2004-05 college tuition: Movin' on up CNN/Money finds hikes between 4.5% and 11%, and looks at why tuition outpaces inflation.
CNN Money
May 19, 2004
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This coming September, the cost of attending college will rise, as it has since the 1980s, faster than the rate of inflation. Why is that the case?
There may be many reasons for this, but here are a few explanations:
Decreasing state support: In many states across the U.S., support for state institutions is decreasing in the face of significant state budget shortfalls. In California, for example, tuitions at state colleges and universities have risen steadily each year over the last ten years, far outpacing inflation. This has made an increasing number of students opt for more affordable community colleges.
High cost of labor: Education is a labor-intensive industry. Since colleges and universities, especially more prestigious ones, want to maintain low student-to-teacher ratios, they pay a premium for their workforce. This is made worse by the fact that healthcare costs have been rising dramatically over the past 20 years, making it all the more expensive for schools to provide the benefits that a highly educated workforce commands.
Student aid: One of the fastest growing components of a university's budget is student aid. That's because a larger proportion of families, compared to, say, 20 years ago, now require student aid to attend college. Furthermore, more students now than in the past are from low-income families, and they require more financial aid.
The average amount of tuition actually paid in cash has decreased. This can be attributed to a higher proportion of lower-income students, and also because tuition costs have out-paced most family incomes, in recent years, Baum said.As a result, "one of the most rapidly growing components of the budget is student aid," she said.
And one of the ways to fund greater aid payouts besides tapping into alumni contributions and school endowments is to raise tuition.
