Saturday, March 27, 2010

Musing on the cost of college...

Brad Delong, economics professor, blogger, expert on money stuff, has a sidebar on his blog noting that he's signed up for a speaker's bureau because "the Eighteen-Year-Old is going to college next year, which means that I need to think about making more money."

Which makes it a bit odd that he's got a guest post on the Berkely Blog called Is It Fair for Education to Be Cheap?

A man now on the hustings to raise money for college is well aware that "cheap" and "college" are not a likely pair.

What he's referring to is the subsidized higher education one can acquire at a public university.

In my state, the in-state tuition is about $22,000 a year, which makes the cost of a four-year degree close to six figures when it's all said and done.

That's not "cheap" education. Or if it is, I'd like to know how a family that makes today's average income of $50K can afford to send multiple children off to school and pay for it without loans.

The cost of private colleges are approaching $40,000 to $50,000 a year. So it's essentially priced out of the realm of possibility for many families, unless draconian loans are taken out or colleges slash tuition costs for poor yet desirable students.

Now I am some years away from writing out those hefty tuition checks – still writing out less-hefty Montessori checks right now, but I shudder to think of the impact college tuition will have our family's bottom line.

And I have twins, so for us, it will be college expenses x 2 students x 4 years x the older brother's college expenses.

We've started saving for future educational expenses, but as we all know, investments have taken a big beating thanks to the crash. For many families, money has been lost in the gamble know as the college savings fund. God only knows what influences college savings fund will experience when it is finally time to send my kids off to college. One hopes not to be on the wrong side of a market adjustment!

Back to DeLong's post on the fairness of cheap college education, a post filled with rather bold claims that don't seem to have a foundation in fact. Like this one:

"On the one hand, the people who benefit from public and publicly-funded higher education are primarily people who are or will be relatively rich...."

I'd like to know what Brad DeLong's definition of "relatively rich" is. Certainly, a college professor's salary does not make one "relatively rich" enough to set aside enough money to send the 18-year-old off to college without additional income.

The most intriguing of DeLong's assertions is this:

"If we don’t keep college cheap–and publicly-funded–we find it next to impossible to increase educational opportunity; if we subsidize college with public money, we are transferring from the not-so-rich to the relatively rich."

First, where is the "cheap" college education? And how is this money being transferred? Are state schools filled only with the "relatively rich?" Are only the not-so-rich paying taxes these days?

Instead of a strange post seeking to answer the fairness of an issue that doesn't exist, I wish bright economists would focus on answering the question: why has the cost of college soared in recent years? Why do American colleges and universities believe that students graduating from college loaded down with ever-increasing amounts of debt is a sustainable business model?

What has motivated them to raise their fees significantly each year? And what are colleges doing to bring costs increases more inline with the cost of living increases? If only the "relatively rich" can afford the debt needed to acquire a college degree, we're looking at an economy that's pricing far too many people out of college. That's not good for a nation interested in retaining its superpower status.

1 comment:

brad said...

The big cost of college--dwarfing the $10K or so a year that we here at Berkeley charge--is the $25K or so in money you don't make while you are going.