There are numerous theories about why the rate of increase in university tuition fees has outstripped the rate of inflation for the past thirty or so years:
• State legislators have cut back universities’ budgets, and the universities have to make it up by charging more in fees. This is a favorite of liberal friends of mine.
• Easy credit and government grants encouraged universities to grab as much of it as they can. Why leave money on the table?
• Higher education “expanded” (both in terms of numbers of students and of campuses) – and at the first drop in the number of warm bodies they needed to make up the shortfall.
• “Baumol’s cost disease,” i.e. “costs in industries without much productivity growth tend to rise, because they have to compete for labor with more productive industries.”
• From Dartblog: Many universities have succumbed to bureaucratization, that is, they are being run, not for their ostensible purpose, but for the sake of their staffers:
As any competent manager will tell you, the very nature of a bureaucracy is to grow, unless restrained by vigilant leaders. Bureaucrats always want to manage more people (the better to justify salary increases), and dismissing non-productive employees is against the ethos of these sprawling offices. In fact, each time a mistake is made in hiring, extra hiring takes place beyond it to compensate for the low productivity of the mistaken hire. And so it goes.
In industry, the pressure of competition obliges companies to run as leanly as possible; at the College, a surging endowment and the ability to raise tuition at rates far above inflation have ensured that there is no need to exercise any budget discipline at all — except after the market crash in 2008. Of course, private sector companies are not immune to such temptations: America’s car companies were so rich in the 1960s and 1970s that the size of their head offices and administrative functions soared. The same thing occurred at market-dominating IBM in the same period. Only after punishing competition hurt these behemoths did they put their houses in order.
• My personal favorite, as much as I hate it: the market has in fact spoken. Universities don’t compete on price, they compete on prestige. So if you run a university, you’re practically compelled to charge and arm and a leg (which itself signals prestige), and then furnish in return the lazy river, the rock-climbing wall, the beautiful campus with extensive plantings and sculpture, luxury dorms, gourmet food, and constant propaganda burnishing the university’s image in order to assure the customers that their purchase has been a wise one.
• Related to this: technology, regulation and fear of lawsuits. In 1970, no university needed an office of ten people whose sole job was to keep the Internet going. No university needed an institutional researcher (making more than any faculty member) to keep it in compliance with the accrediting agency. No university needed a psychologist and an army of hand-holding student life busybodies and academic advisors, because people seemed a little more mentally resourceful and robust (and less willing to sue the place if things didn’t work out). All of these people cost money.
• Related to the last two points: the expansion of the administration. Time was when faculty were expected to serve as dean for a couple of years. Now the university hires full-time deans. This suits the faculty just fine, because who wants to serve as dean? So not only are there more employees, they all have to be paid enough to entice people to take on the work. (You’d have to pay me a lot of scratch to become provost!) So now there is a class of full-time administrators for whom demand might outstrip supply, the complete inverse of tenure-track faculty positions.
But whatever the cause, I really hate it (especially as it does not seem to have had much effect on my salary!). I am certainly not looking forward to paying university fees for my own kids in the next few years. And the more that it costs, the more that university necessarily becomes a purely functional career preparation service (viz. the QEP that we have recently selected, which is all about making students “job-ready”). How can a university charge so much without explicitly promising that gainful employment shall surely follow? And how can an instructor possibly fail anyone who has “paid for this,” no matter how indifferent their performance? It saddens me that the idea that a university education should encourage critical thinking, informed citizenship, elegant composition, familiarity with great art and literature, and the development of a meaningful life philosophy, sounds more and more quaint with each passing year.