Let's do what robocat said and find a comparison with health care and school systems.
One big driver to health care costs is artificial price inflation through insurance negotiations. Where insurance brokers need to get a deal but hospitals can't give a better one, so they raise the price and give a bigger discount on that. You know, the same thing that happens on Prime day.
Schools do this too, in many different forms. Let's look at graduate student pay, for instance. A lot of graduate students don't actually pay because they're doing a lot of work for the school and bringing in a lot of money. But if you go look at the pricing of credits you'll find that it is common for graduate credits to be more expensive than undergraduate. Is this because graduate students cost more? No, they definitely cost a lot less. So why is this number high? Because it is used to validate any pay from outside the university for those graduate workers, where the school takes a large chunk of that not just for admin fees, but to cover "the student's academic costs." This too is an artificial "book keeping" number and why we should not be counting this as income (yes, some states want to do that). It also creates for weird situations when a student needs to pay for credits themselves.
Or how about business class on airplanes? Few people are paying that actual rate.
Also, I think you cherry picked form your source. They also say:
> Over the 30 years between 1992-93 and 2022-23, average
published tuition and fees increased from $2,340 to $3,860
at public two-year, from $4,870 to $10,940 at public four-year,
and from $21,860 to $39,400 at private nonprofit four-year
institutions, after adjusting for inflation.
I should also mention that the $2,500/yr claim you're making (drawing from their numbers, but your interpretation) is a clear example of an Aggregation Paradox (see Simpson's and Berkson's). If we took this number at face value the $1.63 trillion debt level wouldn't make sense. Room and board isn't that much, even if many colleges require Freshmen to stay in dorms and buy a meal plan. Given that number, clearly there's a large variance to those numbers. There's always an advantage to reporting the mean, and if we have the mean and average we know these are within one standard deviation of one another. It is interesting to see that college board is reporting averages but when they talk about incomes they are using medians (which are reported from the fed).
Averages, alone, are often a terrible metric and you need significantly more information that that to make any reasonable conclusion from data. Relying on averages alone will make you come to poor conclusions. Reports like these are for bureaucrats, not people trying to understand or solve problems.
Room and Board is a significant factor. See figure CP-9. Through the entire period, RB exceeds $10k/yr, as compared to ~$3k/yr for tuition. That's 3x the cost!
I would not say that I cherry-picked from my source; the argument expressly is that *published* tuition numbers are meaningless, because few students pay them. The correct number to use is tuition net of Grant Aid, which is also listed in figure CP-9, and hits my $2,500/yr. The $1.63 trillion debt level does make sense when most students do use loan money to pay their room and board, and do so for 4 or more years.
Obviously, some families do save money to cover college costs, so most students aren't taking out 20k+ worth of loans each here, but the driver is not the expenses of the colleges. Indeed, if you look at Figures SA-1 and CP-11A, you can see that when college affordability became newsworthy, as loan amounts went up by over 75% is exactly when states were slashing support for students, during the Great Recession, between 2006-2010. Since then, states have been restoring funding, and loans are down. Many state college tuition rates have been flat or flat in real dollars for the last decade. As an example, the UC system had completely flat tuition rates for 4 straight years, and now guarantees each student that they will not be subject to tuition increases during their undergraduate education, and will pay a flat rate.
One big driver to health care costs is artificial price inflation through insurance negotiations. Where insurance brokers need to get a deal but hospitals can't give a better one, so they raise the price and give a bigger discount on that. You know, the same thing that happens on Prime day.
Schools do this too, in many different forms. Let's look at graduate student pay, for instance. A lot of graduate students don't actually pay because they're doing a lot of work for the school and bringing in a lot of money. But if you go look at the pricing of credits you'll find that it is common for graduate credits to be more expensive than undergraduate. Is this because graduate students cost more? No, they definitely cost a lot less. So why is this number high? Because it is used to validate any pay from outside the university for those graduate workers, where the school takes a large chunk of that not just for admin fees, but to cover "the student's academic costs." This too is an artificial "book keeping" number and why we should not be counting this as income (yes, some states want to do that). It also creates for weird situations when a student needs to pay for credits themselves.
Or how about business class on airplanes? Few people are paying that actual rate.
Also, I think you cherry picked form your source. They also say:
> Over the 30 years between 1992-93 and 2022-23, average published tuition and fees increased from $2,340 to $3,860 at public two-year, from $4,870 to $10,940 at public four-year, and from $21,860 to $39,400 at private nonprofit four-year institutions, after adjusting for inflation.
I should also mention that the $2,500/yr claim you're making (drawing from their numbers, but your interpretation) is a clear example of an Aggregation Paradox (see Simpson's and Berkson's). If we took this number at face value the $1.63 trillion debt level wouldn't make sense. Room and board isn't that much, even if many colleges require Freshmen to stay in dorms and buy a meal plan. Given that number, clearly there's a large variance to those numbers. There's always an advantage to reporting the mean, and if we have the mean and average we know these are within one standard deviation of one another. It is interesting to see that college board is reporting averages but when they talk about incomes they are using medians (which are reported from the fed).
Averages, alone, are often a terrible metric and you need significantly more information that that to make any reasonable conclusion from data. Relying on averages alone will make you come to poor conclusions. Reports like these are for bureaucrats, not people trying to understand or solve problems.
https://research.collegeboard.org/media/pdf/trends-in-colleg...