The official government statistics on college affordability—which show inflation-adjusted tuition and board costs increasing by more than 250 since 1980—are bad enough. But a detailed new study from the Century Foundation suggests that the real cost of attending college may be even higher than most public estimates suggest:
We find that many institutions underestimate the costs of living while in college, the ancillary costs of academic programs (books, supplies), and the expenses that students face related to health care and family emergencies. We describe how these costs arise and how students experience them, drawing on three studies that utilize administrative, survey, and qualitative data. Our data suggest that these are but some of the costs unaccounted for in institutions’ statistics—in this exploratory work, we have only scratched the surface.
The authors found, for example, that students are charged between $75 and several hundreds of dollars fees for placement exams, for borrowing laptops, and for lab materials over and above the the official estimates. Variation in on-campus housing costs (as well as additional, “hidden” fees, and extra services students were encouraged to buy) also meant that many students ended up paying more than they had budgeted for. Finally, many colleges offered financial aid packages that faded over the course of their education, so students end up paying more as seniors than they did as freshmen.
As tuition ticks upward at twice the rate of inflation, as student loan debt mounts with no end in sight, and as studies like these show that the real cost of college is even higher than we think, it’s increasingly hard to argue that our higher education system isn’t overdue for a shakeup. Three reforms are particularly pressing: First, as the Century Foundation authors suggest, the system needs more transparency. That means more accurate estimates of the amount students can expect to pay from spending four years of their lives (years they might otherwise spend working) earning a college degree, as well as easily accessible data about the amount of value a college degree can be expected to add to a graduate’s earning potential. Next, the federal government needs to scale back superfluous regulations and mandates that artificially increase tuition prices. Finally, and most importantly, our higher education accreditation system needs to be renovated to increase competition and make more room for leaner, alternative delivery models.
The fundamental reason for runaway costs in higher education is that the system is opaque, monopolistic, and heavily dependent of federal subsidies. A reform agenda focusing on transparency, accountability, and competition is the best bet for starting to bring costs under control.