Comment Re:Forget ratings, measure ROI. (Score 1) 302
Why are the costs going up? The main reason is that the cost of living is going up, while the states keep cutting the portion of the tuition that they pay so that they can spend that money on other programs. Most universities are getting smaller and smaller portions of their operating budget from the state, which inevitably means that they have to charge higher and higher tuition to make up the difference. There's no market magic involved here. There's no supply and demand at work. The demand is fixed; everyone wants an education. The supply is also fixed; every school can handle only a certain number of people. There's no profit margin—most schools are purely nonprofit and cannot make money except as temporary savings towards future costs—therefore, the cost is purely driven by the cost of operation. Any statements to the contrary, at least as far as public universities are concerned, are just plain wrong.
The "sticker price" of universities are going up much faster than the "net price." For example, look at the average net price for private institutions over time.
From 1992-93 to 2012-13, the sticker price of tuition and fees has gone from $17,040 to $29,060 while the net price has gone from $10,010 to $13,380. The net price is a much more reasonable increase both in terms of percentage and total change in cost.
This pricing model has allowed for the universities to segment their market effectively and have people of different income levels pay what the universities feel is proper. So while it seems that universities have been getting MUCH more expensive, in reality, the pricing increases have been modest.
For more pricing trends for universities, try this link.
