How to Solve the College Cost Crisis

There has been an awful lot of criticism of the high cost of college these days. And there’s no question that the cost of college has increased rapidly: the US Department of Education (USDOE) points out that the net price of college attendance went up 4.8 percent from 2008 – 2010, and CNN Money reported a host of distressing figures from across the country in October 2011. As a result, many colleges and universities have been raked over the coals about how much money they spend and their budgets have been subject to minute examination. I often get the feeling that the public equates universities with sailors on shore leave, spending money wildly in a desperate panic to use it all up before their time is up.

But The Huffington Post offers a new summary of the most recent National Center for Education Statistics breakdown of how public colleges spend money, and it makes a strong case for the argument that colleges and universities are actually spending money according to what most people consider the appropriate priorities:

1. Instruction-related costs total 26.7% of the average 4-year higher education institution budget, by far the largest concentration of funds. At 2-year colleges, the percentage is even higher at 39.5%. If we add to this the 7.3% of the average budget allocation that is used for academic support services, we find that just over on third of a college’s budget is spend directly on instructional needs.
2. Institutional and student support services, and to manage the operations of the institution so that the instruction can actually take place, requires significant funds. But the report shows that colleges and universities do not actually spend an enormous amount of money on this. Universities only spend 18% on the costs of institutional support (secretarial and registration services, for example), plant operation and maintenance, and what is called “other expenses and deductions,” which can include travel costs and fees for important guest scholars, conference attendance to learn new information, and many other things that also related directly to academics, the total is about 18%.
3. Despite the concerns of many that universities spend too much on research, the actual average percentage of university budgets used to support research is only 12.1%. Also, as students participate in such research to further their learning, we can easily include this into the instructional costs.
4. Public service accounts for another significant percentage of college budgets. University hospital services to their communities total 11.8 % on average, and public service costs nearly 5%. All of this is channeled directly into services that benefit the larger communities around higher education institutions and provide students with valuable service learning opportunities.
5. The communities that surround colleges and universities also benefit economically from the way these institutions spend money. According to the report, schools spend 8.8% on “auxiliary services” for students: the dining hall chefs, dormitory custodians, campus police, etc. create healthy and safe environments for students and provide necessary labor opportunities for many community members.

A New Interpretation

These figures lead me to conclude that colleges and universities seem to be providing exactly the services they should provide, in the appropriate priority. Instead of taking higher education institutions to task for profligate spending, then, why don’t we back off the criticism of colleges and universities themselves and look at the rise in college costs from a different angle: how we as a society have ordered our priorities.

College costs money because education is not cheap- nor should it be. High-quality instruction from the top experts in their fields, cutting edge educational technology,  and the building of liveable and productive college communities costs money. As much as I would love to see college education become free for everyone, the economic reality is that the money to operate colleges has to come from somewhere. The problem is that the money is not coming from the same sources it used to come from, because national priorities have shifted- and that’s why college costs have increased for students themselves.

For example, there have been major cuts in education funding for the past few decades, and they reflect our national priorities:

• Though President George W. Bush was the politician who first signed into law the temporary cuts on subsidized student loans interest rates that were just renewed, his record in other areas is less supportive of education: In his 2005-2006 budget, education funding was cut by $2 billion. He proposed a further $4.3 billion education cut in his 2006-2007 budget, which the National Education Association called “the largest cut to federal education funding in the 27-year history of the Education Department.” By contrast, defense spending was increased by 107%.
• The Grapevine Study conducted by the Illinois State University Center for the Study of Higher Education and the State Higher Education Executive Officers, found that in the 2011-2012 fiscal year, state higher education budgets suffered the largest decline in 50 years, with cuts topping 7.6%. It is no coincidence that New Hampshire, the state that cut higher education the most at 41%, now has the most expensive public university in the nation.

This means that the majority of the financial burden of higher education is now no longer spread among all taxpayers, who previously believed that an investment in higher education was an investment in the general welfare of our nation. Instead, the burden now falls upon each individual student. This doesn’t look like it will end soon: According to the Committee for Education Funding, the federal education allocation is about to be slashed further $4.1 billion at the start of 2013.

To me, this information indicates that we’ve been wasting a lot of time blaming colleges and universities for the rise in the cost of college, when they are the institutions that suffer the most from economic decisions that are based on the shifting priorities of our society. We might be better off if we used all this energy and outrage to begin a sustained examination and reconsideration of those priorities instead. Taxpayers need to reconsider what they want their country to be, and make financial decisions based on real and substantive necessities, such as education. Once we again consider education funding an important national priority, and make budgetary and legislative decisions based on that valuation, the college cost crisis will recede into the past– where it belongs.

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