My tuition to the University of Texas at Austin from '87-'93 cost somewhere on the order of $5000. I understand it’s gone up quite a bit since then. Where does that money go? Similarly, where does the money from their football program go? How about the juice from their endowment?
Thanks,
Rob
Here is everything you want to know about the University of Texas budget for 2012:
Surprisingly, tution and fees are only about 10% of total revenues for the university.
Hospitals and clinics plus research are the biggest expenses totaling about 40% of the budget collectively.
In short there are a few reasons:
Cost Disease: Labor intensive fields cannot keep pace with other industries which can utilize technology more effectively, yet the have to pay competitive rates
While the sticker price has gone up dramatically, the price most people actually pay has not risen anywhere near that amount. For example, the sticker price at Harvard is around 55k, but average cost of attendance is only about half that.
Schools do more these days. They are expected to not only education, but train them for highly specialized, complex jobs. They also
They have to compete for quality students.
People have the money to spend since loans are widely available. This impacts some schools more than others.
Read Harvard Envy: Why Too Many Colleges Overshoot by Andrew Rosen. In a nutshell, universities are in a competition to be seen as elite as the Ivy League schools (even those that are clearly not) and are overextended in both research effort and campus expansion/annexation in order to increase perceived prestige.
Stranger
For state universities, when legislatures want to cut their budgets, increasing tuition is one of the easiest ways, since it hits those getting the benefit, fees are still low compared to competitive private colleges, and it is much easier than firing people. The University of California system has increased the number of out of state admissions, because they pay more money for the same slot as an in-state student
My understanding is that, per student, there is about 5 times the number of administrative people in colleges nowadays compared to 40 years ago. Per student, the number of professors has not gone up.
So basically, bureaucratic bloat. Same as the government, really.
Simply, because even at the higher prices, they still have no problem finding buyers. A college degree is considered essential to a successful career these days in a way that it wasn’t in the past, so people are willing to spend big bucks to get one.
You can talk about costs going up, and they are, but colleges are under no pressure at all to try to cut costs until the price required to cover those costs gets large enough that they stop being able to fill seats.