College Cost Break Down: Why College is So Expensive? Part Two (Page 3)

Tenure: The practice of just-in-time manufacturing doesn’t have a counterpart in a tenure-based academic institution. In a flexible manufacturing plant, when demand of one product goes down, it can increase output of other products using the same tools and materials. This just is not the case with education. A chemistry professor is not directly interchangeable with a professor of philosophy. However, over time, when popularity of certain majors (like nursing) increases, tenure protects job security of professors in less popular areas. In turn, increased demand for certain types of college courses places increased pressure on a college to either hire more faculty, thereby increasing expenses (in many cases colleges hire adjunct professors as a way to lessen the burden of faculty costs), or an inability to meet the demands of its student population appropriately. This is also why it can be so difficult to get into the classes required for your major – there isn’t enough faculty to teach a sufficient number of courses to service the student population properly.

2 - Infrastructure (Buildings, Parking Structures, Computing Centers, etc.) and Variable Costs Associated with Infrastructure⁶

With infrastructure comes long-term maintenance costs and the day-to-day requirements that help to keep a piece of real estate functional. As such, the operational costs of a college can fluctuate with rising rates of utilities (electricity, heat, communications, water, waste, etc.) Additionally, much of the infrastructure at public institutions is comprised of older, inefficient buildings which compounds the impact of this expense. And infrastructure costs get paid for by... tuition.

3 - Regulation⁷

Degree-granting colleges and universities are required to meet federal and state mandates regarding administration of financial aid as well as a wide variety of reporting requirements. It can take a sizable administrative staff to service all of these reporting and regulatory needs. Beyond education, many college campuses are also home to healthcare clinics, daycare centers, sporting arenas, housing centers (dorms) and food services (dining halls). These too are subject to regulation and have their own reporting requirements. It all adds up, and it can add up big.

4 - Program Costs⁸

From a pure demand perspective, not all programs at a college or university are equal. Tuition and fees collected from students in low-cost programs, in effect, subsidize students participating in higher cost programs. For example, students enrolled in engineering (high demand, high cost program) generally pay the same tuition and fees as students enrolled in low cost programs. Likewise, first year students taking introductory, large-lecture courses often taught by non-tenured or adjunct professors (which are significantly less expensive to teach) pay the same amount as seniors taking advanced level, small-class size courses taught by tenured professors (higher cost).

Additionally, college athletic programs and other student interest groups are subsidized by the entire student population at a college or university – whether or not there is a proportional usage by that student body. In general, nearly all college athletic programs are an overall expense to a college or university. Money earned as a result of purchased tickets rarely repays the total expense of a college athletic program.

Finally, new programs have a way of constantly sprouting up in a college setting in order to meet the needs, trends, and demands of a changing student population. New programs cost money. New programs, however, aren’t usually accompanied by a corresponding reduction in existing programs. In other words, there can be lots of on-going scope creep at a college or university – and scope creep is expensive.

⁶Dickeson, Robert, The Secretary of Education’s Commission on the Future of Higher Education, Issue Paper, Frequently Asked Questions About College Costs, p.2
http://www2.ed.gov/about/bdscomm/list/hiedfuture/reports/dickeson2.pdf

⁷Dickeson, Robert, The Secretary of Education’s Commission on the Future of Higher Education, Issue Paper, Frequently Asked Questions About College Costs, p.2
http://www2.ed.gov/about/bdscomm/list/hiedfuture/reports/dickeson2.pdf

⁸Dickeson, Robert, The Secretary of Education’s Commission on the Future of Higher Education, Issue Paper, Frequently Asked Questions About College Costs, p.3
http://www2.ed.gov/about/bdscomm/list/hiedfuture/reports/dickeson2.pdf