Viewpoint: We struggle with college tuition, and we are to blame
College tuition has been increasing at a rapid rate, a development that can be seen in both public and private universities. According to the National Center for Education, in 1980 annual tuition for the average four-year public institution cost $2,250 and the average private institution cost $5,594. By 2010, those prices had risen to $15,014 and $32,790, respectively.
These price hikes are not due to inflation: $1.00 in 1980 was worth the equivalent of $2.79 today, but tuition prices of four year colleges have increased more than six-fold.
Median household income barely increased more than the rate of inflation, so tuition increases do not represent the augmented purchasing power of the average American.
“I remember looking at an infographic about how even though college tuition has been increasing, the amount of aid has also been increasing,” said Boston University student and Paste BN Collegiate Correspondent Sonia Su. “So the total amount that students pay really hasn't been increasing much at all.”
Attending the University of California at Berkley cost around $700 per year in 1970. This year, it will cost more than $15,000. In order for students to pay the same amount, Berkley would have to give the equivalent of full scholarships to 95% of students.
Colleges tout financial aid as a symbol of their benevolence. Universities portray financial aid as a gift that is given out of the goodness of their hearts. But there is another way to view this situation.
Imagine if financial aid did not exist.
The average American would not be able to send their children to private universities, even if they met the academic requirements. Even attending state schools could require taking out a loan, which often takes decades to pay off. Financial inequalities would be incredibly pronounced, and there would be massive demonstrations against the cost of tuition.
Financial aid exists because it has to exist if colleges are to continue increasing their tuition.
It is a form of "price differentiation," an economic term which means setting different prices for each individual consumer so that each pays as much as he is willing. For example, if you have two basketballs, and one person would be willing to buy one for $5 but the other would be willing to pay $7, price differentiation would allow you to sell the basketballs at different prices.
Because many view college as a necessary step to a desired career, in their minds they have little choice but to attend college. Thus, institutions force people to pay all that they can, differentiating the price with financial aid.
In a speech last January, President Barack Obama stated, “Higher education can’t be a luxury. It is an economic imperative that every family in America should be able to afford.”
Indeed, many view college as an economic necessity, as statistics show that college graduates earn considerably more income over the course of their lifetimes than those who do not attend.
College tuition has been increasing because we allow it to increase.
By continually sending in students and the associated money, we reward and fuel the cost increases. Because society views college as unavoidable, we will continue to pay this bloated tuition, even as it drives us into $1 trillion of student debt.
This is not to say that higher education is trivial. But Americans need to think of their leverage as more than the choice to buy or not to buy.
In Quebec, where yearly tuition costs $2,519, the government announced a plan to increase tuition by $1,778 over the next five years. Thousands of students took to the streets in massive and coordinated protest. In response, the government stretched the increase to a period of seven years, then declared the protest illegal, and has now started negotiations with the students. (hyperlink)
Quebec has one of the lowest tuition rates in the world because the student body is not afraid to act with more than just their purchases. The United States has the highest tuition rates in the world because we continue to complacently buy, allowing our money to act for us.
Jeremy Goldman is a Summer 2012 Paste BN Collegiate Correspondent. Learn more about him here. Reach him via e-mail at jeremy.goldman@tufts.edu
This story originally appeared on the Paste BN College blog, a news source produced for college students by student journalists. The blog closed in September of 2017.