January 29, 2014

College is too expensive, professor says

By Tian Chan–

Robert Martin, economics professor at Centre College, sympathizes with college students. He has unraveled countless arguments for why college is too expensive, and the dangers that poses.

He told the Cardinal that in the battle of shrinking incomes and rising costs, something has to give.

“It’s inevitable that this is going to change because the real cost for college has gotten so out of hand, the society cannot handle it anymore,” Martin said.  “The state government is completely maxed out on expenses; the money just isn’t there anymore — so people are going to continue to ask what it is that they’re actually getting for the money they are spending.”

The University of Louisville chapter of Mortar Board National Senior Honorary is hosting Martin on Jan. 29 at 7 pm, but the Cardinal got his thoughts before the speech.

Martin explained there are two separate costs: what it costs households, and what it costs the general public. If you look at these, you will see that for the past three decades or more, the increase in the total cost per student has risen more rapidly than any other sector in the economy.  Your college bill is an outlier, if you will, in terms of the real costs increases.

You can also measure college affordability between rate of change of college fees and rate of change between family households. For an increasing number of households, the cost of attendance has risen faster than the total amount of household income. This, as one could imagine, places a great burden on families.

International comparisons show the cost per student in the United States is roughly double the rest of the world. Martin said American students are spending way too much money.

Martin explains colleges argue they are using the money to invest in higher quality. But he said the primary mission of universities is instruction and research, which is part of the reason they have tax-exempt status and were organized in the first place. These additional fees are not going toward the quality of instruction, which exposes the validity in this argument.

Colleges sell students a bundle, similar to the bundle you buy from a cable company.  These bundles include food, housing, travel fees, recreational services and entertainment in addition to instruction.  He said colleges attach these costs that really don’t help a students education, and force them to pay for luxuries that most students living on a budget do not want.

On the federal level, less money for scholarships is being given to colleges, because some of the money is going toward these extra services.

Also, students now have to borrow money and end up leaving college in immense amounts of debt. If debt isn’t bad enough on its own, knowing that not all the money students borrowed went toward their education, but instead toward consumption goods – makes the concept much worse.

The large amount of student debt makes it more difficult for young students to get married, and buy a house and start a family, which is one of the primary drivers of the economy.

“Basically, the institutions that are going to do well are the ones that are planning for it now. If they keep waiting and denying there’s a problem, the outcome is going to be very dramatic,” he said.


Photo by Sasha Perez/Louisville Cardinal 

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