Comments on economics, mystery fiction, drama, and art.

Sunday, March 15, 2015

College costs, student debt, and other things

This is very preliminary, and is only one chart.  What this chart shows is the number of hours someone would have to have worked at the minimum wage to earn (before taxes or any spending) enough to pay tuition & fees (the black line) or tuition & fees plus room & board (the red line) at the average U.S. public university, from 1965 to 2007.  Note that both lines are essentially flat until the early 1980s...then, the deluge.

(Click to enlarge)

I'm still working on this and expect to have something substantive to say in a bit.

A related point, especially relevant for private universities.  As an example, the school I attended had a listed tuition of $1,500 per year in 1965/66 (my first year), and it's now $42,500--or about quadrupled after adjusting for (CPI) inflation.  But the list price is not the real price.  In 2013/14, the school received, not $42,500 per student in tuition, but about $19,000 (according to the institution's audited financials).  My guess is that in 1965/66, the actual tuition revenues were not $1,500 per student, but maybe $1,000.  So the actual increase in (inflation-adjusted) per-student tuition revenue is not a quadrupling of revenue, but perhaps more like 2.5 times as much...tuition revenue has increased a lot faster than prices in general, but not, perhaps, as much as the "sticker price" makes it appear.


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