Why is the cost of a college education in the United States so expensive in 2014?
The numbers just don’t make sense.
Take one recent news item. The Boston Globe reports that former Brandeis University President Jehuda Reinharz is being paid more than $8 million dollars in compensation, post retirement. Reinharz led Brandeis from 1994 to 2010 where he helped raise more than $1.2 billion and oversaw the construction and renovation of 29 buildings. He still works part time there with emeritus status. Good job. But $8 million as the ultimate academic golden handshake? Really?
He’s not alone in this largesse. These days it pays to be in academic leadership, and often very, very well. Forty two private university presidents in the U.S. earn more than $1 million a year. The average pay for private university presidents was $423,510 in 2011, ten times the U.S. median income. Public university presidents’ on average earned $421,395. And this is at a time when public higher education funding is in decline, down by 8 percent last year when forty one out of fifty states slashed their funding.
The numbers just aren’t correct.
Some personal history…I was blessed to attend the University of Massachusetts at Amherst, as was my brother. GO MINUTEMEN! Great school. Great education. My two sisters also attended public colleges, as do 80 percent of all American college students. Back in the dark ages (1979!) when I was a freshman, my parents paid $2,460 for me to attend UMass—tuition, room and board, fees, everything.
I didn’t have to take out student loans, nor did my folks, nor my siblings. We worked jobs on campus and summers to help out. College then was actually affordable, especially a public education. It was a priority for our middle class family, a point of pride. “Our kids will do better than us and college is the ticket for that upward mobility.” Thanks Mom and Dad. Thanks Massachusetts.
But thirty five years later there’s wicked sticker shock. If I had a child today and wanted to send them to UMass, I’d pay 843 percent more than my folks did, even while inflation since then has only gone up by 243 percent. UMass is not alone in its skyrocketing prices. The U.S. Labor Department reports that while consumer prices have increased across the board in the past decade (i.e. housing by 22.8 percent and health care by 43.1 percent), college costs have risen by 80 percent, more than triple the rate of inflation.
The numbers just seem completely out of whack.
The scariest figures of all just might be found in student indebtedness. American college students and grads owe more than $1.2 trillion in loans. That’s $1,200,000,000,000. Delinquency rates on student loans are higher than any other type of consumer debt. The average debt is $30,000 per student. Seventy percent of college kids need those loans. Total student debt has risen 6 percent a year since 2008. Meanwhile the class of 2013 moved into one of the worst job markets in generations. Their unemployment rate is 8.8 percent, not bad but not great either. And by the way, you need to start paying back those loans now, regardless of whether or not you are employed.
The numbers just can’t hold anymore.
I want to be optimistic, believe that somehow as a nation we’ll figure out this latest social crisis. I’ve no doubt a college education is key in our increasingly service, high tech, innovation and information oriented economy. I still believe college is central to the American Dream. College provides a way up, a way out of hard times, the freedom to prosper and to become all God made us to be. Our children can’t afford not to spend four years on campus. But can they afford to pay for it anymore? When it comes to American higher education, you don’t need a PhD in mathematics to calculate one conclusion.
In 2014, the numbers just do not add up.