Who’s guilty of the most egregious price gouging?
In my opinion, it’s colleges and universities. Tuition and other costs at many public and private schools have doubled in the last six years – and have tripled or quintupled since 2000.
That’s far more than just about anything you can name. Medical care? It’s up 600 percent since 1978, but college tuition and fees are up 1,100 percent since then.
Some educators trumpeted the fact that tuition increased “only” an average of 4.8 percent last year. But that was almost three times the 1.7 percent rate of overall inflation.
Almost all schools are now pricey. UCLA, which used to be known as a great bargain, estimates an undergrad will need $32,000 to attend next year. Of course, the student could economize by living at home. (Did someone say “Ugggh”?) That’ll cost “only” $23,500.
Even the affordable alternatives, the CSU campuses, are surprisingly expensive. Tuition and mandatory fees come to more than $6,200 at Cal State Long Beach. Throw in books and other likely fees, and you’re looking at writing another check with a comma in it. And those prices assume the student is living at home.
Oh, and if you have kids who’ve matriculated lately, you probably know there’s a nasty addendum: Colleges have it worked out to where it’s difficult to graduate in only four years. Credits mysteriously don’t transfer or expire. Or your student cannot possibly get in the required classes in time. So you end up paying for an extra semester. Or two.
The result: Students graduating with tens of thousands in debt. Middle-class parents shorting their retirement savings to send their kids to school. Lower-middle-class kids not going to college at all.
But we, the “customers,” are stuck. We are at the mercy of the higher-ed oligopoly. We have no real pricing power.
What’s particularly maddening is that this price gouging has been running unabated for years and no one is doing anything meaningful about it. Elected leaders from Sacramento to Washington and in most places across the fruited plain are eager to hold inquisitions whenever gasoline prices go up
25 cents a gallon or when insurance companies raise premiums $10 a month. But they sit silent when universities jack up tuition and fees by an average of 5 percentage points above the rate of inflation, as they’ve done most years in the past decades.
The political response to the ever-higher cost of higher education has been to give students grants, loans and scholarships. That helps some individuals, but alas, it only incentivizes colleges to raise rates. We need something that pushes schools to lower costs for everyone.
My longstanding hope has been that the Internet – which has disrupted so many industries – will do the same with higher education. I was interested to read the article in the Los Angeles Daily News last Wednesday about the so-called Massive Open Online Courses in which thousands of students take basic classes online. That’s a way to drive costs down. (Surprise, surprise: Professors don’t like it.)
My wish is that this marks the start of an Internet-based revolution in which students can get a rigorous education with the goal of getting a meaningful degree at a fraction of today’s cost.
Also worth noting: Assemblyman Dan Logue borrowed an idea taking root in Florida and Texas and introduced a bill in the state Legislature in December that would create a degree program that would cost $10,000.
That’s not $10,000 a year. That’s $10,000 total.
His bill would create three pilot programs (including one in Long Beach) “with the goal of creating a model of articulation and coordination among K-12 schools, community colleges, and campuses of the California State University,” his bill reads.
The bill envisions high school students earning college credits and going on to a community college and eventually a CSU campus – with all the educational institutions coordinating such a plan.
The best thing is that it would force the schools to keep costs down. The next best thing is that it would incentivize them to get students through quickly; meaning that they’d make sure that credits are transferable and that the students graduate on time or even early. No more of those nasty addendums.
Charles Crumpley is editor of the Business Journal. He can be reached at email@example.com.
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