Therefore, Chuck L's argument that education cross-subsidizing research does not seemt o hold water. In my institution research is 100% supported by outside grants - we do not get a penny from tuition.
IMHO, the reason of tuition hikes is simple - prices tend to increase to whatever the market can bear. Since colleges are basically credentialing institutions for the rich, the rich's ability to pay increases the price for everyone (just like with Manhattan real estate.)
Wojtek
On Tue, Mar 9, 2010 at 11:36 PM, Chuck Loucks <lbo at hvgreens.org> wrote:
> Doug,
>
> The article, "College: best way to make a buck, especially if you've
> already got a few" was a disappointment when it came to the analysis. In
> particular, the conclusion that the reason college costs have risen is due
> to cuts in state aid could have been lifted from the University of Michigan
> playbook. Each year for the last 30 years, UofM has justified tuition/fee
> increases of around double the inflation rate with vague and lame exuses
> citing the need to maintain "quality" and cuts in state aid. I have a
> simple question, since LBO #125 shows a graph showing the inflation rate for
> tuition beats out even medical cost increases, why should state aid be
> required to keep up with such a voracious appetite for cash? I really don't
> understand, what are undergraduates getting today their parents did not 30
> years ago (whatever it is, students today pay a lot more for it)? If
> anything, you would think the cost of providing a college education would
> decrease with increased use of technology, but no, it goes the other way.
>
> I would suggest that the reason for increased costs at 2 X CPI_U is due
> to increase staffing at Universities. UofM has dramaticly increased its
> staffing levels in the last 30 years. So what are these staffers doing? How
> about supporting research functions. In other words, we are using tuition
> increases on undergrads and their families to subsidize research. I suspect
> there is an element of truth to the argument that the more governement aid
> that was made available to universities, the more they raised tuition costs.
> There is also the skewing of household income over the last 30 years; the
> richer families have also been bidding up the cost of a university
> education. I'd say the double wammy of richer upper 20% households and
> government increases in aid formed the perfect storm. There never have been
> any real cost controls on tuition increases, had there been, I'm sure the
> picture today would be different. It is foolish for the government to
> increase student aid without cost controls on university tuition increases.
> Education costs more because universities can charge more and they do!
>
> Disappointed in Ann Arbor, MI
> ChuckL
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