America's most expensive colleges

Forbes has the story:

Nationwide, the median tuition at a four-year school was $7,490 for the 2006-07 academic year, a 2.3 percent increase over a year ago, according to The Chronicle of Higher Education. But that includes many state-run universities, where in-state residents are charged a pittance. The median tuition at private schools was more than twice that amount, weighing in at $15,900, up 3.4 percent over a year ago. And that figure doesn't come close to the nation's most expensive colleges — 121 of them charged more than $30,000 this past year. Add room and board and other assorted fees, and the bill climbs beyond $40,000.

The Forbes story poses the issue by treating "college education" as a product which, unlike the industrially manufactured products, keeps going up in price:

At the same time tuition has been soaring, technology-driven product improvements have made things not only better, but cheaper. Take Apple's iPod, which lets today's teenagers download any song for 99 cents — one-quarter of the price (in constant dollars) that kids in 1975 paid for a 45 rpm vinyl record. And that's without factoring in the huge quality improvements that have removed the snap, crackle and pop noise featured as regular background fare on vinyl records.

But in the academic world, rules of efficiency don't generally apply. ...

This efficiency argument is certainly valid from the point of view of students who see themselves as consumers of college education. But it misses what I think is a key feature, which becomes clearer when you look at higher ed from the producers' side: the set of universities is more like a sports league. I would guess the revenues of the National Football League (for example) have been growing far faster than inflation; and so have the revenues of the university system.

There are other parallels, too. The number of universities is limited. New entrants have a reputational entry barrier. Competition for stars is intense; and so is the rush for gleaming buildings, swanky student amenities, huge stadiums and swimming pools, .... However, unlike sports leagues (which have been using every new mass communication technology to reach more people in more ways), universities just can't increase the number of eye-balls per player professor; nor do they have advertisers' support! From this angle, the faster-than-inflation rise in college expenses doesn't look all that surprising to me.

However, the really important question is: does this way of explaining the problem of fast-rising tuition costs lead to some way solving it? I don't know.