November 19, 2007

Tuition Rises at More Than Twice the Rate of Inflation

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Raising tuition may be necessary to support various university expenses; however, the College Board has reported that tuition at private universities has risen at more than double the rate of inflation in the United States.
On average, tuition at private colleges, not including room and board, increased 6.3 percent to $23,712 and rose by 6.6 percent to $6,185 at public institutions from 2006 to 2007. Room and board at private institutions increased by five percent to $8,595 and by 5.3 percent to $7,404 at public institutions, according to the 2007 College Board report, “Trends in College Pricing.”
Tuition rises to cover various expenses; at private doctorale universities, $16,300 per student was spent on instruction in 2005-2006 and $900 per student were spent on public services. At public doctorale univiersities, $9,400 per student were spent on instruction and $2,000 per student were spent on public services in 2005-5006.
Although many students receive grants and aid that help them pay for rising tuition, the report stated that it confirms “the widespread perception that published college prices are rising more rapidly than the prices of other goods and services,” a trend that has occurred over the past thirty years.
More specifically, over the past decade, tuition at private universities has risen 5.3 percent per year, which breaks down to a 2.3 percent rise after tuition is adjusted for inflation.
The report not only documents rises in tuition, but also changes in the distribution of grants and aid, one issue that affects access and affordability to public and private universities alike.
From the 1992-1993 school year to the 2003-2004 school year, the dollar amount of grant aid increased most for low-income students; however, the percentage of grant aid was highest for the wealthiest students.
Cornell students are not immune to these issues.
Tuition at Cornell for 2007-2008 for students attending the Architecture, Art, and Planning, Arts and Sciences, Engineering and Hotel Administration colleges is $34,600. For in-state students in the College of Agriculture and Life Sciences and Industrial and Labor Relations, tuition for the 2007-2008 school year is $19,110 and for our-of-state students, tuition is $33,500.
In the 2006-2007 school year, tuition for endowed colleges was $32,981. At contract colleges, it cost $18,241 for instate students and $31,881 for out of state students.
Higher education institutions like Cornell are affected by the influence of the costs of maintaining faculty and staff, energy, facility and technology, according to Prof. Ronald G. Ehrenberg, labor economics.
Additionally, the falling value of the U.S. dollar may call for a rise in tuition.
“We buy books and periodicals by abroad and the falling value of the U.S. dollar increases these costs at a rapid rate,” Ehrenberg said.
The Higher Educated Price Index is one such index that “reflects what higher education institutions buy.” This index has increased each year by a half of a percent to one percent more than the Consumer Price Index, which measures the cost of living.
“So in a sense, we are hit harder by inflation than the economy at large,” Ehrenberg said.
One reason why tuition increases beyond inflation is that universities want to be the best; in order to have the best facilities, best programs and attract the best possible student body, universities need to collect revenue. Universities can also use this revenue to provide grant aid to students, according to Ehrenberg’s paper, “The Ecomonics of Tuition and Fees in Higher Education.”
Another reason that competitive universities like Cornell can raise tuition is because there is an increasing demand to attend the University, despite its costs. The economic benefits, such as a higher salary, that a student may have post-graduation are one incentive to attend a costly, competitive university, according to the paper.
It may also be difficult for universities to be “socially responsible” because of the shared governance of the faculty and alumni. The university must be a competitive work place for the faculty and use funds to retain mobile faculty. Since alumni can choose to which programs they wish to contribute, endowments cannot necessarily be redirected or cut for fear of losing donations entirely.
However, rises in tuition force students to compensate by taking private loans, which leave students with huge debts after graduation and little financial protection.
“I’m paying in-state tuition, but I still think it’s too high,” Julie Tucker ‘08 said. “I don’t think tuition needs to be increased.”
“I don’t think it should rise beyond the rate of inflation.” Preshita Date ‘11 said. “A lot of people who could come don’t because of the price.”