According to Bird, in 1970 colleges
According to Bird, in 1970 colleges were spending more than thirty billion dollars annually to educate half of America’s high school graduates. Do research to ascertain the comparable figures today, or figures for as recent a time as they are available. Write an essay in which you consider how economists justify such an expenditure. Are there other economists who regard it as a bad investment?
Rising Rates of Education Expenses in America
Even before most of the contemporary colleges were developed, the rising costs of higher education were already quite shocking. Most Americans were questioning the reasons behind such exorbitant costs, and many theories were formulated. That is because the average person had to pay college fees for a single student, an amount that he himself had spent for the entire four years of his course a couple of years of back (Ripley, 2018). Some argued that decadence was the problem. That students never wanted to minimize costs, and that they wanted to live in fancy parameters and have expensive meals three or four times a day. Also, sporting was considered to be ab activity that consumes extra costs.
Reasons Behind High Tuition Fees in America
By 2018, the U.S. college rates were twice as much as the amount spent for the same education in other developed countries (Ripley, 2018). This is an alarming amount since it raises questions on whether such costs are indeed relevant. When taking into account the contributions made for education costs from both families and the government, America records approximately $30,000 per student per year (Ripley, 2018). The government contributes in terms of student loans and grants. It is evident that this amount places the U.S. on a class much higher than the rest of the world (OECD, 2018). The spending per student is extremely high. It is unfortunate that the value that one receives in return is not even equated to such spending.
Economists need to determine why college tuition costs so much, and whether it is worth it. In 19th century, various features were being blamed. They included indulgences of students during their campus life, the fancy sleeping parameters, expensive dining areas and many others (OECD, 2018). Although these aspects do contribute to the high costs, the percentage is very low. Ancillary services are estimated to cost only $ 3,370 on average per student (Ripley, 2018). It is almost three times the amount spent on the same activities for other countries. A major reason for this is that most American students live away from home. Hence, they have to rent out apartments and purchase meals. Thus, as compared to other countries, the U.S. features more dormitories and dining halls that many other neighbouring countries. Therefore, these can be considered as essential facilities which makes students feel comfortable even though they are far away from home.
The analysis of remaining amounts represents a deeper lying issue. Even if all ancillary services were reduced to zero amounts, the U.S would still be spending so much more per student than any other developed country. Most institutions carry out routine educational operations such as paying the staff and repairing the facilities. This cost accounts for almost $23,000 per student every year (Ripley, 2018). It is still an amount that is twice that which other countries spend. This shows that decadence is really not the cause of high education costs in America. Rather, the operational costs are the main culprits.
Since college is a form of service, it is evident that it cannot get cheaper with the newly developed technological solutions. In addition, the fact that employees are graduates who have degrees further worsens the scenario. Their pay rates cannot be reduced below the industry expectations for individuals who have attained such high levels (OECD, 2018). As a matter of fact, the salaries tend to increase with their years of experience. The low skilled individuals are not always competitive enough to offer such services, which is why colleges focus mostly on the ones with college degrees.
Therefore, just as the salaries for other professionals are rising, the salary for professors are also increasing. It will not make sense to prevent the salary increment for individuals of this profession simply because the education costs are high. Hence, it can be argued that the economic growth that the country is facing is the main reason as to why college education is increasingly becoming more expensive (Ripley, 2018). However, the same economic growth is also being experienced in other countries as the years go by. Thus, it would make more sense if all amounts were within the same range. This can be explained by the fact that the higher education system of America features a three in one kind of approach. It features a private, non-profit, and for-profit institutions (Ripley, 2018). The public system is the biggest since it features a two year community college option and the four year institutions. These schools are funded through the state, student loans, and even personal fees.
The American education cost is high mainly because of the economic growth that the country experiences, along with the complex nature of the education system. It means that a lot of funds are required for the systems to stay afloat while still catering for the salary increments being experienced for the relevant staff. Therefore, it will make more sense if the country considers an approach that will simplify the systems so that not so much amounts are required for public institutions.
Ripley, A. (2018). Why is College in America so Expensive? Retrieved from https://www.theatlantic.com/education/archive/2018/09/why-is-college-so-expensive-in-america/569884/
OECD. (2018). Education at a Glance 2018. OECD iLibrary. https://doi.org/10.1787/19991487