Students in the US have, according to the OECD’s 2018 education at a glance report, pay soaring tuition fees. According to the report, the US spends the most on college tuition amongst all of the developed nations enlisted. The U.S economy’s spending on tuitions, as reported, includes the contributions from individuals, families, and public expenditure.
Several factors have helped the students rake up exorbitant education loans facing exponential hikes with every passing year, the most conspicuous of them being student welfare services. These services dubbed as ‘ancillary services’ by the OECD include housing, meals, healthcare, and transportation.
The US economy’s annual share on spending for said services is estimated at around $3,370 per student, making it three times the average spending incurred by the rest of the developed world. This estimate includes both the government’s spending and individual payments, making the US economy rank number one in the world in terms of its expenditure on student welfare services.
However, even excluding the most visible of these costs, the tuition fees of an average American student is still dramatically higher when compared to the rest of the developed world. The source for the largest fraction of these costs can be narrowed down to one factor, routine operational expenses. The operational expenses amount to a staggering annual account of $23,000 per student.
This amount is higher than the cumulative spending of Finland and Germany on its core services. The reason why this amount keeps geometrically progressing over the years is simply that a college education is a service. Unlike a product, no amount of suitable technological advancement can reduce the manufacturing cost of producing College graduates.
How does the US economy growth inflate?
Furthermore, the expenditure on staff and faculty keep rising drastically as the US economy has seen an increase in the salaries of skilled, college-educated labor in the last few decades. Inflation-adjusted, the real cost of studying in the US now in comparison to 1950 is nearly twice, if not more expensive. The US economy’s growth itself can be vilified for its high tuition cost.
However, the economy is not to be blamed entirely; the cause for these tuition hikes are as much politically motivated. Ever since the 2008 recession, the universities have seen massive government cutbacks. These cutbacks have been escalating ever since on a yearly basis. The intentions for these cutbacks were to make colleges more efficient, but the consequence of this was making them more entrepreneurial.
To compensate for these cuts, the universities chose to shift the financial burden onto the students ergo, adding to the college tuition. Another way the colleges tackled the cutback issue was to enroll more out of state and full-paying foreign students. This essentially means that now, college education in the US is less about providing education to the students in the region and more about recruiting wealthier and hence, a more profitable student populace.
All is not moot; however, the US houses the vast majority of the top universities in the world. While there is no discernable metric to judge if the quality of education is truly superior to the rest of the developed world, the American college degree holder can earn up to 75% more than those who only completed high school. This comparative raise in the expected income of the two levels of education is much higher than their peers internationally.
All in all, what is most bewildering about the US education system is that the cost of a college education in the States is extremely market-driven. This is an anomaly because no higher education system in the rest of the world, developed or otherwise, is market-driven to the extent that the US system is. This is the major source for the tuition fees in the US being punitive; with the US economy, much like any other, being volatile, the education system takes a hit with every minor shift.