Cost of tuition more than tripled between 1973 and 2013.

Discussion in 'General Distance Learning Discussions' started by rmm0484, Mar 17, 2014.

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  1. rmm0484

    rmm0484 Member

    "The College Board says the average tuition and fees at public four-year colleges and universities increased by 27 percent beyond the rate of inflation over the five years from the 2008-09 academic year to 2013-14. After adjusting for inflation, the cost of tuition more than tripled between 1973 and 2013."

    Paying For College: No Easy Answers For Many Families : NPR
     
  2. me again

    me again Well-Known Member

    The cost of EVERYTHING has more than tripled between 1973 and 2013.

    In 1973 a new BW bug cost $1500, but today it costs $20,295 (MSRP). Wages and homes are similarly higher. In 1973, an annual salary of 18k was a lot of money, but today it's not.
     
  3. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Yeah, but that was accounted for: "After adjusting for inflation, the cost of tuition more than tripled between 1973 and 2013." Tuition really has skyrocketed, and I think it's largely thanks to Title IV.

    Also, a 1973 VW Beetle and a 2013 VW New Beetle aren't even close to being the same product, so comparing their price isn't really fair. Something that hasn't changed much, like a Snickers bar or whatever, would be a better comparison.
     
  4. CalDog

    CalDog New Member

    As stated in the story, the cost of tuition has more than tripled after adjusting for inflation.

    For example, the US Government's inflation calculator estimates that $1 in 1973 has the same buying power as $5.25 in 2013.
    So if tuition costs followed inflation, they should be up by a factor of about 5.25 since 1973.

    The University of Pennsylvania (a private Ivy League school) keeps a database of historical tuition costs.
    In 1973, undergraduate tuition at Penn was $2,850.
    If we multiply by 5.25 to account for inflation, then Penn tuition should be $14,963 today.

    Is it ? No way. The actual tuition at Penn for 2012-13 was $39,068. That's 2.6 times the predicted number.
    So Penn tuition has risen 2.6 times faster than inflation over 1973-2013, which seems reasonably close to "tripled".

    Another way to look at it: the cost of everything went up by a factor of 5.25 from 1973 to 2013.
    But the cost of Penn tuition went up from $2,850 to $39,068, which is a factor of 13.7.
     
    Last edited by a moderator: Mar 17, 2014
  5. John Bear

    John Bear Senior Member

    So if the same rate of inflation happens over the next 40 years . . .

    The VW will be selling for $274,591
    And Penn State tuition will be $535,546.
     
  6. John Bear

    John Bear Senior Member

    PS: The Snickers bar was a dime in 1973. Now I believe it is $149.95 at the local Cinema 23.
     
  7. CalDog

    CalDog New Member

    Here is another example, this time for a public school.
    Resident tuition at University of Colorado:

    1972-73: $440
    Predicted 2012-13 tuition, based on inflation: $2,310
    Actual 2012-13 tuition: $8,056
    Ratio of actual to predicted tuition: 3.5

    So after accounting for inflation, tuition has "more than tripled" at this public four-year university, which is exactly what the news story claims:

    "the average tuition and fees at public four-year colleges and universities ... after adjusting for inflation ... more than tripled between 1973 and 2013."

    The nominal cost of everything rose by a factor of 5.25 between 1973 and 2013.
    But the nominal cost of University of Colorado resident tuition rose by a factor of 18.3 over the same time period.
     
    Last edited by a moderator: Mar 17, 2014
  8. me again

    me again Well-Known Member

    Measurements of inflation are rubbish and can be skewed to make a case for almost anything. In 1973, food and fuel were part of the consumer price index (CPI) for measuring inflation, but around the turn of the century, the government eliminated food and fuel from the CPI to lower the appearance of inflation. Thus, if the same CPI of 1973 were used up until today's date, the tuition increase would be less, in relation to aggregate inflation which includes food and fuel. Inflation for EVERYTHING is significantly higher when the original CPI is applied.

    If food (i.e. a Snickers bar) is incorporated into the aggregate CPI analysis, then overall inflation of EVERYTHING would be significantly higher. The current CPI is not an accurate measurement of the inflation that has occurred since 1973. The CPI is kept artificially low (on paper) to prevent people from panicking and questioning governmental fiscal and monetary policies. The raging interest rates and inflationary rates of the early 1980s are still with the U.S. economy, but they are being artificially masked from public view through manipulation of the CPI e.g. if food and fuel are reinserted into the CPI for every year of inflation-calculation, it would corroborate this statement.
     
    Last edited by a moderator: Mar 17, 2014
  9. CalDog

    CalDog New Member

    Here are some representative numbers from 1973:

    Cost of a new home: $35,500.00
    Median Household Income: $10,512.00
    Cost of a first-class stamp: $0.08
    Cost of a gallon of regular gas: $0.39
    Cost of a dozen eggs: $0.78
    Cost of a gallon of Milk: $1.31

    Obviously those numbers are higher today.

    But you can decide for yourself whether these numbers are 14 to 18 times higher -- like tuition at Penn or Colorado.
     
  10. me again

    me again Well-Known Member

    Nice comparison. Is the 1973 price of a home (35k) from California or Louisiana? That price would buy a millionaires mansion in Louisiana or a garden variety home in Los Angeles. LOL

    Everyone agrees that tuition trends are obviously higher, as is EVERYTHING else. Trends will obviously vary from state-to-state, so a one-size-fits-all formula cannot be applied.

    In Florida, here are trends from 1978 to 2014:
    www.flbog.edu/about/_doc/budget/tuition/Local-Fee-History-thru-2013-14.xls

    Source:
    State University System of Florida | Board of Governors : About
     
  11. CalDog

    CalDog New Member

    Your Florida numbers show a 7x tuition increase from 1978-79 to 2012-13.
    The Penn numbers I referenced in Post #4 show a 7.5x increase over the same time period.

    So we are in general agreement about the rate of tuition increases.
    The question is whether or not this is faster than the rate of overall inflation since 1978-79.

    General consumer wages/prices have not increased by that much over the same time period. For example, the federal miminum wage has only moved from $2.90 to $7.25 over that time. That's not up 7 times.

    Even gasoline hasn't risen by 7 times since 1979.
     
  12. me again

    me again Well-Known Member

    As the inflationary cost of education rises, is the ROI increasing, staying the same or decreasing? That is the bigger long-term question, especially for those who choose to go in debt for it.

    Over the next two decades, technical degrees will probably have a greater ROI than the softer degrees, especially as the job market is reduced in size (in relation to the working-age population), due to technology and outsourcing of jobs. The non-working-age population (retirees) continues to grow, which will skew the numbers.
     
    Last edited by a moderator: Mar 17, 2014
  13. Ed Edwards

    Ed Edwards Member

    I think the 27% over the rate of inflation for the past 5 years is more interesting.

    Basic economics suggests all other things equal price rises when demand exceed supply, however the exact opposite is happening in higher ed, there is more supply via DL.

    Gee I wonder then why this is happening?
     
  14. Johann

    Johann Well-Known Member

    I think it's partly a case of not every rise in price being in sync with the rise in the "nominal cost of everything" (5.25 times). For instance a modest brick bungalow that I bought for $18,500 in 1972 - and later sold - sold again recently for over $200,000 - an increase of around 11 times. Some things rise faster than others!

    Incidentally, tuition in Canada has risen - but it has done so in reasonable sync with many things. In 1960, four years of (arts) tuition at a public university in Ontario was about $2,000. Back then, that would buy the very cheapest domestic car - with blackwalls and zero options. Today, four years of arts tuition at the same University costs around $24,000. Cars cost more here than in the US; you can easily spend $24,000 on a not-fancy Chevy or Ford.

    Historically - in Quebec - tuition has always been much cheaper than other provinces. It's about half the price, in fact.

    These facts might explain why we have 50% more American students at Canadian schools, in recent years. Welcome to Canada, eh? :smile:

    Bienvenue au Canada! :smile:

    Johann
     
    Last edited by a moderator: Mar 17, 2014

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