Thursday, September 2, 2010

College Tuition: Explosionary Growth

The Economist has published an interesting graph of the inflationary trends of income, consumer prices, housing, books etc for college, and tuition. We show it above. The following are interesting observations.

First, now that we have managed to adjust reasonable house prices we have close tracking of housing, salary and consumer price inflation. Namely things generally speaking are not too bad.

Second, books are extortionary. Frankly calculus is calculus and French has not changed that much. Macroeconomics as we have stated is a total waste since there is no agreement and civil engineering is fairly static, no pun intended. EE and CS are for the most part taught at top schools from notes any how since it changes so much, and medical books are relatively cheap per pound so why worry.

Third, tuition is obscene. College administrators have added so much fat to their staff that we are seeing the point that there is more university office space dedicated to overhead than to academics. This is fattening the administrators beyond measure and burdening the students so that they will never get out of the hole they get in. The other trend seems to be that now college presidents are all too often individuals who most likely could not even get a faculty position, they are administrators, and often at odds with the faculty.

So what does this tell us? The Economist states:

FOR decades, college fees have risen faster than Americans’ ability to pay them. Median household income has grown by a factor of 6.5 in the past 40 years, but the cost of attending a state college has increased by a factor of 15 for in-state students and 24 for out-of-state students. The cost of attending a private college has increased by a factor of more than 13 (a year in the Ivy League will set you back $38,000, excluding bed and board). Academic inflation makes most other kinds look modest by comparison. Students may not be getting a good deal in return.

The Economist reinforces what I have been saying for a decade now:

The Goldwater Institute points to a third poison to add to rising prices and declining productivity: administrative bloat. Between 1993 and 2007 spending on university bureaucrats at America’s 198 leading universities rose much faster than spending on teaching faculty. Administration costs at elite private universities rose even faster than at public ones. For example, Harvard increased its administrative spending per student by 300%. In some universities, such as Arizona State University, almost half the full-time employees are administrators. Nearly all university presidents conduct themselves like corporate titans, with salaries, perks and entourages to match.

Indeed the president do. Limos, jets, staffs beyond belief, and there was a time when the president actually kept teaching. Now the president is chosen for a variety of politically correct reasons. There is no Conant, no Killian, no leaders whose vision of education we look towards. And there is no control on these exploding wastes of money. Perhaps this is the next bubble.