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Why College Costs So Much

One of the questions I get asked all the time is “why is college so expensive?” It is a question that has exploded now beyond the confines of academia into the realm of policy debate and popular media. It is a good question, and one that eludes simple explanation.

When my father set out for the University of Vermont in 1955, he drove to Burlington with a small carload of books and clothes, along with a full semester’s tuition bill of $750. He’d worked as a busboy the summer before, earning nearly enough—$1,400, plus a modest Catskills room and board—to cover two semesters’ worth of tuition. He ate at a diner near campus, or in the kitchen of a local woman who served Friday-night chicken to hungry undergraduates for 25 cents a meal. He worked every summer at the same upstate resort, and graduated without a cent of debt.

By the time I left for college, in 1980, tuition rates had risen precipitously. Annual fees at Georgetown were roughly $10,000, or about seven times greater than those my father had encountered a generation earlier. I was lucky, though. Having paid their way through college, my parents were determined to set aside funds for my brother’s and my education. So from our births, they carefully saved around $2,200 a year in each of our names, enough so that we, too, could graduate debt free. It wasn’t easy for my parents, but it was manageable.

Today, it is only the very wealthiest families that can afford to follow my parents’ path. At Barnard, the annual cost of attendance is $55,000, a staggeringly high figure that is shared or even exceeded by most of our peers. To fully cover the bill for four years, a family would need to save about $12,000 a year from the time their child was born, or nearly 20 percent of the median annual family income in 2011. This is a tough amount to sustain, even for families who fall solidly into the middle class. By contrast, my grandparents would have had to save $333 a year to cover my father’s college costs, or only seven percent of median family income in 1955. Is higher education too expensive today? Yes.
So why has this happened? Part is just the inexorable force of inflation. If we use the consumer price index as the normal rate of inflation, then my father’s $1,500 tuition in 1955 would naturally have increased to $12,074 in today’s dollars, or slightly less than a quarter of the actual price. It is easy to blame the additional 75 percent on the newer luxuries of college living—the climbing walls and plush dormitories—or on the catch-all category of administrative bloat. Yet, as our students would readily attest, we don’t have climbing walls or plush dormitories at Barnard. And administrative salaries account for only 13 percent of our total budget. What has instead driven the rise, on our campus and elsewhere, are two crucial but little discussed trends: expanded access and extended student services.
In 1955, few American colleges offered financial aid, and access was restricted, as a result, to those who could pay—typically, white, Anglo-Saxon, relatively wealthy families. Today, by contrast, higher education is firmly and proudly committed to opening its doors to capable students from all family backgrounds and socioeconomic statuses. This is a very good thing, in my opinion, probably the most critical development in higher education of the last century. But it is expensive. At Barnard, as at most of our peer schools, nearly half the student body receives some form of financial aid. The cost of this achievement is $34 million a year, or nearly 25 percent of our total budget. Is this a cost worth paying? Absolutely. But it is a very real cost, and one that cannot be contained without limiting access.
Meanwhile, in the 50 years since my parents graduated, colleges like Barnard have vastly expanded the kind of services we provide. In 1955, Barnard offered 28 majors; today we offer 51. In 1955, our health services revolved around social hygiene and TB tests; today we have nutritionists and substance-abuse counselors, learning- disability specialists, and psychiatrists. We have career counselors and college- activity directors; a public-safety staff of 120, and a dining service that is kosher and halal, nut-free, gluten-free, and vegetarian. None of these services relates directly to what our students learn in Russian literature or organic chemistry, but they have been built into the fabric of college life over the past 50 years, enriching the ways in which our students learn and influencing the kind of women they become. And they, too, are extremely costly: In 2011, counseling services alone cost the College nearly one million dollars.
In the coming decades, American higher education is likely to face a cascade of overlapping challenges, with financial pressures morphing rapidly into political ones. We will be attacked as too expensive, too indulgent, too elitist. And we will increasingly have to explain, not just what we do, but why it costs so much. The bottom line is that education—like health care— is expensive, and does not benefit from the economies of scale or mechanization that prevail in other sectors. We can’t eliminate the classics department because we’ve added environmental studies. We can’t replace academic deans with online FAQs. And we can’t double or triple the number of students in a class without undermining the kind of education that each one receives. As a sector, to be sure, we will need to respond. We will need to chip away at our costs wherever we can, and experiment with different modes of delivering content. But we will never go back to my parents’ day, when a hard-working kid with a decent summer job could pay her way through college.