Higher Education Costs

Somehow both the left and the right miss the issue on Higher Education costs. Recently from one of the Libertarian web sites, Cafe Hayek, they state:

This graph shows changes, in the United States from the early 1960s, in the average annual monetary-income return to each year of college education.  For this time period, these returns reached a low in the mid-1970s – looks like a mere two years before I started college in 1976 – and began rising impressively starting in 1981.  These returns have leveled out (with some year-to-year variability, of course) since about 2000. When an asset – in this case, human capital – becomes more productive, it’s neither a surprise nor a ‘market failure’ for the cost of acquiring that asset to rise.

Let's briefly look at some facts,  an oftentimes brutal exercise for some Academics:

1. In 1965 the costs of MIT per year for tuition was about $1,500 and room and board was about the same. This ration was somewhat constant for the next 25 years. Now tuition is 3 time room and board.

2. In 1965 that $1,500 annual tuition resulted in a starting salary of $9,000. That was a 6:1 ratio in salary to tuition. Now tuition is about $60,000 and starting salary on a good day can be as high as $90,000. That is a 1.5:1 ratio. Is that good?

3. Universities have more buildings than ever and at costs per sq ft that are extraordinary. Then the care and upkeep is even worse.

4. Universities now also have massive explosions in Administrative staff. These are usually Government mandated positions that serve some obscure and quite limited purpose, and do not produce any academic value.

So is the argument above with merit. Doubtful. Yet it does justify the exorbitant salaries paid to Faculties, possibly a bit self serving.