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Why are US Universities so Expensive?

Why are US Universities so Expensive? main image

In my last post, I talked about the rise of private, and particularly for-profit, universities in the US. If for-profit education is not the solution to sky-high tuition fees (I don’t think it is), what is? Well, in my opinion, students and families really only have themselves to blame for the high tuition prices at US universities. I think they can be explained in four main ways: bureaucratic bloat, the athletic emphasis on campus, massively expensive and unnecessary luxury perks the university creates to attract paying students, and lastly, the loss of public subsidization of higher education.

Only a couple of decades ago, attending a US university as noble as UC Berkley cost $540 a year (US$2,756 in 2010 dollars). Now the pages have turned, and attending this fine public institution will set a family back more than $30,000 a year. At the uber-elite quasi-for-profit schools like Harvard and Stanford, the annual price tag can be upwards of $60,000. I say quasi-for-profit because they are not actually for-profits; they are research universities that use their profits to finance research.

Problem 1: Bureaucracy

Bureaucracy is the bread and butter of government, and there is little else that can be said or done.

Problem 2: An over-emphasis on sports

Sports are seen as essential at almost all US universities. But if you look at the massive costs they bring with them and little educational benefit, it seems hard to justify. US universities often waive tuition fees to students who are good at sports to attract them. A friend of mine is excellent at golf and got a full ride to the same university I would have attended; while she got to attend for free, my family would have to shell out $30,000 a year, only because I was not as proficient at hitting small balls into gopher holes.

Of course, some sports are actually profitable to a select few universities. But this is often negated by the fact that the highest-paid employees in almost every state in the union are football coaches. (The highest-paid employee of every state is employed by a university, usually in sports). So my advice is simple: eliminate some sports programs at every US university. Make it so only the very best of the best can make it into these new ultra-competitive spots. Does every university really need a golf team? (I might add, does any university need a golf team?)

Problem 3: Too many frills

You get what you pay for: if you want a university that has the newest, best and coolest campus so you can brag to friends, you will pay accordingly. Students should not just be attracted to the university with the best “frills”. And university boards of directors should aim to maximize how every dollar increases the long-term success of students.

This is at least partly the fault of students, because they are often asked to vote on a new project and, by saying yes they effectively vote to increase their tuition fees. An epic example of frills that universities provide is the fact that a number of US universities are currently building “lazy rivers” in their pools. That’s right. Instead of encouraging their students to study hard, they are actually encouraging their students to be less efficient by lulling and dazing around in the LAZY river. (One of the universities in question, probably realizing the irony, has renamed the lazy river the “current river”. Right.) But this is a typical example of a frill that US universities spend many, many millions on to get you to choose their university over all others… so in turn, you can bring your parents’ retirement savings to them.

While it might be cool to have that at your university (I really do wish my university had a lazy river, I would never leave), it is simply not worth it. Another trick many universities engage in is to justify the tuition fee price by citing the frill; in reality, the frill justifies the price. Simple logic dictates that the less frills a university has, the cheaper the fees would be. But unfortunately, community colleges (universities with next to no frills) have a poor reputation, which is a shame; math is going to be difficult regardless of whether or not you have a lazy river on campus (and the lazy river might actually mean you spend less time studying the math).

Problem 4: Loss of public funding

Finally, here is good news of why the rise in tuition fees is not only the students’ fault: the government has slashed subsidies to higher education to augment massive bloat in other areas of government. Most notably, prisons. The state of California spends $1 billion more per year on prisons than on education. In other words, the state spends more money on supporting those who have wronged society than supporting those who have done well and mean to do better. To make up for the difference, students are asked to pitch in…. to finance both the athletic department and the governmental bloat.

To conclude, our education system has numerous flaws, but labeling these mistakes as “systemic failures” is incorrect. The problem was not created by the government, but by the students and parents who expect and demand both top-level sports teams and fun but unnecessary amenities. The rising cost of education will not be fixed by bringing in more private sector providers; it will be fixed by students focusing on long-term goals instead of short-term gratification. So we need to ask our 18-year-olds to be mature…. Costs are going nowhere but up!

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Written by Felix von Wendorff
Felix von Wendorff studies econometrics as an international student at Goethe University in Frankfurt, Germany. He grew up in California and moved to Germany to take advantage of the great (and free) education system. In his increasingly shrinking free time, he enjoys running, budget traveling and reading. 

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