July 12, 2014

HIGHER EDUCATION BUBBLE UPDATE: Students Face Debt By 1,000 Fees.

That $4 is not a large fee. Even the poorest student can probably afford it. On the other hand, collectively, UCLA’s student fees are significant: more than $3,500, or about a quarter of the mandatory cost of attending UCLA for a year.

Those fees are made up of many items, each trivial individually. Only collectively do they become a major source of costs for students and their families and potentially a barrier to college access for students who don’t have an extra $3,500 lying around. . . .

Colleges seem to be subject to this budget problem in spades, because until very recently, passing on all the costs to the consumer was very easy. Highly motivated coalitions get together to demand something, and eventually the byzantine, quasi-democratic institutional governance often delivers that thing, along with the associated cost. Each of these new demands — a better gym, a new student center for underrepresented groups, fancy new buildings for alumni to put their names on (but not pay to maintain) — generates a small individual cost per student. Over time, however, those little individual costs aggregate into college bills that grow much faster than inflation year after year, decade after decade.

If UCLA had had to treat this as a budget problem — in other words, if they’d had to take money from something else in order to fund the concerts — then they probably would have decided that “more famous concert headliners” are not a core part of delivering a UCLA education. But instead, they made it part of someone else’s budget problem. Someone who is probably just going to sigh and increase the student loan a bit.

Or not, if they’re reasonably well-informed.