Bernie Sanders wants to make college free, and who wouldn’t? College is so expensive today. It leaves generations of students saddled with mountains of debt. I contend that Sanders proposal to make college affordable would have the opposite effect, driving costs up for the taxpayer. To see why, we will look at higher education spending over the past 40 plus years. During this time, the cost to attend college more than tripled, using constant 2015 dollars. I will use my experience at a large public flagship state university from 2008-2012 to provide anecdotal evidence as to why college costs are exploding in addition to cold hard facts.
How Much Has College Gone Up Over Time
In 1965, the government made federal student loan support a priority in the Higher Education Act of 1965. It was hard finding national average college attendance figures before then. However, I did find the archives for the University of Pennsylvania, which states the annual fees charged every year going far back into the past. In 1950, the total cost to attend the Ivy League school was $1,365. To make that equivalent to the figures above, I used an online inflation calculator and found that to be $13,581 in 2015 dollars. The rate of growth between 1950 and 1975 in real college costs seems to be muted. In fact, the real growth does not pick up until the 1980s.
What happened in 1980? The Department of Education was created. It oversaw expansion of Pell Grants, Stafford Loans, the creation of family PLUS loans to allow parents to take on tons of debt for their kid’s college, and other measures that drastically expanded the pool of available credit for college. Even though massive federal intervention in the college marketplace was a big contributor to the massive increase in college costs, there are other factors as well. A big part of the increase in tuition is because colleges can get away with it. The return on each dollar invested in education at top educational institutions is over 15% annually in many cases. When college is such a valuable proposition, the student customers are willing to pay more to get it.
The Dept of Education Allows Anyone To Charge Any Price, Even a For Profit Strip Mall College
Private for profit colleges are a big reason why education costs are exploding. They’ve taken good data that shows college is a good investment and applied it to their untested institutions run by less qualified professors. If you spend $10,000 a year to go to the University of Virginia, you probably made an outstanding investment. If you spend double that to go to your neighborhood for profit college, I believe the results will be very bad.
However, the Department of Education does not differentiate between Harvard and a for profit college that is worse than most people’s high schools. The Department hands out money to schools that pass its very middling requirements without questioning it. Some of these for profit schools are so aggressive that they visit Veterans hospitals and try to get wounded warriors to give away their education benefit to them. You have a bunch of strip mall colleges catering to non traditional students that are able to charge real college prices thanks to the Department of Education. If this unlimited cash spigot was turned off, a lot of these schools would go bankrupt because no private lender in their right mind would lend these colleges students a dime.
College Is So Expensive Because of the Extras
When I started at the University of Florida, tuition was $3,800 a year. Now, that cost has risen to $6,313, and it will continue to climb. While I was there, the administration pushed a brand new student union that you see above. The initial cost was supposed to be $90 million. It was to be funded by a $130 a year charge to every student at the university. The students were presented with a referendum in 2010 whether or not they supported the new expenditure, and 56% of students voted against it.
Not to be bothered by a direct expression of student opinion, where about 20% of the student body turned up to vote, the administration bided its time. In 2013, UF leadership continued anyway in spite of the clear NO vote that students expressed. They claim it will be funded by $75 million without any student fee increase. However, $50 million of that is a bond issue, and the balance is paid for by various pots of money from student fee revenue. In other words, the increase in tuition is indirectly footing the bill instead of going to more faculty and research facilities.
Another expensive project was the Southwest Recreation Center at UF. It cost $16.3 million to expand the gym. While the facility is incredibly nice, it in no way relates to the core function of the university, which is to provide teaching and research.
These two examples of runaway spending are no doubt influenced by the drive for more, more, more sponsored by administration that needs a reason for existing. We have had all kinds of new divisions and departments at colleges, such as Multicultural Affairs, Greek Affairs, Asian American Affairs, LBGTQ Affairs, and more. I’m not attacking the good work that these groups do on campuses, rather I’m questioning the massive expenditures on salaries of administrators that do not relate to the educational mission of the university.
At Most Schools, Athletics Is a Big Money Loser
If you go cut out the top 25 NCAA athletic programs, you’ll find that the athletic departments depend on student fees to pay for 50% to 80%+ of their budget. College is so expensive because at schools like Georgia State for example, the average student pays $554 a year to fund athletics. University of Florida didn’t have this problem, but the high levels regulation and federal mandates in athletics with Title IX require that money losing sports such as women’s lacrosse receive substantial funding if a school wants to have a money making program like men’s basketball. However, even these flagship sports teams lose money at many schools, underscoring the severity of the problem. I’m in no way denigrating the importance of allowing women the same athletic opportunities as men, rather I’m saying that the regulations that require such high levels of spending make athletic programs a poor investment, and students are the ones who pay for it.
Trim the Fat and Access to Loans and You Could Trim College Costs
When I was visiting Europe, I stayed with some guys that went to one of Europe’s best universities, Ludwig Maximilian. I asked where the campus was so I could walk around and look at the beautiful sights. They responded to me that the campus was scattered around the cities and most of the buildings were quite ugly. The free college model that Europe employs is one of bare bones infrastructure where education is the focus. You don’t see the prevalence of bell towers, manicured flowers everywhere, $16.3 million student gyms, or $75 million student cafeterias. If Bernie is advocating this model of education, it would be a drastic departure from the current way we do things in America.
College is so expensive because of the vast increase in the scope of what college is supposed to do for us. It used to be a place where you got a good education and went into the professional workforce. Now you have coaches that make millions of dollars a year, gigantic student health centers, bloated administration, hugely expensive facilities, and for profit colleges that seek to prey on people’s dreams of moving up the economic ladder while saddling them with enough debt that ensures they’ll never get off the first rung.
College is so expensive because the Federal Government gives access to no questions asked student loans for any program. You can study art history or engineering, but the loan disbursement is the same. That’s fine if the tuition is reasonable, but if you are taking on $150,000 of debt with a degree that has a poor payoff, no one would lend to you. The inability to access credit kept the price of college down. Think about the housing crisis. When a bunch of people were given loans that otherwise couldn’t afford a house, we had a real estate bubble with massive housing price increases followed by a crash. With the Feds giving out the student loan checks, colleges can charge anything they want because it’s free money. Also, the tax payer is now on the hook for trillions of dollars in the future. Under the new Obama administration’s rules, if you don’t pay your loans back in 20-25 years, they’re forgiven. If you work for a not for profit, they’re gone after 10 years. This ease of access to credit, which has been drastically expanded in the past ten years, will continue to push college costs higher. If the bar lets you run up a tab on someone else’s bill, why not go ahead and get wasted drunk?
If you want to lower costs for college, don’t raise a massive tax to pay for it, demand that athletic departments are shrunk to a smaller size. Stop multi-million dollar facilities from being constructed. Fire half of the college administrators across the country. Stop providing federal loans to for profit colleges. Create a lifetime borrowing cap for federal student loans to allow private lenders to decide if your master’s program is a good risk and encourage the use of community college for the first two years of undergraduate school. Stop allowing companies like Aramark the exclusive right to sell food on campus, thus driving up the costs to eat. End mandatory first year requirements to live on campus to protect the expensive student dorm investments the school made. College is so expensive in America, but it doesn’t have to be. When we stop building $75 million mausoleums, we will finally be on the right track.
Think the amenities of college are worth it? Do you feel like your college education was too expensive? Do you think I missed a reason why college costs so much? Comment below!
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