Date: Wed, 18 May 2005 09:49:42 CST
From: beliavsky@aol.com
Newsgroups: misc.invest.financial-plan
Subject: Why U.S. college prices rise so fast
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The cost of college, like that of housing and health care, always seems
to be rising faster than the overall level of prices (as measured by
the C.P.I.). I think some reasons for this are that colleges are
largely insulated from foreign competition and that much of their costs
are covered by third parties, such as the government.

A story in today's Wall Street Journal shows how some of the money is
being spent:

Colleges Get Building Fever:
When Big-Ticket Amenities
Are Added to Campus Unions
Students Often Foot the Bill
By JUNE KRONHOLZ
Staff Reporter of THE WALL STREET JOURNAL
May 18, 2005; Page B1

 ...

"Why is the price of college going up? There are a lot reasons,
including declines in state budget support, the ballooning of college
bureaucracies and the competition for superstar professors. But also
high on the list is what Richard Vedder, an Ohio University economics
professor, calls the "country clubization" of universities, as
competition for students heats up."

 ...

"These aren't the linoleum-tile student centers of a generation ago.
The new, $75 million student union at the University of Massachusetts
Boston features a curved-glass façade overlooking Boston Harbor. The
$72 million Rams Head Center at the University of North Carolina at
Chapel Hill has a sports bar with 40 videogames, including a helicopter
simulator. The $60 million, 440,000-square-foot University of Arizona
center, in Tucson, takes its architectural inspiration from the USS
Arizona, the battleship sunk at Pearl Harbor."

Colleges should be ACADEMIC INSTITUTIONS, not playgrounds or adjuncts
of sports teams. I think luxuries for students distract students from
their work and encourage them to linger in college longer than they
should. I've read that many if not most students take five or more
years to graduate, with large direct (college room and board) and even
larger indirect costs (delayed entry into the workforce). Parents
should think carefully about why one college pays more than another
before opening their checkbooks. I will be willing to pay for academic
excellence and rigor, not frills.

In general, I think too many youngsters, especially in upper-middle and
upper class families, regard college as the "13th grade", something
they automatically progress to after finishing high school. It is
possible to fund various college savings plans as soon as a child is
born, and I am concerned about the message this sends. I will be happy
to spend money on my childrens' education, but only if they take full
advantage of their opportunities.

Economist Richard Vedder's insightful testimony before Congress is
cited in the WSJ story, and it is online at
http://edworkforce.house.gov/hearings/109th/fc/collegeaccess041905/vedder.htm
 .