People who teach or practice criminal law often laugh when they reporters describe a defendant as "facing 25 years" for what is plainly a modest offense. It is the usual tradition in journalism, when covering a criminal matter, to report a defendant's maximum legal statutory exposure. Far less often, reporters note the sentence that experts believe a defendant actually faces.
I wonder whether a similar phenomenon is happening in coverage of rising tuition costs. As I noted in my recent post on the AAUP's study on faculty salary, stated tuition has been rising steeply in recent years. But what is less clear is whether the average tuition paid has undergone a similar increase. There are several reasons why schools might hike their nominal tuition, while spending a significant portion of that new revenue on financial aid.
One, schools might have a taste for economic redistribution. It's easy to imagine that a school might seek to recover a greater portion of the actual cost of education from affluent students, while distributing some of that increase to needy students.
A second reason might be a taste for merit-based distribution. Taking no position on what schools consider merit - and it's not clear to me that GPA and SAT (or LSAT) scores are a great definition - one could imagine that schools want to use weaker students to fund the recruitment of stronger students. Indeed, my impression is that this is a dominant approach these days. While it might appear that this behavior only benefits strong students, and the institution itself (in the form of US News rankings improvement, for example), it is true that lifting up the quality (and perhaps reputation) of a school benefits the full-freight students as well. On the other hand, there is the problematic possibility that to the degree that poorer students (coming from weaker schools) aren't as meritorious - along the SAT/GPA metric - we are effectively redistributing from the poor to the affluent. Schools can address this by building out scholarship strategies that incorporate multiple factors that do not focus exclusively on metrics closely associated with affluence.
A third reason might be that schools want to be seen as expensive because prospective students use price point as a proxy for quality. I don't sense any market presumption that the cheapest private school is the best; to the contrary, we assume that elite schools are expensive. You can be expensive and non-elite, but it's almost impossible (with the exception of a tiny number of outliers) to think of an elite private college that is not expensive.
There are surely other reasons to raise nominal tuition. I haven't seen actual tuition revenue data but I'm guessing that it has increased markedly at public institutions. I'm less certain about private schools. If tuition has indeed spiked among these schools, it's worth pondering why that happens. Faculty salary is one possible culprit, but the AAUP study certainly casts that into doubt. Increased emphasis on research - even among schools that never focused resources this way - might flesh out the story a bit.
But for now, I'll remain skeptical about how much tuition has actually increased (among private schools at least). There is real empirical work to be done here. The media and the public will continue to call out universities for price hikes and I'll continue to wonder whether this is another case of statutory maximum sentences.
You raise a number of important issues here. I wonder if schools should be required to publish some sort of average actual tuition being paid so that a prospective student would know at what point he or she was subsidizing the education of other students.
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