It Doesn't Just Seem Harder…

"A tweet last week caught a bit of fire, so I thought it might be worth revisiting. Last week we had graduation, and we gave a Distinguished Alumnus award to a graduate who has gone on to achieve great things. A professor introduced me to her the day before; she mentioned that when she started in 1978, tuition was $6 per credit. (To be fair, someone on campus suggested that she might have been rounding down…) I found an inflation calculator online, which converted six dollars in 1978 money to twenty-three dollars now. Our current tuition is $135 per credit," Matt Reed writes for Inside Higher Ed. 

"The national minimum wage in 1978 was $2.35 per hour. At six dollars per credit, and 15 credits per term, you could cover full-time tuition in just over 38 hours of work. Over 15 weeks, that's about 2 ½ hours per week. Pretty doable, I think. That leaves out fees, books, and living expenses, but it's a good baseline.

The minimum wage in New Jersey in 2018 is $8.60 per hour. At 135 dollars per credit, and 15 credits per term, you could cover full-time tuition in just over 235 hours of work. That's almost 16 hours per week.

It doesn't just seem harder than it used to be. It actually is. Looking only at tuition and minimum wage, it's over six times harder.

And that's before accounting for faster-than-inflation increases in the cost of textbooks and rental housing.

Robert Kelchen did a quick analysis showing that one of the usual villains in the narrative about tuition -- so-called 'administrative bloat' -- is badly overstated, to the extent that it exists at all. The community college sector in particular has been parsimonious, often to a counterproductive level, in parceling out administrative positions. Spending in that area has been flat for years, despite increases in the need for staffing in IT, financial aid, and disability services, among others. That means that the remaining staff is doing more with less.

(A few years ago, I saw a piece that narrowed down so-called “administrative bloat” to the research university sector, and specifically to universities with teaching hospitals attached. That was because every single hospital employee was counted as “administrative.” It's measurement error.)

We know it's not primarily a function of inflated faculty salaries, either. A quick comparison of adjunct percentages over the years puts that one to rest quickly.

As longtime readers know, I believe that Baumol's Cost Disease is an inexorable factor. That's true directly, through the educational enterprise measured in seat time, and indirectly, through the cost of health insurance for employees and the institution.

Health insurance is clearly a driver. But tuition increases don't only reflect cost increases. They also reflect subsidy decreases, after inflation."

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.


Publication Date: 5/15/2018

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