care, whose pricing has outpaced inflation.
One sees this simplistic argument (“Prices rise due to greed”) all too often. More often, prices are such that you more-or-less “get what you pay for.” Professor salaries are probably the biggest single expense of universities. Are you advocating lower salaries, brazil84? Higher Student-teacher ratios? I hope not less research as, UIAM, government subsidies to public universities are still enough to cover that.
Politicians who seem to argue that abolishing the $71 billion DOE would result in $71 billion of taxpayer savings with no downside are pandering only to those who are almost frighteningly deluded.
Probably that’s a factor, yes. Also, there is an institutional greed at work. Universities like most other organizations prefer to have more money to less. Why else would Harvard constantly call up its alumni to ask for money?
I’m skeptical of this claim. I actually checked the numbers as best I could for North Carolina State University and the claim did not stand up to scrutiny.
Do you have any actual numbers (with sources) for the last 40 years to support your claim?
Again, do you have any actual numbers to back up this claim?
In that case, why is Harvard’s tuition almost exactly equal to that of Vanderbilt? In fact, why is it that pretty much all of the colleges in the top 20 charge tuitions which are very close to eachother despite wide differences in locations and endowment levels?
I’m skeptical of this claim too, depending on how you break up expenses. For example, according to its web site Stanford has approximately 2000 faculty members. Generously assuming that each one gets $150,000 a year in wages and benefits, that’s a total salary expense of approximately $300 million per year. At the same time Stanford’s budget is approximately $3.7 billion per year. A salary expense of about 8 percent.
Not across the board; I would bring salaries closer to the way they were 20 or 30 years ago. As far as I know, that means modest or no reductions for most faculty but big cuts for some.