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The underlying cause of the high cost of college is an inability to objectively demonstrate quality or the value added by a college. Currently, college rankings are determined by the amount of money they have and spend. Those with more prestige are able to charge higher tuition. Higher education institutions need to be incentivized to adopt a system which measures the knowledge and abilities of students and make those results publicly available.

This would involve organizing colleges to prioritize student success. They can reduce spending on programs which do not advance their missions of instruction and research. This would include removing institutional support of intercollegiate athletics and frivolous research. It would also entail eliminating student services which do not substantially improve the acquisition of skills or learning outcomes. The federal government can fund the research necessary to determine what interventions will lead to the formation of a successful system and incentivize colleges to adopt them.

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The high cost of college prevents many from attending or causes others to go into debt at an early age and delay life plans.

Why does college cost so much?

Because there is no objective measure of quality, prestige is determined by how much money a college has and spends.

Individual pricing by private colleges allows them to charge each student the most that student and family are willing to pay, now and in the future, to attend that college. The steep increase in wealth of the top 5-10% enables them to afford the higher tuition. Financial aid, loans, and tax policy make more money available. Colleges are aware of this and want at least a portion of those funds.

State appropriations decreased in the 1990s and early 2000s forcing public universities to raise tuition. But they raised tuition much more than the reduced funding.

Both private and public colleges have dramatically increased spending on intercollegiate athletics, research, buildings, administrators, and other programs related to societal issues and to the personal lives of students. They then pass the cost on to students.

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Purdue University has frozen tuition for the last 13 years while improving its reputation. This has saved students $6,000 per year, reduced the amount of debt, and improved graduation rates. How did it do it and why don’t other universities do the same?

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