Beau Buehler

Professor Jennifer Courtney

WRTG 2010-091
29 October 2014
The Rising Cost of Tuition in Higher Education
Introduction
The ever increasing cost of a college education stands as a hurdle in front of many college
students, prospective college students, and their families. Many families feel the pressure as their
children reach college age. As annual tuition rates approach the average familys yearly income,
the question for many parents of high school students is, how will they afford for their children
to attend college? In her article, "The $375-Billion Question: Why Does College Cost So
Much?," Goldie Blumenstyk notes that many families must take drastic measures, such as taking
out home equity lines of credit to help pay for their children to go to college (2008). There are
some individuals who find that college is too far out of reach financially, while others rack up
enormous amounts of student debt trying to pay for an education.
Many would ask if the cost of higher education should be the limiting factor for students
who otherwise earned the opportunity to attend a college or university. In John Boehner and
Howard McKeons analysis, The College Cost Crisis, they identify that education is the great
equalizer in our nation. It can bridge social, economic, racial, and geographic divides like no
other force (4). One might question what negative implications on society exist, as a result of a
high percentage of the population remaining uneducated due to financial pressures. The topic of
tuition increases causes many of these types of underlying questions. The answer to these
questions lies with ongoing studies of empirical evidence.

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An ongoing conversation is taking place between government officials and the academic
community on the topic of the rising costs in higher education. In my analysis of this
conversation, I have identified three major topics. The first being, public opinion and views on
high tuition costs, which contradict the position of some university and college advocates.
Tuition discounting and inflation are two factors that play into the actual price that students pay
colleges. In his article Why Tuition Costs Are Rising So Quickly, Robert Martin defines this
cost as net tuition, (90). The second topic defines the probable causes of tuition hikes and the
resulting effects that they have on both the academic community and the public. The third
defines the various proposals for tuition reform. In reviewing the literature on the topic of rising
tuition costs, I will show that the current viewpoint of accepting high priced tuition for hopes of
economic return proves unsustainable by the current trend in tuition hikes.
Views on High Tuition Cost
Studies presented by Martin, Bohner and McKeon provide empirical evidence that tuition
rates are rising. Many families view college as becoming less affordable with 69 percent of the
parents of high school students . . . worried about being able to afford their childrens college
education (Boehner & McKeon 12). Their concerns clearly warrant attention. The relative real
burden for students attending public universities has increased by approximately 80 percent
during the period 1980-95 (Martin 4). In more recent years, Boehner and McKeon identify that
in 2003 four-year public college tuition increased 9.6% over the year prior, totaling over $4000
on average (9). Analyzing the cost of tuition is not as simple as it seems. Even though the
sticker price, (cost before financial aid and scholarships are applied) of college tuition appears
to have risen dramatically, to fully understand just how much tuition has actually risen, the other
variables that play into the cost need to be examined (Martin 3). The cost of tuition needs to be
viewed as net tuition.

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Determining the rate at which tuition has increased, requires adding discounting into the
equation. In recent years there have been substantial monies invested in federal student aid. In a
report as seen in Boehner and Mckeons article, in the year 2003, the U.S. federal government
invested over $11 billion dollars in higher education with a maximum Federal Pell Grant of
$4050 (7). The numbers look good on paper, but even though federal student aid is on an upward
trend, it is not enough to keep up with the rising cost of tuition. We can see this because their
analysis also shows that there was only about a 0.45% increase in federal student aid in the same
year that there was a 9.6% increase in tuition (7).
Another variable worth consideration is the rate of inflation in relation to yearly tuition
hikes. If family wage increases were the same or greater than annual increases in tuition, then
there would be no grounds for concern. Unfortunately, however, this is not the case. Martins
analysis proves that the real cost of higher education has risen well in excess of the rate at
which real incomes have risen (19). Boehner and McKeone are in agreement with Martin. They
argue, that since wages cannot keep up with tuition rates, many people who should have the
opportunity to obtain a higher education cant because they are unable to pay the high prices (9).
It seems clear that the cost of education is rising, but there are some who argue that the
increase is not as bad as the public thinks. In his speech Myths and Reality about U.S. Higher
Education, Richard Ekman, who is the President of The Independent Council of Colleges, notes
that the cost of obtaining a college education is not a large amount of money in relation to the
lifetime earnings premium of being a college graduate (394). This is something that we have all
heard, but is it something that college advocates are simply using to bring students in: making
them feel as though they are not being robbed with overpriced tuition? Interestingly, in Boehner
and McKoenes analysis we find that even though the high tuition rates seem to scare many
people into thinking that they are unable to pay for college, they still believe that they are better

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off paying the high tuition rates than not attending college at all. Even though nearly half of the
population in the United States feel overburdened by excessively high tuition, while exhausting
their resources, they still will try to obtain a higher education (11-12).
What needs analysis, then, is the sustainability of the recent model of tuition hikes. Jaison
R. Abel and Richard Deitz have compared the cost of attending college to the long term benefits
of having a degree. In their article, Do the Benefits of College Still Outweigh the Costs?, they
find that between 2001 and 2013, the average wage of workers with a bachelors degree
declined 10.3 percent, and the average wage of those with an associates degree declined
11.1 percent; for high school graduates, the average wage dropped a more modest 7.6 percent
(4). It appears that the gap between college graduates earnings and high school graduates is
getting smaller, but it is recognized, in their article, that today the benefits received in the long
term still outweigh the upfront costs (8). Ultimately, what is at stake in the conversation, is that
even though many are able to attend college today, if nothing is done about the rise in tuition,
then college opportunity for students will diminish.
Probable Causes of Tuition Hikes and Its Effects
Before determining a solution to the problem, the root causes behind tuition hikes needs
definition. Americans believe wasteful spending by college and university management is the
number one reason for skyrocketing college costs (Bohner & McKeon 5). Martin identifies a
veil of obscurity (92) in his article when reviewing how universities and colleges manage their
finances. He notes that the practices used by institutions are misleading and ... do not include
capital charges in the computation of costs (92). Take note that universities do not make it easy
for the public to see why tuition is increasing. It is very reasonable for the public to assume that
college and university spending problems are the key cause behind tuition increases. It is difficult

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to attribute an exact dollar amount to over expenditure, however, clearly there is a rise in cost per
student attending college.
Another approach to analyze the sizable increases in tuition turns the finger back towards
the public. Martin brings to light societies refus[al] to honor the implicit social contract that
provided [their] educations (95). As private donations and public support decrease, making up
additional revenue is a must (Blumenstyk). The only way that the colleges and universities are
able to do this is by charging more for tuition.
Fewer families are able to afford to send their children to college as a result of
educational institutions charging more for attendance. Bohner and McKeon identify cost factors
prevent[ing] 48 percent of college-qualified high school graduates from attending a four year
institution, and 2 percent from attending any college at all (4). Students who must find ways to
pay for college on their own, are often finding themselves overwhelmed with tremendous
amounts of student debt. By the end of 2013, aggregate student loan debt in the United States
exceeded $1 trillion, and more than 11 percent of student loan balances were either severely
delinquent or in default (Abel & Deitz 1). It is obvious that changing the current trend in higher
education is something that needs attention.
Various Proposals for Tuition Reform
Unfortunately, battling the rising cost of tuition in not an easy feat. The government has
tried to intervene with the Federal Pell Grant Program, but Boehner and McKeon identify that
even as the government provides more money to students, it is not helping to reduce tuition.
Dramatic increases in federal spending for higher education programs have only made colleges
and universities less accountable to parents and students (10). Universities and colleges always
look to get their hands on additional funds. It appears that simply giving more aid to students is
not the answer to reduce the net tuition paid by students. Universities see it as yet another

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revenue source and in reality, do not pass the benefits on to students. The public identify that
federal funding may not be the answer to combat tuition cost: 45 percent of American adults
believe federal funding ... should remain the same, and 7 percent actually support decreasing it
(Bohner & McKeon 13).
Dealing with the crisis requires extensive involvement of the institutions themselves.
Many proposals to combat rising tuition currently exist. Jung Cheol Shin and Sande Milton
suggest one in their article titled Student response to tuition increase by academic majors:
empirical grounds for a cost-related tuition policy. They argue for tuition based on students
majors rate of return (12) and not a flat rate, like in many colleges and universities today. This
proposal could be more palatable to students and parents than simply increasing tuition at a
single rate for all undergraduate students (Shin & Milton 732). Shin and Milton are looking at
the problem from the administrative perspective. This is not a proposal to reduce the amount of
money paid to colleges and universities, but rather a way that they can reduce the tuition for
some and bring in more students. Their argument stands on the ground that students in high rate
of return majors are not sensitive to tuition increases because they expect greater benefits from
their college education (12). It does not, however, address overspending.
In her article The Future of Tuition, Sara Hebel addresses this problem by proposing
that institutions ... cut costs by focusing their missions, avoiding duplicate academic programs
in their states and cooperating with other institutions (3). This idea may seem a little far-fetched,
but it may take implementations like this to keep the cost of tuition under control.
Conclusion
In the conversation about the rising cost of higher education, the college opportunity
becoming less obtainable for our nations youth is a clear problem. Not only is the cost of tuition
rising at an alarming rate, but it is proven to be unsustainable as the rate of return is becoming

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smaller. Even though it seems unlikely to eliminate any increases in tuition cost, taking action to
stabilize the current crisis that higher education is facing.
It is very challenging to come up with a solution that works for both the university and
the student. It is the same relationship that a business has with its customers. Universities want to
have as many customers as possible and charge the highest rate possible to yield the most
capital, while students want to pay as little as possible for the product: their education. As the
conversation continues, taking the greater good into account is a must in order to improve
accessibility to higher education. There needs to be more discussion about getting the cost of
tuition under control. Formulating new ideas to reduce costs at the institutional level is a great
necessity in order for higher education to remain a sustainable part of society.

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Works Cited
Abel, Jaison R., and Richard Deitz. "Do The Benefits Of College Still Outweigh The Costs?."
Current Issues In Economics & Finance 20.3 (2014): 1-12. Academic Search Premier. Web.
5 Oct. 2014.
Blumenstyk, Goldie. "The $375-Billion Question: Why Does College Cost So Much? (Cover
Story)." Chronicle of Higher Education 55.6 (2008): A1-A15. Academic Search Premier.
Web. 4 Oct. 2014.
Boehner, John, and Howard P. McKeon. The College Cost Crisis: A Congressional Analysis of
College Costs and Implications for America's Higher Education System. Washington, D.C.:
U.S. House Committee on Education and the Workforce, 2003. ERIC. Web. 28 Sept. 2014.
Ekman, Richard. "Myths and Reality About U.S. Higher Education." Vital Speeches of The Day
79.12 (2013): 392-396. Academic Search Premier. Web. 4 Oct. 2014
Hebel, Sara. "Same Classroom, Different Price." The Future of Tuition 50.4 (2003): A 10. The
Chronicle of Higher Education. 19 Sept. 2003. Web. 28 Sept. 2014.
Martin, Robert. "Why Tuition Costs Are Rising So Quickly." Challenge (05775132) 45.4 (2002):
88. Business Source Premier. Web. 4 Oct. 2014.
Shin, Jung-Cheol, and Sande Milton. "Student Response to Tuition Increase by Academic Majors:
Empirical Grounds for a Cost-Related Tuition Policy." Higher Education 55.6 (2008): 719734. Professional Development Collection. Web. 4 Oct. 2014.