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The price of an education

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An unprecedented event has taken place — the University of the South (Sewanee), a liberal arts college in rural Tennessee, has decided to cut tuition for next semester by a staggering 10 percent. The school’s president, John McCardell, said that this was a move to counter the fact that higher education is on the verge of pricing itself beyond the reach of American families. In a world where colleges routinely increase tuition year by year without much regard for students’ expenses and financial burdens, this seems like a very heartening decision. But dig deeper and one finds that cutting college tuition is only beginning to scratch at the surface of the problem.

First, cutting tuition will mean that Sewanee has less money to fund its aid and scholarship programs. Cutting tuition by 10 percent has almost no impact on the 30 percent or so of students whose parents will just buy that new boat or maybe renovate a kitchen. Yes, average middle-class students are helped, but a short-term publicity stunt like this will only aid them for a year or two. In contrast, it would make more sense to let the rich keep paying the same price and use that money to fund lower-income students. Has Sewanee really thought about what happens when they are forced to increase tuition 8 percent for the next three years to make up for their short-sightedness? Who pays then?
Second, simply cutting the price of college does not reduce the costs. Sewanee is not cutting salaries or streamlining programs — it is simply trying to increase awareness and applications (demand) by reducing the price at which its product is up for sale. The “problem” with the education system is not that the price of college is too much — the costs are too high. Too many professors have tenure or too much money is spent on research. Cutting prices does not solve the root of the problem.

Third and lastly, colleges should not adjust prices based on economic downturns and upturns. The education that a college provides, at least in theory, should not depend on when you are learning it. When I started college in fall 2007, I knew it would cost me about $220,000. I knew this because in my freshman year I paid about $51,000 and the admission letter said I should expect fees to grow by about 5 percent each year.

Now imagine that the price of college depended on how the economy was doing: Anyone who went to school between 2003 and 2007 would have ended up paying over $500,000 because the market was doing so well. Then as soon as they graduated, and after spending all this money, they would be left penniless because of the sub-prime mortgage crisis. Similarly, students graduating in 2013 are going to be better off than those graduating in 2009 simply because of the state of the economy, not because of their abilities or their education and certainly not because of how much they paid for college.

Finally, this brings us to Carnegie Mellon. Last month, Carnegie Mellon’s Board of Trustees agreed to increase tuition for incoming first-years by 3.97 percent. The annual tuition now stands at the grotesquely large $43,160. In isolation, this number provokes anger and despair — why do we pay so much money?

But this was one of the smallest percentage increases in tuition in years. The goal is long-term stability in prices, not short-term spikes in order to secure publicity. Yes, Carnegie Mellon consistently ranks in the top 20 most expensive colleges in the country, but that does not mean that the Board of Trustees should go crazy and start cutting tuition.

Whatever its approach, it should start by looking at costs and not aimlessly cutting prices.