Is College Tuition Too Low?

I admit it: At times I like provocative headlines to shake things up a bit. But I think this one is worth thinking about.

Recently, on my other blog, Higher Ed Data Stories, I published a re-formatted Tableau visualization from the Chronicle of Higher Education. You can look at it here. The takeaway is that a) about 80% of college students in America go to public institutions, and b) about three-quarters of those that do pay less than $12,000 per year to do so.  So, for now, my headline applies mostly to public higher education.  (As you can see, in order to be able to afford the cost of the typical private, four-year college and university, you need to be somewhere in the top 5% of all family incomes in America. I don’t think anyone thinks private college costs are too low.) Thanks to Royall and Company, from whom I shamelessly copied this graphic.

But the fact that they pay anything at all is interesting.  By charging tuition to state residents, we are effectively saying that college education is not an entitlement.  If it were, it should be free to those who qualify and who wish to pursue a bachelor’s degree.

As a result, the low tuition allowed by state subsidies for this non-entitlement means that everyone gets a break, even if they don’t need it.  In other words, if a child of Bill and Melinda Gates decides to go to the University of Washington, people who are worth far less than they are (in other words, everyone else in Washington) end up subsidizing the education of their children.  Bill and Melinda seem like nice people, and I’m sure they’ve raised very nice children; this is nothing personal.  But it seems a bit unfair, don’t you think?

When a public university keeps its in-state tuition artificially low (measured against the fully loaded cost of instruction) so that even the wealthiest citizens of the state get a subsidy, guess what happens? Wealthy people tend to take advantage of it. And this squeezes out kids with fewer options, mostly those further down the economic food chain.

Every state I know of that has done a study (like this one from Minnesota, in 2008; chart on p.9) has found that median family incomes at state-supported institutions are higher than at the state’s private colleges and universities.  This was true even before the huge economic shakeout; with the push to enroll more out-of-state students (read: generate more revenue) happening at most flagships, state residents are likely to get squeezed via greater selectivity.  And, as I’ve ranted about before, greater selectivity and the race for prestige puts more pressure on low-income kids, because the things more selective colleges favor (test scores and the money to get coached, access to AP classes, well-crafted essays that have been professionally scrubbed, and activities you can only do if you don’t have to work to help with family expenses) skew wealthy.

The fix is not easy: First, a real tool to measure a family’s ability to pay for college.  Second, state and federal programs to fill the gaps.  Then, and only then, should state universities raise their tuition dramatically, to cover the full cost of instruction, so that those that deserve it can get it, and those that can afford it pay for it.  Sorry Bill. Sorry Melinda.

2 thoughts on “Is College Tuition Too Low?

  1. I am pretty sure the Gates pay plenty of taxes in Washington state. Therefore their children deserve the in-state tuition rate same as ALL other residents. Robin Hood is a fairy tale.


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