The California State Board of Trustees recently voted to increase tuition by about 5 percent at each California State University. This move comes just a few months after University of California regents voted to increase tuition by 2.5 percent for the 10 schools in the UC system.
The skyrocketing costs of attending college are nothing new, and neither is the frustration from students affected by these changes. Student loan debt is at record highs and continues to leave the average college student $30,000 in debt. It is important to note that this amount is per borrower, not per graduate. According to the Education Sector, about 30 percent of college students who took out loans ended up dropping out. These students left college without a degree, but their debt will certainly not be leaving them.
While tuition has increased dramatically over the past decade, the income of middle class families has not. Middle class families have actually seen a 2 percent reduction in median income during this time span.
Moreover, the cost of textbooks and college tuition over the past 20 years has risen significantly higher than all other consumer goods and services, an increase nearly four times the rate of inflation.
Many people are perplexed by this staggering rise in education costs, especially given the fact that personal goods, such as televisions, have seen decreasing prices for higher quality products.
In 1999, for example, a 20-inch flat screen TV costed about $1200. That same-sized TV can now be purchased for a mere $84 today. The same holds true for computers, cellphones, and a plethora of other goods that were once only affordable for the rich, but have become ubiquitous today.
The explanation for this is really quite simple. These goods are controlled by the free market, which gives incentive to producers to create the best quality products for the lowest prices. The success of a business depends on its ability to provide goods and services that consumers are willing to voluntarily purchase.
As Prager University explains, this is in stark contrast to the current university system. The government provides students with loans and financial aid, which seems benevolent on the surface. However, the unintended consequences are felt most by the exact people for which these policies are supposed to benefit – the students. Students are encouraged to attend college with the promise of financial help, but this increased demand at artificially low prices creates a problem. The student may not initially be paying as much, but the university is still receiving the tuition cost from the government. This guaranteed income to the university allows for tuition hikes, resulting in more loans and financial aid, which in turn provides the university with even more free money from the government.
The cause of the surging college tuition costs across the country can be traced back to government subsidization. The taxpayers are left with the initial burden of paying for the financial assistance, and eventually, the students suffer the dire consequences several times over. First, when it comes to racking up their student loan debt. Next, paying that debt off. And finally, when they become taxpayers themselves, they are forced to subsidize the next generation of college students. It truly is an incessant cycle.