Saturday, January 27, 2007

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.

4 Comments:

  1. Rahul Siddharthan said...

    the set of universities is more like a sports league.

    Literally true. Whenever some snobbish (usually NRI/ABCD) parent tells me "oh, my son/daughter goes to X university, you know, that's an Ivy League university..." I respond "hm, isn't that an athletics league of some kind?" (It is, but they usually don't know that.)

    In India too, most colleges have "sports quotas"... at least they did in Delhi. And in Oxford/Cambridge, being a sufficiently good rower will practically guarantee you admission...

  2. gaddeswarup said...

    May be countries like India can try to attract foreign students. Perhaps certain percentage of students in some institutions or new institutions. From some of the universities in USA and Australia which have been trying to attract foreign students for money, I think that are many teachers in India who can teach similar courses ( other facilities like research facilities for graduate types may be a problem). In my student days in Chennai, I saw quite a few students from Malayasia, Srilanka and Africa.

  3. Rahul Siddharthan said...

    pennathur -- for your information, IISc comes under the ministry for human resource development (it's a similar setup to the IITs), and TIFR comes under the department of atomic energy. (I don't know about BHU.) True, the starting impetus came from a private industrial house (Tata in both cases), but that was decades ago (in IISc's case, nearly a century ago) and neither Tata nor any other private sector organisation has any role in running these institutions.

  4. Abi said...

    Swarup: Our regulatory mechanism doesn't allow high quality institutions to flourish. With our current set up, I think the Malaysians and the Sri Lankans are doing the right thing by not coming here for higher studies.

    Rahul: Thanks for responding to Shiva (Pennathur)'s comment about IISc and TIFR!

    Shiva: You are certainly right about the lack of good undergraduate colleges, except for isolated pockets.

    But let me add to Rahul's comment here; BHU comes directly under Arjun Singh. And Jadavpur University is in a state ruled by CPM-led Left Front for almost 30 years now. So get off your left-bashing; it's not good for your heart, and it muddles your mind ...