Surpise, Surprise: Tution Skyrockets Again

21 06 2011

Last year, the University of Michigan trumpeted what they called “the lowest resident undergraduate tuition increase since 1984.” The announcement came as something of a breath of fresh air as families struggled to regain their financial footing in the wake of the Great Recession; more importantly, it was a great public relations move.

For decades, American college students have struggled financially as the rate of tuition increases has far outstripped inflation, income growth, and even the price of housing before the real estate bubble burst. That the bean counters at U-M had managed to keep last year’s tuition increases to only 1.5% was a remarkable–indeed, almost heroic feat of accounting.

It must have been a fluke.

This past Friday, U-M announced that rates for the upcoming school year would skyrocket by 6.7%. Other public universities have quietly done the same, increasing rates by around 7%. Contrast U-M’s grim, Snyder made us do it air surrounding this year’s rate increase with the PR frenzy that accompanied last year’s prideful announcement.

True, Gov. Snyder has cut the funding for state universities by 15%. But this recent reduction in state appropriations is just a continuation of a decades-long trend; U-M, for example, only received 20% of its general fund revenues from the State of Michigan during fiscal year 2011, compared with a shocking 80% in the 1960’s. These cuts have not come overnight. Universities have had generations to adjust their revenue-expenditure models, yet comforted by an explosion of other forms of subsidy (that’s ultimately what student loans, whether public or private, represent), these institutions have kept their heads firmly in the sand.

The duplicity of university administrators, who insist that rates simply must rise while spending billions of dollars on campus improvements, is beautifully illustrated by U-M’s endless building spree. Take, for example, U-M’s new North Quadrangle Residential and Academic Complex, completed at a cost of $175 million. A lovely building, to be sure, was it the best use hundreds of millions of dollars? And North Quad is one of dozens of similarly extravagant building projects U-M has undertaken over the past decade. There’s no reason to advocate a campus-wide plan of forced austerity, but surely universities could to strike a balance between bleak, East German-style accommodations and the glittering Dubai-like constructions they have become so fond of.

Change will come only once parents, students, and the market itself begin to hold universities accountable. It has become increasingly popular to talk about the existence of a so-called “tuition bubble” fueled by the perceived value of a college degree. It won’t take many more years of 6.7% tuition rate increases before the increased earnings potential provided by a degree is eclipsed by the debt burden students must take on to get that degree in the first place.

If and when the bubble bursts, university administrators will have no one to blame but themselves–but at least they will be able to hang their heads and mope in their new, cutting edge, billion-dollar university buildings on the beautifully manicured (but empty) campuses  across the state and nation.




2 responses

17 09 2011
The Munificent Mary Sue « Graham Kozak’s Blog

[…] $7,023/pop) or less than one semester of out-of-state tuition ($20,121). After a few more years of wild fee increases, students will be lucky if that amount represents the cost of a few credit […]

18 09 2011
The Munificent Mary Sue

[…] $7,023/pop) or less than one semester of out-of-state tuition ($20,121). After a few more years of wild fee increases, students will be lucky if that amount represents the cost of a few credit […]

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