Counterparties: The lessons of tuition inflation
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Why have college costs risen 12 foldÂ in 30 years? In a terrific story today, John Hechinger points to â€śadministrative bloatâ€ť at public universities like Purdue, which has made a habit of doling out six-figure salaries to armies of administrators:
Purdue has a $313,000-a-year acting provost and six vice and associate vice provosts, including a $198,000 chief diversity officer. It employs 16 deans and 11 vice presidents, among them a $253,000 marketing officer and a $433,000 business school chief.
The rise in tuition could be exacting a toll on enrollments: Richard Vedder thinks that with tuition increasing at twice the rate of consumer prices, â€ścolleges may in some cases be pricing themselves out of the marketâ€ť. The gap between disposable income and college costs, Sober Look writes, â€śhas widened to historical highsâ€ť. For a data deep-dive, the College Board has a comprehensive study of the trends in tuition and student aid.
Megan McArdle argues that surging costs are as much a consequence as they are a cause of unprecedented levels of student debt, spurred on by government subsidies. But Mike Konczal flags a Department of Education study that shows that the government earns $1.14 back for every dollar it loans to students and asks, â€śWhatâ€™s a good word for the opposite of a subsidy? Whatever it is, student loans are thatâ€ť.
Whatever the cause of rising costs, getting a BA isnâ€™t necessarily a guarantee of high-paying work: the US now has â€śmore than 100,000 janitors with college degrees and 16,000 degree-holding parking lot attendantsâ€ť. If you look for it, thereâ€™s plenty of bad news about post-collegiate life. The employment prospects of new grads are dim and their wages arenâ€™t likely to pop back after a recession as quickly as their non-college educated peers.
Michael Greenstone and Adam Looney of the Brookings Institute think college is still worth it. The lifetime earnings bump that comes with a BA is at historic highs and the the return on investment from a college degrees is at least as good as it was in the 1980â€™s. â€śCollege is still one of the best investments an individual can make,â€ť they conclude. — Ben Walsh
And on to todayâ€™s links:
“Tax increases, especially for the wealthiest, are appropriate” (but only if we cut spending) – Lloyd Blankfein
Obama’s first “bid” in the fiscal cliff negotiations: More than double his 2011 offer – WSJ