Where is all the new money universities charge going?
May 22, 2019 12:07 PM   Subscribe

In 1960 a semester at Harvard cost $11,000 in consistent dollars. Today a semester at Harvard costs $50,000. An increase of 4.5 times. Where is that extra money going?

Googling does not provide an answer. I either find snide anti-college articles from right wingers, or defensive articles from university presidents. But neither answers the question nor even pretends to try.

The answer is not teaching staff, universities are firing full professors and replacing them with part time adjunct teachers, the percentage of a university's budget spent on teaching staff has declined sharply.

The answer is not support staff. That too has been sharply cut, and the remaining support staff are paid poverty level wages.

Buildings have always been expensive, building and maintenance costs in other industries have not gone up 4.5x in consistent dollars, so that isn't the answer either.

Harvard today takes in 4.5x more money per student than it took in back in 1960. Where is that extra money going? What specific new costs exist today that cost 4.5 times the old tuition rates that did not exist then?
posted by sotonohito to Education (65 answers total) 11 users marked this as a favorite
Note: I used Harvard as my example because as a private university it receives no government funding and therefore declining government funding for college is completely irrelevant to the question of why Harvard's costs in consistent dollars have gone up by 4.5x.

Inflation is also not the answer because we're measuring in consistent dollars.
posted by sotonohito at 12:08 PM on May 22

They do issue an annual financial report - here is the one from 2015.
posted by soelo at 12:12 PM on May 22

Amenities? I graduated from a similar school in 1999, not that long ago, and things are much fancier now than then.

I would want to take a long, hard look at support staff. I don't want to argue with whatever your source is, but I can't believe that it's been cut. I am at a public medical school, not even private, and the number of bureaucrats is not to be believed, and they are assuredly not making poverty-level wages.

Faculty don't make that much, but Harvard is definitely not replacing FT faculty with adjuncts.
posted by 8603 at 12:13 PM on May 22 [1 favorite]

According to this, $11,000 in 1960 would correspond to about $94,000 in today's dollars. It seems possible the tuition increase is due partly or mostly to inflation, and Harvard is making cuts, using its endowment, etc. to keep the tuition down.
posted by JimN2TAW at 12:14 PM on May 22 [1 favorite]

jimN2TAW, 11,000 consistent dollars, not 1960 dollars
posted by Dr. Twist at 12:17 PM on May 22 [11 favorites]

Real estate, to house programs, research, incubators, you name it. Harvard owns half of Cambridge, Allston, Brighton and they keep expanding. Innovation is everything for universities now, and that requires space, not to mention NICE space to make it inviting for donors. You gotta spend money to make money.
posted by wellred at 12:21 PM on May 22 [2 favorites]

According to this report (PDF):

Rising college cost is driven substantially by three economy-wide forces: (1) Lagging
productivity growth is endemic to personal service industries, so service prices rise faster
than goods prices. This is called “cost disease;” (2) The higher education workforce is highly educated and the cost of hiring highly educated workers has risen sharply since 1981; and (3) A college’s mission and market require it to meet a rising standard of educational care. More than any potential dysfunction on campus, these three factors have led to rising real costs.

Administrative “bloat” and amenity competitions grab headlines but do not account for much of the rising cost. Rising numbers of professional staff and improved amenities are not inherently inefficient.
posted by General Malaise at 12:24 PM on May 22 [14 favorites]

Harvard (like most top-tier schools now) does grant (not loan) tuition coverage for anyone with financial need. According to them, more than 50% of students are receiving financial aid. So most students are not paying that $50,000 per year, and Harvard is doing its own wealth re-distribution to have the richer students pay for the poorer students.
posted by brainmouse at 12:25 PM on May 22 [22 favorites]

This is a very complicated question, and I don't think anyone exactly knows all the reasons. This is a discussion I had many times with my parents, who spent their entire careers at research universities, and I can suggest some of the generally-accepted factors:

- Less money coming in from the government. Even private schools get plenty of money in the form of grants, etc.

- Radical expansion of facilities and amenities. Back in the 1960s (heck, back in the 1980s) the buildings, dormitories, gymnasiums and student unions were likely to be pretty crappy, even at the top-level schools. Nowadays schools need to have swanky student unions, flashy new buildings for sub-disciplines, amazing student unions, fully kitted-out gymnasiums and recreation centers, air-conditioned dormitories with private phone lines and WiFi, gourmet cafeterias, etc.

- Radical expansion of staff. When my father was dean of the Wiess School of Natural Sciences at Rice University from the late 80s until the late 90s his staff consisted of around two people, one of whom mostly assisted his research group and may not have even been on payroll under the dean's office. Today the dean's office has a staff of fifteen. Similarly huge expansions can be seen in admissions staff and marketing staff, and of course all those swanky facilities need people to run them and take care of then.

Insofar as Harvard specifically is concerned, it may be worth considering that Harvard University could be considered more a fund than an educational institution.
posted by slkinsey at 12:25 PM on May 22 [9 favorites]

Baumol's Cost Disease has also been attributed as a factor; at the risk of oversimplifying, if inflation is calculated on a basket of goods that have mostly benefitted from increases in productivity due to technology (which it is) then industries that have not seen proportional gains in productivity, generally human-intensive industries, become relatively more expensive.
posted by mosst at 12:29 PM on May 22 [8 favorites]

Amenities? I graduated from a similar school in 1999, not that long ago, and things are much fancier now than then.

This is a part of it -- Why does a college degree cost so much? (John W. Schoen for CNBC, 16 June 2015, updated 8 Dec. 2016)
On the cost side, schools continue to compete for students by working to attract top faculty, build and maintain the latest facilities and offer the next generation of students amenities that can be touted on campus tours for prospective applicants.

Among the most selective schools, amenities have become an important part of the race for the best and brightest, and well-off, applicants, according to Robert Kelchen, a professor at Seton Hall University's Department of Education. "Schools are all going after a fairly small pool of students who are high achieving and high income and able to pay much of their own way to college," he said. "They're trying to build more amenities—so you hear about the rock climbing walls and the lazy rivers."

Over the decade from 2001-2011, the share of expenses devoted to "student services" rose from 17 percent of the average school's budget to 20 percent, according to a comprehensive review of college-spending patterns by the Delta Cost Project at American Institutes for Research. The research covered decades of data from thousands of American public and private colleges and universities.
Also the rising cost of college sports, including generous coaching salaries (USA Today, 26 April 2019) -- On Friday, Clemson’s governing board approved a new deal for Dabo Swinney: 10 years, at least $93 million -- with $50 million guaranteed.

Back to CNBC:
"At many colleges, it's a significant cost," said [Robert Kelchen, a professor at Seton Hall University's Department of Education]. "The biggest subsidies are at these small Division I programs that are trying to make their way up the ladder and get into the big time."
Higher education payrolls have also been rapidly adding non-teaching jobs in recent years. Public and private colleges and universities expanded their payrolls by 28 percent between 2000 and 2012, more than 50 percent faster than the previous decade, according to an analysis of higher education staffing by the Delta Cost Project. That build-up largely tracked the rise in enrollments.

"Many of these new positions appear to be providing student services, but whether they represent justifiable expenses or unnecessary 'bloat' is up for debate," wrote Donna Desrochers, the report's principal researcher.
The article includes some cost graphs, which differentiates between revenues and spending for public bachelor's, community, masters and research, and private bachelor's, masters's and research. Academic support isn't nearly as broad a band as I was expecting to see, but that might be because it aggregates values for some schools that dump tons of money into their sports programs, compared to those that don't.
posted by filthy light thief at 12:36 PM on May 22 [7 favorites]

I also wonder about the extent to which faculty salaries may play a part, at least in some schools. Yes, we are all aware of how much the job market for tenure-track professorships has dried up and how much the schools are squeezing adjunct faculty. Part of the reason that market has dried up is that professors nowadays are spending a lot more time in their jobs than they did back in the 1960s. When my father entered the field, many schools had mandatory retirement at 65, and for that matter life expectancy wasn't all that high either. On the other end of things, when my father died at the age of 80 he still had an office at Rice University. At that time, Robert Curl (who was my father's thesis advisor) still had a research group at Rice. Meanwhile, figure in however many decades of incremental raises, and account for a number of professors who could be enticed away to another university, and there is certainly a stratum of professors who are making very good paychecks indeed. I just wonder how much the overall cost of faculty salaries has grown in adjusted dollars compared to the 1960s. I remember my father telling me that when he went into academia he assumed it would be a life of "noble poverty," because that's largely what it was in the 1960s and earlier. That had certainly changed by the 80s, although we are perhaps seeing a return to that model again.
posted by slkinsey at 12:39 PM on May 22 [3 favorites]

When i was in undergrad in the late 1990s, tuition was slated to make a large jump the next year. The Chancellor was asked why - just give us some sort of loose justification.

At the time, his answer struck me as both extraordinarily craven and simplistically guileless - "We need to make sure our tuition costs are on par with X, the school ahead of us in the US News and World Report rankings."
posted by notsnot at 12:48 PM on May 22 [3 favorites]

Something else to consider. (In 2001, the average janitor salary at Harvard was about $18,000, at least according to the union.)
posted by praemunire at 12:52 PM on May 22 [2 favorites]

I think one of the major differences between the published price-tag in 1960 and the published price-tag in 2019 is that the typical/ average student actually paid the published price in 1960, whereas in 2019, the published price-tag is decidedly not the 'average price paid' by most students. Rather, for most students, the price is steeply discounted, as brainmouse noted above.

So when you find the average price paid in 2019, not the sticker price, then we can start to tease out the other inflationary aspects. I think faculty salaries are on balance relatively higher than they were in 1960 at top-schools like Harvard-- just as the salaries for the most-successful people in most fields are quite a big higher than in 1960.
posted by Doc_Sock at 12:53 PM on May 22 [2 favorites]

Keep in mind also that the sticker price "charged" to a student is not the total amount it costs to educate that student. Harvard has an endowment and donations; public universities have less endowment but get (increasingly slim) public funds; etc. This doesn't answer your question, of course - sticker prices have gone up and by more than seems reasonable to most of us - but this isn't like a consumer product where we might ask "why is this exact same chair or car more or less expensive." There are just a lot more cash flows going into universities that aren't present in other markets, and they're going up and down (mostly down) for a lot of different reasons.
posted by Tomorrowful at 12:53 PM on May 22 [3 favorites]

I see why you chose it but Harvard is actually a bad example in this particular case - Harvard doesn't need to charge any tuition at all. It has an endowment in the tens of billions of dollars and could easily fund all university activities from the income on the endowment (and it would probably still receive donations, because like the Catholic Church people will still donate money to Harvard no matter how little the institution needs it).

Harvard's tuition price has NOTHING to do with Harvard's operating costs. They are completely unrelated.

That said, at smaller private colleges (where tuition makes up a big percentage of the income/operating expenses), tuition prices have also gone up precipitously; there's a strong argument to be made that administrative costs, including crazy-high salaries for university presidents are a big part of that. Marquee-sport coaches do get paid a lot, but those sports often bring in more money than they cost the university (all those unpaid student athletes!). And I'm sure there's a lot of sort of "lifestyle inflation" compared to the old days (certainly the dorms I lived in in the 90s were extremely spartan compared to what's on campus at my old school nowadays).
posted by mskyle at 12:56 PM on May 22 [17 favorites]

There's a change in staffing (says this university staffer) that isn't well understood.

Direct support staff (secretaries, junior accountants, mail room staff, janitors, food service, repair and maintenance) are the support staff who are getting cut and cut and cut and whose wages are under pressure. I hear complaints from everyone about this - faculty are getting stuck with more and more petty admin, trash doesn't get thrown out and floors don't get cleaned, existing staff are overburdened and dealing with salary cuts, anyone who sits near the door of a building is constantly interrupted with questions about directions, deliveries, facilities and maintenance, etc.

However, the new facilities(gyms, more technology, fancier dorms, dispersed meal options) do in fact require more staff, so even if those staff are overburdened and underpaid there are more of them. You can't have ten separate dining halls where previously you had three without bumping up staff, even if all of them are part timers with no benefits.

And there are a whole bunch of professional staff needed - programmers, counselors, fitness people, etc, who provide the new services. These people tend to make more and better money, but their job security is poor.

And then there's the increase in Assistant Vice Deans of Marketing and Assistants To the Vice Deans of Marketing - people who tend to make a lot of money and get a lot of real estate and staff as part of their contracts. To my mind, these positions are very often a form of upper middle class graft - moving money into jobs that go only to wealthy professionals hired from outside the university, who then hire their cronies, all of whom help create the "norm" that they each need $250,000 a year.

The net result is that costs go up even though it's actually harder for faculty and staff to perform the actual functions of the university.
posted by Frowner at 1:04 PM on May 22 [58 favorites]

This is just a small piece of the puzzle, but it's the piece I have insight into, so: universities these days are subject to many laws and regulations they were not bound by in 1960. These regs have costs; not just the salaries for each person like me who's hired to be the expert and responsible party for that regulation, but the implementation and maintenance of systems to gather and report the necessary information. Faculty and staff time to keep up with the new processes. Registrations and licenses and inspections. Internal and external audits to figure out where we might be fucking up *before* the government does, which would be a lot more expensive in the long run.

My salary and my system aren't breaking anyone's budget but multiply me times every regulation the D of Ed has passed since 1960 and it's real money.
posted by Stacey at 1:06 PM on May 22 [9 favorites]

notsnot: We need to make sure our tuition costs are on par with X, the school ahead of us in the US News and World Report rankings.

This is definitely a thing. Without giving any inside information, I am aware of a school that expects to compete with other top schools in obtaining the best students in certain disciplines. During a certain period, however, it was not getting the share it expected of such students. After doing various analyses it came out that this school was charging lower tuition than the competing schools, and the desired students were making decisions based on price by choosing the higher tuition. The school raised its tuition and started to get the share of top students it expected.

There are some interesting graphs and information on this page. One of the things I found interesting was a table of the "Harvard Tuition Rate of Increase" in adjusted 2000 dollars. This showed that tuition rose 70% from 1950 to 1960, 59% from 1960 to 1970, 52% from 1980 to 1990, but only 23% from 1990 to 2000, 16% from 2000 to 2008 and 5% from 1970 to 1980 (actually probably more like 16% as explained in the notes). That's not what I would have expected.
posted by slkinsey at 1:07 PM on May 22 [4 favorites]

The addition/decrease of support staff is true in both regards. My university now has a whole office whose job it is to identify "students of concern" and to try to keep them from killing either themselves or the rest of us (one such student is currently prohibited from entering my building, enforced by police presence). I don't think that existed in the 60's. In general there is a real decline in student mental health which requires resources. These are all increases in support staff that were necessary given the differences in the world we live in.

On the other hand, there are many such entitites whose efficacy is as far as I can tell zero, and who also didn't exist years ago. We must have 20 people whose job it is to make the climate better for minorities. I can't figure out if any of them has ever done anything to actually do that. (This is a cause I'm very invested in, so am somewhat cynical because I don't see much change). Same with the title 9 office, the office of discrimination, etc. I would strongly support this investment if it actually made a difference, but there is no accountability.

Faculty offices no longer have their trash cans emptied or floors cleaned and their office are only every painted at the expense of the faculty. There is very little support staff for administrative things - grants are formatted to exact government specificications by faculty rather than support staff. My understanding is that the ratio of faculty to people who directly help faculty do their primary job of research/teaching/service has declined, while there is a huge additional educational burden (student mental health) that is not "teaching" that the university now provides.

I would be very intersted to see how faculty salaries have increased, I assume they have relative to the US average, but are probably low relative to other rich people with rich jobs. They fit in this weird in-between place (the top 10% but not top 1%). They are still quite low relative to other people with the same education, but I would argue that they are higher than they should be given how poorly most people in this country are paid.

On preview - what Frowner and others have said (I've never been involved in an ask with so many answers so quick)
posted by lab.beetle at 1:13 PM on May 22 [12 favorites]

Colleges are more expensive now in part because of people like me. I work in study abroad. Fifty years ago, there was maybe one professor who spent a few hours a week helping students enroll in a university abroad. Now, colleges and universities have a very different sense of our responsibility towards students who study abroad, and we have centers of multiple people.

Multiply that by the counseling center. Fifty years ago, there probably was one nurse. Now there's a whole team of mental health counselors.

The career development center. Same deal.

The student tutoring center.

The disability office.

The Student Life and Residential Life folks, many of whom deal with major student crises.

The alumni relations team. Same deal, and those folks tend to get fancy salaries so they can court the fancy alumni.

Is the answer to cut back on these services? I would hope not. I can only predict that they will be more necessary, as today's student gets more and more helpless. (Although the real answer is upper-level administrative bloat.)
posted by Liesl at 1:14 PM on May 22 [13 favorites]

I would also put forward as a hypothesis that technology costs probably contribute. Even though some of the technology has made things more efficient, providing technology to entire campuses probably is much more expensive than when I was in university and to get an email address (to use on a VAX terminal), I had to go find the IT department, which was housed in the basement past the janitorial staff's break room. Now faculty and staff have phones and laptops and all kinds of things, plus wifi, plus things become obsolete faster, plus plus plus.
posted by warriorqueen at 1:20 PM on May 22 [5 favorites]

Note: I used Harvard as my example because as a private university it receives no government funding and therefore declining government funding for college is completely irrelevant to the question of why Harvard's costs in consistent dollars have gone up by 4.5x.

I don't think this assumption is correct. In addition to government funding through research grants as mentioned above, private universities and public universities are competing for the same students.

As a made up example, say in the past a good public university is charging say $10K for tuition and a good private university charged $18K. Now, because government funding is slashed (a lot of it was diverted to prisons, at least at the state level), the public university charges $20K for tuition. The private university is positioning itself as an upmarket alternative to the public school; it makes no sense to charge what is now less than the public school for tuition, so it has license to raise tuition north of $30K.
posted by Homeboy Trouble at 1:20 PM on May 22 [1 favorite]

I used Harvard as my example because as a private university it receives no government funding and therefore declining government funding for college is completely irrelevant to the question of why Harvard's costs in consistent dollars have gone up by 4.5x.

Harvard and other private universities receive lots and lots of governement money.
posted by If only I had a penguin... at 1:30 PM on May 22 [11 favorites]

I do think amenities for students plays a huge role. I was in college from 2003-2007 (public university), then moved back to the college town in 2012 for work. The differences were ... astonishing.

Back in MY day, we lived in doubles without air conditioning. We did have a manual radiator for winter, and a window that would slide open in the spring and fall (but torn screens, so you could either sweat to death or get eaten alive by mosquitos). No fan unless you brought your own. When I visited my first-year dorm again in 2012, they had all been demolished and replaced with fancy-looking enclosed buildings with mostly singles and huge common areas. Everything was card-swipe only. Building that infrastructure and maintaining it takes $$

No wifi when I was an undergrad although we did have wired ethernet connections in the dorm rooms. (Bring your own cable.) Now there is an expectation that you'll have wifi everywhere, for laptops and smartphones. Building that infrastructure and maintaining it takes $$.

They had built a new gym shortly before I started college, and it was FANCY. Olympic-sized saltwater pool, smoothie shop, etc. I hardly ever went because it was too preppy for me. I used to go to the older gym closer to my dorm, the one that had been around since the 1920s (and looked it). But building that fancy gym and maintaining it takes $$.

Dining halls are definitely nicer, both in appearance and in quality of food served. I remember we'd get excited about chicken filet night. (People would line up at 5pm to enter the dining hall. If you went after 6:30 or 7, they'd have run out, no chicken filet for you.) Now it's like international themed restaurant quality food, and probably much healthier too. Making all that good food takes $$.

In the 5 years I'd been away, several new buildings went up to house new divisions or departments. I remember once parking in this semi-secret place where I used to park for free as an undergrad, then getting lost trying to get back to my car at the end of the day because everything was different from how I remembered it.

It really is an arms race, because once one school starts fancifying their buildings and providing amenities (even if, like wifi, those amenities are now really a necessity) all the rest of them have to do it.
posted by basalganglia at 1:42 PM on May 22 [5 favorites]

Dining halls are definitely nicer, both in appearance and in quality of food served.

Bluntly, the food served at my Ivy in the early '90s was both unhealthy and barely edible. I do not begrudge feeding the students better, especially as the vast majority of them are on a full meal plan.
posted by praemunire at 1:51 PM on May 22 [11 favorites]

Everyone is on the right track, I wanted to add that some of those "amenities" and new buildings are necessary. Lab and occupational safety standards have changed a lot, requiring more ventilation / fume hoods / safety training / lab coats / haz waste disposal (there were chemicals from probably the 50s in my last two labs because why not keep it?). Most folks are glad that colleges have to care at some level about discrimination and sexual harassment/assault - you need a title 9 coordinator and trainings and HR folks to administer the trainings.

A little squishier but still pretty necessary - you need more counselors/therapists than you did until very recently or your college is going to get sued. My graduate institution had a response team you were supposed to call if you suspected a student was going to be violent toward themselves or others - that's time those folks aren't spending on other things.

My rural undergrad institution built a massive new sports facility but also they were constantly putting on programming to give people things to do besides binge drink, and it sounds like the fancy gym complex actually helped with that more than another pizza party, so...
posted by momus_window at 2:33 PM on May 22 [7 favorites]

It's also relevant that student populations have changed at most universities. As a larger percentage of people go to college, they are less likely to have the support and advantages of students in 1960, and some schools are stepping in to provide more of that.
posted by metasarah at 2:45 PM on May 22 [4 favorites]

My entire unit would not have existed in 1960. I work in academic technology and many of my colleagues work in faculty development (teaching professors how to actually teach well). Neither were concerns several decades ago, but I like to think we add value to the institution and improve student outcomes. There's a whole other giant unit that handles central IT services that also would not have existed.

I work at a public university that is one of the, if not the, most expensive publics in the country. The state's governor is a Democrat but the legislature is jammed full of right-wing nutjobs and it is a battle every single year to get even the inadequate funding we currently recieve. We send buses of students and faculty to the state capitol every year to lobby.

As far as private institutions, there's also a lot of government money flowing (I used to work at a private R1) in the form of (among other things) research grants. A massive percentage of total grant funds go directly to the university for the purposes of keeping the lights on. Less and smaller grants coming in effects tuition at even private institutions.
posted by soren_lorensen at 3:10 PM on May 22 [3 favorites]

Oof, yeah, amenities. I work at the campus where I was an undergrad in the late 90s. The food is a lot better, the two new gyms are a lot better, the counseling services are real now, and the health services offer hormone therapy for trans students. We have late night safe escort services. pThere’s a food pantry now, which is a real fucking mixed bag because holy shit why are we not getting our financial aid sorted out well enough so students can eat, but I’m glad we have it, and the space and staff and food are not free.

We are a private university but my understanding is that research grants are our second biggest funding source. And the majority of those funds have always been federal. A lot of effort has been put into developing closer ties with private funding (which is a mixed bag too but that’s another discussion), but the decline in those federal grant funds definitely affects the overall budget. Wouldn’t be surprised if tuition increases are partly filling in that gap, though I have no knowledge of that being true.
posted by Stacey at 3:22 PM on May 22 [2 favorites]

Ereshkigal45 gives an important piece of the answer. I read an AAUP report ten years ago that charted a gigantic increase in salaries allocated to universities' executive administration tiers. Even though the world was in a financial crisis, universities seemed oblivious. A kind of administrative bloat set in, with the paychecks of academic managers at Dean-level and above shooting up. Additionally, there was something like a 30% increase in the number of new positions created at this level--six figure salaries attached to new, bogus titles like Associate Vice Provost for Global Affairs and Entrepreneurship (see this online title generator).
posted by Morpeth at 3:25 PM on May 22 [2 favorites]

As others are explaining, the question is extremely complicated. Harvard charges what they do because they can--they are positioned in the market to not only be able to but also to want to market themselves as upscale. Many of those universities set a high price so that they can segment their costs too, where students from wealthy families will pay and they can also admit some (perhaps small number of) students who are high performing at much lower price in practice.

Also, as noted above, there has been a significant increase in the expectations for "duty of care". I'm also in study abroad, and there was a time (as recent as when I went abroad 17 years ago) when that meant handing out applications and eventually telling students the date they should show up in-country. There is now an extensive field for this, with best practices for health and safety as well as a significant improvement to pedagogical methods.

Increased access to higher education also is a factor (on preview, I see metasarah mentions this). When students come from higher income backgrounds, their families can afford to make arrangements for private counseling. With more students coming from middle and low-income backgrounds (including students with complicated situations like food and housing instability), there is a much higher need for counseling services to available as part of the sticker price for the university. There's a higher need for academic support services for students who weren't well-prepared at the high school level, a higher need for detailed orientation for first generation students, a higher need for support for multicultural/LGBTQ/international students, etc. These support services positions often require graduate degrees for the staff as well, and so even though they often don't pay as well as the private sector it adds up.

Lastly on my list, but of course barely touching the surface of the issues, for public universities there have been decades of cuts to funding, which come out as higher costs to students. Additionally, legislatures and accrediting bodies also want more more reporting and more data collection and more analysis and more justification. Then as the costs inch higher, the justification cycle continues.
posted by past unusual at 3:32 PM on May 22 [2 favorites]

Oh, yeah, I don't begrudge current students for having access to better food, better labs, and better safety through things like ID-secured buildings and late-night escort. But it does cost a lot of money to provide those services.

I do remember when I was in college, there was an outcry over a plan for a new student center when the University was not paying staff a living wage. Sit-ins and everything; I believe there was a hunger strike, but that was after my time. There was definitely a lot of resentment that our tuition dollars were being used to fund what was viewed as vanity construction.
posted by basalganglia at 4:17 PM on May 22 [1 favorite]

I think a big part of it is that students have much more money to spend than they used to, money that can generally only be spent on education, and the increase in which is mainly an undischargable form of debt.

In other words, university education is a sector in which the supply of available money has grown much faster than the supply of things to spend it on, enrollment slots in the case of your question, and that has resulted in gigantic inflationary pressure.

Many of the things other answers are pointing to are excuses to charge more money, and I think they are mainly after the fact effects rather than causes.

Student loans are currently second only to mortgage debt in the American economy, have tripled to $1.45T in the last 12 years, and are making a bid to actually overtake mortgages.

And debt is tremendously stimulating to the economy, undischargable debt doubly so, and I think that has vitiated all attempts to rein it in up to now.
posted by jamjam at 4:22 PM on May 22 [8 favorites]

To reiterate and perhaps help explain a point already made above by a couple of people:

Inflation is also not the answer because we're measuring in consistent dollars.

There isn't really any such thing, in the long term.

Over short periods, there is a general rough tendency for prices to gradually rise together, at a rate we can call 'inflation' and calculate a value for based on a weighted collection of prices for various things. But that assumes a very simple model of price change which doesn't really match reality, especially over longer time intervals where the whole nature of the economy can be shifting around in huge ways due to technological changes and other factors.

What "consistent dollars" means depends completely on what prices you choose to use to define inflation with. The commonly used measures are largely based on everyday goods.

If you had used inflation figures based on the cost of college degrees, or similar service-based things, then you would have figures in "consistent dollars" showing that the cost of a Harvard degree today was much the same as in 1960. Although a whole bunch of everyday goods would show up as being be several times cheaper - which might not seem as much of a surprise given everything that's happened to production methods over the past six decades.

Had you been using those hypothetical figures and asked the question "why does college still cost the same when goods are now so much cheaper?" then the answer would be fairly obvious - the price of college isn't really driven by the price of goods.

And what you're actually asking is really that same question, just from a different point of view.
posted by automatronic at 4:56 PM on May 22 [14 favorites]

In 1960, a college degree wasn’t the necessity it is today, so schools didn’t have the captive audience they have today.

The space race had barely begun and university facilities had not caught up. A lot more schools were primarily liberal arts - if you can dig up a 1960 course catalog, take a look and compare the offerings. There was a huge science building boom later in the 60s. STEM facilities are both more expensive and more square footage, while not necessarily being covered by tuition or research funding.

And, yeah, student loans and more amenities and more student services and higher higher-up salaries.
posted by Kriesa at 5:18 PM on May 22

I think trying to associate costs with price for something with inelastic demand isn't quite right. The reason why schools charge more is because they can, and the availability of non-dischargeable student lending adds on a new layer of financial leverage that magnifies the nominal change.

And the costs just follow price.

This incidentally is how a lot of businesses work. They just don't have constant pricing power.
posted by JPD at 5:26 PM on May 22 [4 favorites]

Re: Amenities. We're looking at a $39,000/student/year price increase.

I don't think better dorms and dining halls accounts for $39,000 per student per year especially when you consider you can rent a two bedroom apartment, buy a gym membership, and eat one meal a day at a fancy (for $30 values of fancy) restaurant every single day for a year and still spend less than $26,000. There's no possible way dorms and dining halls, no matter how much better than in the 1960's, cost that much.

I also note that we're mostly looking at people guessing and speculating. Is there really no hard data? I couldn't find any, but I assumed that was because I lacked the necessary financial knowledge to know what to look for. Is it actually a mystery?
posted by sotonohito at 5:29 PM on May 22 [2 favorites]

I don't think it's "a mystery" so much as there is not one single explanation for all the varied models of colleges and universities out there. "It depends" is a more apt answer for your question.

For state schools, decreasing state support is a huge factor. At the University of Texas at Austin (where I used to work) state funding now provides only 11% of the university's revenue. In the 80s it was closer to 50%. (UTAustin is a flagship university of the state - I imagine it is even worse at the regionals/HBCUs).

Where I work now, at a very spendy private consortium of schools, "sticker price" is kind of illusory price that no one pays. At a school with 56,000 list price, the average student spends more like 26,000.

There is a lot of data and a lot going on here. You might want to narrow your question down a bit.
posted by pantarei70 at 5:41 PM on May 22 [6 favorites]

RE: food and amenities - in at least one case of a high-cost private university I am very familiar with, food services and campus bars/coffeehouses used to be run and staffed by folks directly employed by the university, and often at least partly staffed by students on a work-study program. Now they're all run by a private company contracted by the university. I strongly suspect that, like having private companies run toll roads (rather than the state), or using private military contractors to wage war (rather than a nation's actual armed forces), this is one of those decisions that seems to be more financially efficient considered from one perspective, but actually costs more money in the long run.
posted by soundguy99 at 6:31 PM on May 22 [8 favorites]

specially when you consider you can rent a two bedroom apartment, buy a gym membership, and eat one meal a day at a fancy (for $30 values of fancy) restaurant every single day for a year and still spend less than $26,000

Not in Cambridge, Massachusetts, you can't! As of right now you couldn't swing a one-bed on that amount.
posted by praemunire at 6:34 PM on May 22 [13 favorites]

debt is tremendously stimulating to the economy, undischargable debt doubly so,

This is not correct. To the extent loans are effectively creations of money, they may be considered stimulatory, but...undischargability in bankruptcy doesn't have much to do with it. If anything, in practice debt service that goes to pay off bonds issued by a securitization that are held by large investors is less stimulatory to the economy for the simple reason that wealthy people and institutions spend much less of any given dollar than poorer people do.
posted by praemunire at 6:39 PM on May 22

The non-dischargeable nature tho allows the size of stock of debt to be bigger than it would be if you had to worry about bankruptcy, ever if dollar for dollar I agree with your premise.
posted by JPD at 6:46 PM on May 22

In 1960 Harvard and all other universities were run on paper. Today everything—HR, finance, admissions, registration, learning management systems, the library, runs on technology. Somebody above mentioned WiFi, desktops and laptops, etc, but there is also a massive research computing infrastructure, data repositories, etc, etc. Tech and IT are huge financial investments at any school, but especially in large research universities.

Also— health care! The skyrocketing costs of health care affect universities as employers just as much as they do individuals.
posted by DiscourseMarker at 6:51 PM on May 22 [4 favorites]

when you consider you can rent a two bedroom apartment, buy a gym membership, and eat one meal a day at a fancy (for $30 values of fancy) restaurant every single day for a year and still spend less than $26,000.

That is not at all true for places like Cambridge, MA, where the median rent last year for a 1-bedroom apartment was $2500.
posted by TwoStride at 6:53 PM on May 22 [6 favorites]

Frowner ftw-- a big part of this is the hugely ballooning number of highly-paid mid-level administrators and bureaucrats. Deans and sub-deans and assistant provosts of student life and student experience and campus environment and marketing. Counseling coordinators and compliance officers and Title IX reporting staff.

Most schools maintain whole rafts of specialized middle administrators that simply didn't exist in the '60s. For example, dedicated offices of staff for Institutional Research and Assessment, for Disability Services, for Sustainability and Outreach, for Campus Diversity, for Career Services, for Student Success and Retention, are all relatively new arms of administration that have quickly become de rigeur for a well-run university. And at most schools, each of those offices will support at minimum a few high-level officers at $100-200K, plus several juniors in the high five figures, not to mention extra support staff, infrastructure, etc.

I'd also be interested in seeing numbers on this, but IME higher ed, while being very careful about tracking and reporting wages for professors and support staff, is conveniently fuzzy about its expenditures on administrative salaries. This is partly because the growth in that area occurs frequently through the creation of new roles, so it's hard to compare apples to apples. Administrators do absolutely, as Frowner notes, work to reward cronies while paring back other salaries to the bone. But it's easy to argue "It's not that Bob got a 35% raise last year-- he was just promoted from Assistant Coordinator of Institutional Mission to become our new and very necessary Supervising Mission Integration Officer!"
posted by Bardolph at 6:53 PM on May 22 [7 favorites]

The non-dischargeable nature tho allows the size of stock of debt to be bigger than it would be if you had to worry about bankruptcy

I don't agree, not in any significant way. Private student loans only became nondischargeable in bankruptcy in (IIRC) 2006. It was quite the flourishing industry before that.
posted by praemunire at 7:34 PM on May 22

Nondischargeable only since 2006, you say?
A finder.com analysis of Federal Reserve Bank data reveals that student loans have tripled since 2006, with totals rising from $481 billion to more than $1.45 trillion. At this stage, student loans are the second-largest form of debt for households — second only to mortgages. Americans were shocked when student loans surpassed credit card debt back in 2010. But will student loans keep rising to trump mortgages?

The 10-year annual growth rate for student loans is an astonishing 10.4%, in stark contrast to the 10-year annual growth rate for mortgages — just 0.6%. At these rates of growth, student loan balances will overtake those of mortgages by 2042.
It's almost as if something set the student loan industry on fire in 2006.
posted by jamjam at 8:01 PM on May 22 [5 favorites]

Direct support staff (secretaries, junior accountants, mail room staff, janitors, food service, repair and maintenance) are the support staff who are getting cut and cut and cut and whose wages are under pressure. I hear complaints from everyone about this - faculty are getting stuck with more and more petty admin, trash doesn't get thrown out and floors don't get cleaned, existing staff are overburdened and dealing with salary cuts, anyone who sits near the door of a building is constantly interrupted with questions about directions, deliveries, facilities and maintenance, etc.

QFT, from this fellow university staffer. Even after some of those secretaries and junior accountants move up the ranks to professional, exempt positions, we find ourselves wasting hours trying to explain to faculty twice our age that all those pesky regulations and policies exist now, and even boomers with tenure are actually supposed to abide by them. Or cleaning up after the new career-line faculty who think they have to (and can) do all their own procurement because we live in their blind spot. Or, yes, covering for the third receptionist who has peaced out in as many years, because she was hired for her people-pleasing skills (read: inability to say “no” to the old-economy faculty, who all called her “MY assistant” and tasked her with after-hours personal errands) and finally something just broke.

Meanwhile plenty of fraud/waste/abuse still linger, because central administration thinks travel reimbursement auditing is something you can turn into a 10-hour-a-week work-study gig.
posted by armeowda at 10:17 PM on May 22 [7 favorites]

Full-pay students - those who can pay or borrow the huge tuition - support the poor, "scholarship" students. Then the university brags about how diverse their student body is.
posted by Cranberry at 12:52 AM on May 23

Going back to the 70s there was an element of restricted discharge. Granted it was only five years but for a bunch of reasons that improves the math on default rate a lot. Of course now its preposterous.
posted by JPD at 2:35 AM on May 23

As non-profit institutions, universities have to declare their most highly paid employees and make them public (IRS Form 990). Anyone who works at a university should look at theirs. This was how NYU faculty discovered that their new provost earned 800K in 2016.
posted by Morpeth at 4:38 AM on May 23 [2 favorites]

As non-profit institutions, universities have to declare their most highly paid employees and make them public (IRS Form 990). Anyone who works at a university should look at theirs

I love doing this. There were a few surprises on the faculty side, but depressingly, my institution's highest paid employee was, of course, a coach.
posted by TwoStride at 5:56 AM on May 23 [2 favorites]

I work for a state university and all our salaries are made available.
posted by PussKillian at 9:17 AM on May 23 [2 favorites]

So far it appears that we have some guesses and anecdotes, but no answers? Is that correct or did I miss something?

Is the answer really that hard to find? No one on MeFi either knows it or knows where to look to find it?

I started by assuming my failure to find the answer was due to my own lack of knowledge keeping me from being able to google the right terms or ask the right question. Apparently not, and the question is either more difficult in weird ways than I'd thought or the answer is being hidden.
posted by sotonohito at 11:16 AM on May 23

I think what this tells you is that there's no single straightforward answer. You asked a question that's actually quite complex.
posted by TwoStride at 11:22 AM on May 23 [11 favorites]

There is certainly data on the tuition discount rate (50%+, so that $50,000 sticker price is more like $25,000 in practice, and you're only talking a ~twofold tuition increase, not a 4.5x one).

Similarly, many of the new costs others have cited here, including extra facilities and burgeoning administrations, can be empirically verified simply by checking to see when they were instituted. NYU's undergraduate tuition is $51,800 this year, so it fits your pattern. Was there an Office of Institutional Research and Data Integrity at NYU in 1960? No, but it certainly has one now, and it employs 12 people, including a pricey Assistant Vice President and a couple Executive Directors. With benefits, and assuming a mean salary of well north of $100K apiece, that single small office would account for the full post-1960 tuition rise for ~150 NYU undergraduates. And so forth.

As TwoStride says, there probably isn't a single easy answer, but that's not the same as saying there's no answer at all.
posted by Bardolph at 12:08 PM on May 23 [6 favorites]

Yeah, any answer to your question has a million facets by nature of the question itself. (This is why a state university pays us accountants the medium-sized bucks.)
posted by armeowda at 2:06 PM on May 23

Most actual real life problems like this can't be answered without a great deal of uncertainty.
posted by JPD at 2:33 PM on May 23 [1 favorite]

> Is the answer really that hard to find? No one on MeFi either knows it or knows where to look to find it?

I just took a semester-long doctoral class looking at much this question (what is quality in education and the costs/tradeoffs of how various stakeholder groups define it), and the answer is that the answer is very complicated.
posted by past unusual at 2:44 PM on May 23 [3 favorites]

There is a concept called "perceived value pricing" which suggests that some things can be priced depending on what the buyer thinks it's worth regardless of the cost to make them. One of the things that has affected colleges is sort of a reverse of that. Buyers think the higher priced college is the better college. Would you think Harvard would still be Harvard if they cut the cost by 30%? I do know of a college that experienced a drop in applications when they tried to hold the line on tuition as compared to their peers.

This doesn't mean the colleges just raise their price. It does mean that they feel than can (or must) improve their offerings to justify a higher price partly because the higher price will make them look good.
posted by SemiSalt at 5:52 PM on May 23 [3 favorites]

Teaching staff wages have gone down. Support staff wages have gone down. Yet they claim between them those two categories take about 50% of the budget. And that's just flatly impossible.

Not if you have more staff (due to IT infrastructure, all these new requirements, etc.) Like, in my small business world, we have decreased our number of staff but raised their wages so our costs went up. But we could hire more staff at lower wages and still have our costs go up. In fact they would go up because we would need more people to supervise them, to run their payroll, more insurance costs, and so forth.
posted by warriorqueen at 6:29 AM on May 24 [3 favorites]

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