General Facts and Figures
For the 2010–11 academic year, annual current dollar prices for undergraduate tuition, room, and board were estimated
1. $13,600 at public institutions
2. $36,300 at private not-for-profit institutions
3. $23,500 at private for-profit institutions
Causes of Tuition Increases
1. Privatization and Cost Shifting- the reduction of state and federal appropriations to state colleges, causes an institution to shift the cost over to students in the form of higher tuition. State support for public colleges and universities has fallen by about 26 percent per full-time students since the early 1990s. The shift from state support to tuition indicates an effective privatization of the public education.
2. Bubble Theory- According to the theory, while college tuition payments are rising, the rate of return of a college degree is decreasing, and the soundness of the student loan industry may be threatened by increasing default rates. College students who fail to find employment at the level needed to pay back their loans in a reasonable amount of time have been compared to the debtors under sub-prime mortgages whose homes are worth less than what is owed to the bank.
According to Ginsberg, “there have been new sorts of demands for administrative services that require more managers per student or faculty member than was true in the past.” The Goldwater Institute echoes this sentiment with its findings that, “Between 1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent.”
3. Student Loan: Another proposed cause of increased tuition is U.S. Congress’ occasional raising of the ‘loan limits’ of student loans, in which the increased availability of students to take out deeper loans sends a message to colleges and universities that students can ‘afford more,’ and then, in response, institutions of higher education raise tuition to match, leaving the student back where he began, but deeper in debt.
4. Lack of Consumer Protection: A third, novel, theory claims that the recent change in federal law removing all standard consumer protections (truth in lending, bankruptcy proceedings, statutes of limits, the right to refinance, adherence to usury laws, and Fair Debt & Collection practices, etc.) strips students of the ability to declare bankruptcy, and, in response, the lenders and colleges know that students, defenseless to declare bankruptcy, are on the hook for any amount that they borrow -including late fees and interest (which can be capitalized and increase the principal loan amount), thus removing the incentive to provide the student with a reasonable loan that he/she can pay back. As proof of this theory, it has been shown that returning bankruptcy protections (and other Standard Consumer Protections) to Student Loans would cause lenders to be more cautious, thereby causing a sharp decline in the availability of student loans, which, in turn, would decrease the influx of dollars to colleges and universities, who, in turn, would have to sharply decrease tuition to match the lower availability of funds.
Other factors  that have been implicated in increased tuition include the following:
· Colleges and universities have accumulated multi-billion dollar endowments, especially at elite universities. Harvard University announced its endowment was worth $32 billion, and Yale reported an endowment of $19.4 billion on returns that were tax-exempt. In 2011, California’s two public university systems had more than $7 billion in endowment funds but raised tuition fees by 21% combined. These figures raise related concerns about “institutional gap” — meaning that universities may not be managing their endowments appropriately and that other universities try to compete with elite institutions, thus charging higher tuition fees in the competition to retain high faculty- and status-ranking.
· The practice of ‘tuition discounting,’ in which a college awards financial aid from its own funds. This assistance to low-income students means that ‘paying’ students have to ‘make up’ for the difference: increased tuition. According to Inside Higher Ed, a 2011 report from the National Association of College and University Business Officers explains more about the practice of tuition discounting. The article notes that “while the total amount spent on institutional aid for freshmen rose, the average amount that institutions spent per student actually dropped slightly,” and gives, as one possible reason for this drop, that between 2008 and 2011 “colleges and universities had to lower the amount they gave to each student to help cover a larger number of students.”
· According to Mark Kantrowitz, a recognised expert in this area, “The most significant contributor to tuition increases at public and private colleges is the cost of instruction. It accounts for a quarter of the tuition increase at public colleges and a third of the increase at private colleges.”
· Kantrowitz’ study also found that “Complying with the increasing number of regulations — in particular, with the reporting requirements — adds to college costs,” thus contributing to a rise in tuition to pay for these additional costs. Since deregulation, the average cost of tuition and fees at the state’s public universities has increased by 90 percent, according to the Texas Higher Education Coordinating Board. Of the 181 members of the state’s 83rd Legislature, more than 50 have voted at least once to advance efforts to end tuition deregulation, while fewer than 20 have consistently voted to uphold it. Many have never voted on the issue, and more than 40 members are freshmen. This rise, however, is not entirely negative. Tuition increases help universities make up for that in their budgets
Point of Interest: Disproportional Inflation of College Tuition
Cost of living increased roughly 3.25-fold during this time; medical costs inflated roughly 6-fold; but college tuition and fees inflation approached 10-fold. Another way to say this is that whereas medical costs inflated at twice the rate of cost-of-living, college tuition and fees inflated at four times the rate of cost-of-living inflation. Thus, even after controlling for the effects of general inflation, 2008 college tuition and fees posed three times the burden as in 1978.
[http://www.theatlantic.com/international/archive/2013/05/the-high-price-of-a-free-college-education-in-sweden/276428/]: Important article that gives a slight preview of an alternative education system that will be viable in the United States of America.
Neoliberalism and Commercialism of Higher Education
Increasingly, education is fashioning students into a productive labor force rather than teaching them more traditional academic ideals.
The neoliberal turn to privatization and the commercialization of education is an area of concern for British universities. Since the 1980s, neoliberalism has been expressing itself in university syllabi. Abandoning previous values of critical-thinking and challenging basic assumptions, the focus leans towards teaching vaguely defined “skills” such as “teamwork,” “communication” and “leadership.”
Last year’s plans to raise tuition fees in Britain to a maximum of £9000, $13,731 at today’s exchange rate, were coterminous with cuts of £2 billion in funding for education. Universities’ lack of funding caused them to compensate for lost income by hiking up tuition fees.
What is Neoliberalism?
In the 1970s, responding to a period of stagflation (inflation with rising unemployment), former UK Prime Minister Margaret Thatcher and former U.S. President Ronald Reagan were the first to advocate the creeds of neoliberalism. This involved political-economic practices of privatization and deregulation besides the promotion of free markets and free trade. Neoliberalism rapidly spread across all G7 countries (the seven wealthiest countries on earth, the US, the UK, France, Germany, Italy, Canada and Japan) before being imposed via violent military coups onto many countries in the ‘developing’ world, including Iraq, Poland and most of South America.
The main intent of neoliberalism is to generate wealth by opening up countries to free trade, trade between countries that is not regulated by the government, allowing for deviance from ethical practices. However, studies such as those by economists Duménil and Lévy indicate that the primary effect of neoliberal strategies across the world has been for wealth to become increasingly concentrated within the richest strata of society. According to these studies, neoliberalism does not even improve economic growth, with global growth falling by almost 3% last year. In contrast, countries such as India and South Korea, spared from certain aspects of neoliberalism, saw rapid growth thanks to investment in industry.
Other implications of neoliberalism include the reduced power of organized labor, increased productivity paralleled by declining wages in order to extract more value, and most poignantly, as analysts such as David Harvey have found, the pumping of wealth from the poorest to the richest members of society via transfer pricing and cheap migrant labour.
Neoliberalism and higher education
Many academics are against the reforms in education taking place, whilst others argue that it is a necessity in a time of economic crisis. Doctor Jason Hickel, lecturer in Economic Anthropology at theLSE explains, “This seems like a relatively innocuous change, but to me it’s a sign that the way we think about higher education is changing for the worse.” Some might reject this, claiming that teaching career-orientated skills are crucial in order to bolster students against the current economic climate. “Of course, students need to get jobs upon graduating. I am sensitive to that.
The proponents of the New Enhanced Course Guides argue that students will be able to use the language from the skills section to fill out their CVs and to convince employers to hire them.” Nevertheless, as Hickel argues, “The kinds of skills that the New Enhanced Course Guides [at the LSE] include, reflect the language of the corporate world and the ethic of entrepreneurial self-management. Even if they didn’t, they would still send students the wrong message, namely, that education is designed to equip individuals with marketable skills, and that the ultimate end goal is productivity.”
Furthermore, the way people are taught will have transformative effects on the world as a whole, as generations of students progress into the jobs market and foreign students return to their countries of origin, carrying with them the neoliberal articles of faith. After coming home with neoliberal values, many American-educated students led military coups in which the pursuit of commercial ideals implicated the death of hundreds of thousands. This was the case for Chile in 1973, where the insurgent government was led by US-educated graduates. More recently, in 2009, a coup in Honduras was led by graduates taught at the Western Hemisphere Institute for Security Cooperation, a US training ground based in Georgia, which has been linked to to torture cases, dictatorships and military coups. Countries that experienced such coups, according to data gathered by the CIA, are among the most economically unequal in the world. With an intake of students from 145 different countries, spanning from South America to the South East Asia, the global impact of education at universities such as the LSE will be equally significant.
Besides the circulation of powerful neoliberal ideologies throughout academia, tuition hikes also become subject to marketization, the treatment of education as a business and students as a future labour force. Evidencing this, one year into its term in office, the British Conservative Party held meetings to discuss how universities could help contribute to growth in the economy.
In this process of marketization, austerity measures have led to increased tuition fees, which students find increasingly difficult to pay and applications to universities are declining. In 2011, there was a decrease of 20,000 applications. This implicates the bursting of the tuition bubble which has led to a further neoliberal assault on education through managerial-imposed readjustments of academic faculties as well as closures of poorly achieving departments. This in turn has led to declining moral and increased strategic competition between academic staff.
Education has also become increasingly quantified via standardized testing, as universities and departments are ranked by performance in a way that brushes over divergences in opinion, steering the control of curriculum and organization of departments. With layoffs as well as cessations of entire disciplines in certain universities, underachievement is blamed upon the teachers rather than the effects of reduced funding.
For example, the closure of Exeter University’s chemistry department in 2006, determined principally by financial motives, was met by vociferous resentment on the part of the chemists as well as students, academic unions and the Royal Society of Chemistry. The department was shut down due to its low position in the university ranking, the high cost of running its laboratories and in order to attract further grants. Students and teachers alike responded with letters and emails of complaint. Nevertheless, the university’s director, Steven Smith, persisted in this profit-making tactic.
What are the viable alternatives?
Neoliberal techniques involve the commercialization of education, focusing principally on preparing students for the world of work. As Hickel argues, “Those of us who teach in the liberal arts and social sciences generally reject this approach. We encourage our students to value learning for its own sake, and we try to sow in them a passion for asking difficult questions about the world and equip them to think critically about taken-for-granted assumptions.”
From the start of the 21st century, academics and institutions have started calling for a revival of the cosmopolitan ethic (‘an injury to one is an injury to all’), which provides tangible alternatives to neoliberalism. Others advocate Democratic Learning, which, in drawing on the views of the educator, John Dewey, provides a framework for teachers, involving methods influenced by the students themselves and, takes a humanist approach to teaching, concerned with human welfare. So doing, lecturers will supply students with the tools necessary to become fully active democratic citizens. As Hickel claims, “We need to be empowering students to resist this kind of commodification of everything rather than encouraging it, especially given that all indicators seem to suggest that it’s leading our society down a dead-end road. For us, higher education is more about learning how to challenge the status quo rather than simply learning how to climb the ladder.”
On the other hand, some take a less optimistic view of British education. As Tarak Barkawi, lecturer in Politics at the New School for Social Research explains, “For many years now in the UK, faculty have been forced to put things on their syllabi (like learning aims and outcomes) so that battle was lost some time ago.” Barkawi also introduces yet another side of the debate: “For what it is worth, the neoliberal modernizers are bad, but so too are those who cite traditional academic values to protect cosy jobs, or to not do their jobs, or to carry on doing what they always have done. So you have to be a little careful at taking everything at face value.”
As broached by Barkawi, the commercialization of British education is not a black and white issue but a more nuanced matter of much contention. There are those who advocate a profit-orientated education, others such as Hickel who plead for a return to critical engagement and a humanist outlook, and finally, those such as Barkawi who have a more tentative view. However, as the league tables demonstrate, for British universities not to lag behind the rest of the world there must be a reassessment of the purpose of education.