The Two-Income Trap - Elizabeth Warren [24]
With more applications flooding admissions offices every year, colleges are in the catbird seat, free to increase the price of admission with relative impunity. Parents may complain and students may protest, but since nearly two-thirds of parents view a degree for Junior as “absolutely essential,” universities can safely assume that families will find a way to pay.82 And that is precisely what has happened. After adjusting for inflation, in-state tuition and fees at the average state university have nearly doubled in less than twenty-five years.83 To put that in perspective, the price of college has grown twice as fast as the average professor’s salary, three times faster than the cost of food, and eight times faster than the cost of electricity.84 Tuition, room, and board now cost more than $8,600 a year at the average public university. To pay these fees the average family in the United States would have to commit 17 percent of its total pretax income to this one expense.85 A private education is even more prohibitive. Denise Robinson, a schoolteacher in central Texas, describes the cost of putting her older daughter through the local Catholic college: “You don’t make enough that you’re [rich], but you don’t qualify for financial aid. We were probably out at least $100,000 at the end.”
It should come as no surprise that six out of ten Americans also believe it is “absolutely essential” that university administrators keep tuition from rising.86 But despite public opinion, costs continue to spiral upward. University officials typically blame tuition hikes on the inevitable consequences of rising costs. They point to the high costs of keeping up with scientific discoveries, the need to provide technology resources for students and faculty, and the growth in financial aid—all valuable endeavors.87 Economist David Breneman gives voice to this view, claiming, “There is no problem for the federal government or the colleges and universities to solve other than the public relations task of explaining the economic facts of life to the populace.”88
But not all the cost increases are just “facts of life,” as Dr. Breneman suggests. For example, the American Association of University Professors blames spiraling administrative costs, which grew by 60 percent between 1980 and 1997.89 The American Council on Education points to “student expectations” for “a high level and wide variety of services,” which includes, among other things, “better food services.” 90 Another study shows that the more prestigious colleges have decreased the teaching loads of their undergraduate professors, giving them more time for research and other pursuits.91
And then there are sports. In winning years a few of the big programs might break even thanks to sell-out crowds and television deals, but for most colleges the costs to field teams in every sport from football to water polo must come out of the general budget. Basketball powerhouse Duke University is a case in point. Every year it takes $4 million to $5 million out of the university’s general revenues to pump into the athletic budget. Columbia University allocates even more, redirecting $7 million of its general revenue to make up the shortfall in athletics.92 In the race to win the most games, universities are spending more every year, and the deficits are getting larger. According to the National Collegiate Athletic Association, the overwhelming majority of colleges lose money on their sports programs. During the 1990s the average deficit grew by more than 50 percent for all but the largest universities.93
We point out these expenditures not because we are scrooges who don’t enjoy a good football game (one of us is a