The real reason college is so expensive

Elena Scotti/FUSION

College is becoming more expensive. That much is undeniable. So is the fact that student debt in this country has ballooned beyond a trillion dollars as those who see college as a path to economic success take out loans to pay for it.

But what's fueling the rise in tuition?

A new report from Demos, a left-leaning think tank, hits back at the idea that ballooning administrative costs are to blame and points instead to a decline in state funding as the culprit. The report looks at public institutions, which make up 72 percent of all degree-granting colleges.


State funding per student for higher education, the report says, has dropped 22 percent over the past decade, with 2012 clocking the lowest per-student expenditure in the last three decades. Between 2001 and 2011, the report argues, the decline in state support accounted for nearly four-fifths of tuition increases at public research universities.

Yet others say out-of-control administrative costs, the increased availability of loans and even the construction of campus amenities like climbing walls to attract the best students, are to blame.

As Paul Campos, a law professor at the University of Colorado, Boulder wrote in The New York Times recently, "a major factor driving increasing costs is the constant expansion of university administration."


But Demos says administrative costs accounted for just six percent of the increase and loan aid and construction had negligible effects.


"Large tuition increases, coupled with slow spending growth, suggest that the cause(s) must be on the revenue side of the balance sheet," writes report author Robert Hiltonsmith.

The chief financial officer for one of the largest public university systems in the country, the University of California, agrees. In a letter to the editor responding to Campos's assertions about administrative bloat, he wrote, "I disagree. The State of California, for example, funds the University of California system at the same level as it did in 1999 — even though today we enroll 83,000 more students and have one more campus."


So does a recent report from the Government Accountability Office, which found that median tuition increased 55 percent at public colleges while state funding declined by 12 percent between 2003 and 2012.

In 2001, according to Demos, tuition accounted for only around 35 percent of university spending. In 2011, it accounted for more than half.


"[P]ublic higher education in this country no longer exists," writes Hiltonsmith. "Because more than half of core educational expenses at 'public' 4-year universities are now funded through tuition, a private source of capital, they have effectively become subsidized private institutions."


While higher education spending used to fluctuate with the economy and tanked during the recession, it has not rebounded as the economy regains strength.

Demos argues that college is a necessity and should receive enough government support that middle- and working-class students can earn a degree "without mortgaging their future."


Emily DeRuy is a Washington, D.C.-based associate editor, covering education, reproductive rights, and inequality. A San Francisco native, she enjoys Giants baseball and misses Philz terribly.

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