Why Does College Cost So Much?

Abstract

College tuition has risen more rapidly than overall inflation for much of the past century, and in recent years this growth has accelerated. The rhetoric of crisis now permeates public discussion of the cost of attendance. Much of what is written ties rapidly rising tuition to dysfunctional behavior in the academy. Common examples include prestige games among universities, gold-plated amenities, and bloated administration. This book offers a different view, one that places higher education firmly within the larger economic history of the United States. A technological trio of broad economic forces has come together in the last thirty years to cause higher education costs, and costs in many other important service industries, to rise much more rapidly than the inflation rate. The main culprit is economic growth itself. This finding does not mean that all is well in American higher education. A college education has become less reachable to a broad swath of the American public at the same time that the market demand for highly educated people has soared. This affordability problem has deep roots. The book explores how cost pressure, the changing wage structure of the U.S. economy, and the complexity of financial aid policy combine to reduce access to higher education below what we need in the 21st-century labor market. This book is a call to calm the rhetoric of blame and to find instead policies that will increase access to higher education while preserving the quality of our colleges and universities.