In a piece published earlier this year, Forbes contributor Derek Newton would like us to believe that attending college today really is less expensive than it used to be. Unfortunately, Newton is very much off-base, especially if we focus on the financial fates of the three-quarters of students who attend public institutions.
The College Board tells us that the “net price” paid by an in-state student at a four-year public institution -- after deducting any grants students have received, but not loans they must pay back -- rose 34.9 percent over the past decade. That’s after inflation. This was an annual rate of growth that exceeded the rise in the Consumer Price Index by 3.04 percent. If we add room and board to the equation, then costs rose “only” 2.46 percent more rapidly than the Consumer Price Index.
Ask how many hours a typical American employee must work to pay the average net price at a four-year public institution, and it’s easy to understand the adverse impact of these increases on students and families. In the 2007-2008 academic year -- when the average American worker earned $17.74 an hour in 2017 prices -- it took 661 hours of work to pay the average tuition and fees, plus room and board, at a four-year public college. Now, in 2017-2018, it takes the same typical worker 824 hours to cover that price. That’s more than an entire month of additional work.
Since 2010, public college enrollments have fallen by 573,000 students in the United States, even while the U.S. population has risen 4.88 percent. One reason for this is inflated public college prices. We must ask why the rise in real college net prices at four-year public colleges have risen more than nine times faster than the comparable increase in real median household income.
Falling state appropriations, administrative bloat, institutional mission creep, excessive expenditures on amenities like lazy rivers and climbing walls, and competition for improved ratings all deserve some blame. But the culprits are not only found on campus. Every tuition and fee increase at a public institution was approved -- usually unanimously -- by a public governing board whose members were often appointed by a governor.
Too many boards have neglected their fiduciary responsibilities to citizens, students, and families. They have become advocates for institutional wish lists that inflate costs.
Reform must start in governors’ offices and legislatures. These public officials must ensure that board members undergo training and orientation before they are permitted to serve, and that they understand they represent the public interest. If they don’t, costs will continue to rise -- and more Americans will continue to find that a college education is out of reach.
James V. Koch, a member of the board of Partners for College Affordability and Public Trust, served as president of the University of Montana and Old Dominion University.
Net prices for publics, The College Board, Trends in College Pricing, 2017, Table 4, https://trends.collegeboard.org/college-pricing
Consumer Price Index, BLS, Series CUUR0000SA0
Average Wage Rates, BLS, Occupational Employment Statistics, National Employment and Wage Estimates, United States, https://www.bls.gov/oes/current/oes_nat.htm#00-0000
Median Household Income, Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/MEHOINUSA672N
Public College Enrollments, The College Board, Trends in College Pricing, 2017, Figure 18, https://trends.collegeboard.org/college-pricing