2009 June 30 Tuesday
Higher Education Costs Up More Than Inflation Yet Again

The National Association of Independent Colleges and Universities finds that educational costs at colleges and universities still keep going up faster than inflation.

June 29 (Bloomberg) -- Tuition and fees at private U.S. colleges and universities for the 2009-2010 school year will rise an average 4.3 percent, the lowest percentage increase in at least 37 years, according to a survey.

Never mind that the economy is flirting with deflation and we are in the worst economic downturn since the Great Depression. The education cartel is raising rates.

Hey, they've improved. Smallest increase since 1972-1973.

The 4.3 percent increase for 2009-10 is the smallest since 1972-73, when average tuition and fees at private institutions rose by the same rate. The increase is slightly higher than the 2008 Consumer Price Index of 3.8 percent. NAICU's figure is based on responses from 350 private, nonprofit colleges and universities.

What we need:

  • Large scale high res video recording of course lectures. State governments should fund this activity at state universities. Get more enduring value from paying professor salaries.
  • Make the videos downloadable and purchasable on DVD.
  • Develop web-based standard practice tests so people can test their mastery of topics while sitting at home or anywhere else with an internet connection.
  • Proctored standardized tests that you pay to take that let you get credit for knowledge in a subject without having to apply and enroll in a college.

This won't work for every course. But it'll work for most science, engineering, math, economics, and business undergrad courses. People who want to learn an economically valuable skill will be able to do so at low cost, at their own rate, with no transportation costs, and without disrupting their work day. They'll even be able to choose among many people teaching the same topic and therefore view a higher average level of lecture quality than they'd get from taking courses at a single college or university.

Automation of education cuts costs, improves quality, increases convenience, and increases availability.

Share |      By Randall Parker at 2009 June 30 10:27 AM  Education

Lyle said at June 30, 2009 10:49 AM:

Education is not only about learning facts, but also about learning how to work with others. For instance, in engineering only the first year or two is about learning facts, and the rest is project-based activity to learn how to design in a team.

That said, I think your design would work well for math and the math-based sciences (lower-level physics and chemistry) since team-work isn't as much of an issue. Assuming of course that you could actually get students to sit down to watch lectures. I have my doubts that with the competing demands of life many students would actually be able to do this.

miles said at June 30, 2009 11:06 AM:

What we need:

•Large scale high res video recording of course lectures. State governments should fund this activity at state universities. Get more enduring value from paying professor salaries.
•Make the videos downloadable and purchasable on DVD.
•Develop web-based standard practice tests so people can test their mastery of topics while sitting at home or anywhere else with an internet connection.
•Proctored standardized tests that you pay to take that let you get credit for knowledge in a subject without having to apply and enroll in a college.

Yes indeed.

Education scholarships are becoming more and more precious as the affordability of degrees is getting out of the reach of so many (especially white males who get no "special" help in obtaining them at all). We are pricing out many regular joes out there from being able to go to college.

Daniel said at June 30, 2009 11:30 AM:

>>>Education is not only about learning facts, but also about learning how to work with others. For instance, in engineering only the first year or two is about learning facts, and the rest is project-based activity to learn how to design in a team.

Solution: apprenticeships.

Truth said at June 30, 2009 1:25 PM:

What we need is price controls on University tuition. The Republicans should push this on populist grounds, decrying the "greedy universities" for their ripping off the general public.

No university should cost more than $5,000 per year. No book or lab fee more than $10.

Best of all, this will impoverish the University system and drive liberals out of power.

Mercer said at June 30, 2009 2:43 PM:

We do not need price controls. We need students and parents who factor the cost when choosing a college. I went to a community college then transferred to an in-state public college. My cost was a fraction of someone going to a private school for four or more years. This is still possible but many people base their choice on the schools amenities or reputation instead.

My favorite example of this is Patrick Henry College. The majority of the women there plan to be stay at home moms. Nothing wrong with that goal; but planning to drop out of the work force for several years after paying 100k for a four year degree makes no sense to me.

Michael Blowhard said at June 30, 2009 6:08 PM:

Cheers to all that. As far as lecture-type classes go, why NOT watch them on video at your own convenience? If you're really digilent, you can watch them again and again.

A bit of a lifelong learner myself, I've gone through a number of The Teaching Company's lecture series and have had a really great batting average. Some duds, but at least half of those I've tried have been superb -- better than 99% of the classes I took years ago at an overpriced Ivy college.

Which has led me to wondering about something ... Once a given course has been done on audio and video, and done really really well, why does it ever need to be taught again?

Example: the Teaching Company's western-classical-music specialist is Robert Greenberg, and he's great. His music-history 101, his intro to opera, his bios of individuals composers, I've listened to them all, and they're all fab.

Now ... Given that they're probably better than what's on offer at most colleges, why WOULDN'T a student interested in western classical music avail himself of Greenberg instead of attending class at Podunk U.? And how's that kind of thing going to affect the way higher ed works?

Randall Parker said at June 30, 2009 6:36 PM:

Michael Blowhard, Thanks for the report from your personal experience. Modest proposal: Do a post on your Learning Company courses and basically review them.

The way higher ed works: The obstacle to reform is that these institutions grant degrees and do not want to undermine demand for their regular courses. They know that video recording will so drive down prices that most of them will have to shrink or close.

What we need: A few accredited bricks-and-mortar institutions to decide they've got more to gain from the video course business than from their bricks and mortar. Likely these would be smaller players. Some foundations could help make this happen. I've already pitched a subset of this idea to people from both the Liberty Fund and Templeton Foundation.

O'Brien said at July 1, 2009 8:19 AM:

The cost of education is absolutely ridiculous. I think it really is just a way funneling money towards government-employed elites. Of course this is exactly the type of thing that was predicted in 1984...socialism would be promoted in the name of altruism, but the reality is that socialism is a way for the elites to suck more money from everyone else. I believe the USA is definitely heading towards soft totalitarianism.

The good news is that there should be more "creature comforts" than was predicted in 1984. The bad news is that mind control methods will become far more advanced than Orwell could ever have imagined.

kurt9 said at July 1, 2009 11:04 AM:

All of you are forgetting something. The purpose of higher education is not to actually teach anything. Its purpose is to sell an expensive credential that is really a proxy for an IQ test that you show to perspective employers. The fact that you have a degree from Harvard tells an employer that you beat out 90% of the other applicants who, in turn, were in the top 5% of their class. Taking internet classes that teach the same thing as Harvard does not say the same thing to an employer. Thus, internet education will not make any difference in the credential driven career milieu.

Randall Parker said at July 1, 2009 11:24 AM:


But the IQ level demonstration of a college degree is besides the point. I am proposing a cheaper way to signal your higher intelligence.

Look at it this way: a 16 year old could watch lots of video lectures, take a lot of tests, get a degree in a hard subject (or two) by age 19. That's a powerful demonstration of higher IQ and it is way cheaper and more efficient.

kurt9 said at July 1, 2009 12:16 PM:

Yes, but the schools will not offer the internet classes unless they can charge lots of money for them.

Aki_Izayoi said at July 1, 2009 4:42 PM:

I do not think education will do much. In Sweden, there are a lot of unemployed people and the Social Democrats only want more university spots because people in those spots do not look for work; that is, they would not be listed as "unemployed" in the statistics, but in education.

We do not need more "efficiency;" that would just cause more unemployment. The Swedes embrace "inefficient" make-work jobs such as "labor market political activities" and forcing people to go on early retirement to deal with unemployment. I think it is better to have "inefficient" make-work jobs instead of increasing education, at least the make-work jobs give people something to do even if they have no way of signaling higher intelligence.

"O'Brien," I like your name. Well, in Sweden, there is currently no oligarchic collectivism; just collectivism. It is not the hellhole in 1984.

Randall Parker said at July 1, 2009 6:05 PM:


Like so many people on the Left you assume incorrectly that the problem of production has been solved and we can afford make some people unproductive in make-work jobs. Got some arguments for why that's not true:

1) We are about to hit Peak Oil. Lots of jobs that have been getting done using oil power will need to get done in other (and often more labor-intensive) ways.

2) Our infrastructure is crumbling. We need to free up workers and cash to invest in infrastructure. Cutting spending on education is an obvious way to do this. If we could cut educational expenditures in half in the United States that would free up 2.85% of GDP out of the 5.7% currently going to education.

3) The brain power tied up in universities is especially a waste we can not afford as a growing portion of the US population have low IQs.

Aki_Izayoi said at July 1, 2009 7:08 PM:

My assumption is that there are too many people to do those type of jobs and the ones available are stressful. (The only positive effect of peak oil that I know of is major disruption of global supply chains as described by Jeff Rubin.) If a job is very exhausting, it better for a machine to do it, even if human work would increase the amount of jobs available. I wonder if we could give unskilled labor highly paided cushy jobs. In Sweden many of them are in make-work or government jobs and few people who vote those schemes away.

Fine, put the unskilled in infrastructure jobs. That has to be done by someone and has utility too.

If you want to free up cash, you could simply use QE to pay the workers to do the infrastructure projects. Better than bailout out bank bondholders and propping up the mortgage market.

I actually the production problem has been solved... we only have undercapacity in dealing with the energy issue and in health care. The infrastructure problem is more political because it involves public goods and the US does not have large social cohesion and have intertemporal discount rates the prefer present time orientation.

Randall Parker said at July 1, 2009 7:31 PM:


To develop oil substitutes requires lots of engineers, scientists, managers, and technicians. New energy production plants must be built, new assembly lines must be designed, new processes and technologies must be developed.

Stressful jobs: You don't want them done because they are stressful? Or you do not want to force dainty academics into stressful jobs?

Highly paid cushy jobs: not at my expense.

Sweden once again: We have far too high a portion of our population that is low IQ a compared to Sweden. We can't afford to create make-work jobs for so many people.

Infrastructure and health care both cost big money. We need to free up money to make it available. Where to free it up from? The education sector has tons of fat. Time to cut it down.

Aki_Izayoi said at July 1, 2009 8:08 PM:

I consider "labor market political activities" (they are "officially" education and trainee positions 100% subsidized by government often having little relevence to any future job they might have; so it is akin to a make-work job ) to be cushy. I do not know if they are highly paid relative to US government workers (but they are highly paid relative to US minimum wage), but they are cushy.

How about downsizing finance and law. Those sectors have a bunch of intelligent people who do not create much utility for society.

The world was better off when agricultural was mechanized. That what I meant when I said, "If a job is very exhausting, it better for a machine to do it, even if human work would increase the amount of jobs available." Regarding stress, I suppose a manufacturing job in the 1960s in the US is less stressful than a service sector job at Wal-Mart today if one adjusts for compensation.

Randall Parker said at July 1, 2009 8:12 PM:


5.7% of GDP goes to education. If we leave aside criminal defense attorneys and prosecutors and the judges that hear their cases what percentage of GDP does the rest of the legal profession take in? My guess is it is a lot less than education takes in. You want to make your case for cutting lawyers to save money? Dig up some percentage of GDP figures for law.

Of course, the biggest sector in the US economy at this point is health care. That's another area where greater automation is needed.

Aki_Izayoi said at July 1, 2009 8:24 PM:

Here is what a "HDB-realist" has to say, not some left wing socialist:

"There is, perhaps, a fourth basic necessity: healthcare. Unlike the other basic necessities, the cost of healthcare is not going down. This is primarily because healthcare has to be delivered by high-wage individuals such as medical doctors, and technology doesn’t seem to have much of an impact on the ratio of healthcare-worker time per patient.

With regards to doctors, there is no reason why their numbers cannot be greatly increased. There are approximately three times as many people graduating law school each year as graduating medical school. If some of those law students became medical students, the doctor shortage would be easily solved without any loss of people doing work that adds actual value to the economy. "

Are the IQ requires for law school lower than medical school? It might reduce some costs, but it wouldn't completely solve the problems.

And about Swedish employment/unemployment from a Austrian libertarian perspective:

"And the number of people employed in Sweden is actually lower than in 1980, too. You have to go back to the mid-1970s to find employment numbers lower than the current ones. While total employment has been roughly unchanged since 1975, it masks a significant decline in male employment. And if you look only at the private sector, employment is now at a level lower than in 1950.

Social Democrats still often claim that Sweden has a comparatively high employment rate, but this claim is based on deceptive employment statistics that count as employed many who have been on long-term sick leave or in some other way on the receiving end of transfer payment programs, even though they don't actually work.

Moreover, the "stay at home mom" is very rare in Sweden. Because of the incentives created by the feminist construction of the Swedish welfare system, mothers mostly leave their children at government day care centers. Even if you believe that mothers who stay home to take care of their children are the victims of patriarchical oppression, you cannot deny the childcare takes a lot of work, but only those who take care of other people's children count as employed. By shifting childcare from the home to the public sector, the government further exaggerates Swedish employment figures.

The headline unemployment rate in Sweden is only 5–5.5%, but this number is extremely misleading as it only includes a small number of the people who the government pays not to work. Many unemployed are sent to so-called "labor market political activities" — activities whose only purpose is to reduce the official unemployment rate.

If we ignore this ruse, unemployment is 8%. And if you also include the enormous number of early retirees and people who live off sickness benefits, the real unemployment rate is more like 25%. The number of early retirees is 540,000, more than double the number of officially unemployed."


I actually believe he is correct on most of those issues. I think his statistics on sickness benefits and early retirement are exaggerated as many of them retire of legitimate purposes such as disability, but his argument is still correct.

Randall Parker said at July 1, 2009 9:34 PM:


While top lawyers earn big bucks most do not.

Again, need % of GDP figures.

Automated medicine: It is certainly possible. Already there are expert systems which beat all but the very best specialists in certain areas of medicine. But the expert systems are way underused.

Randall Parker said at July 1, 2009 11:06 PM:

I've got a newer higher figure for education's percentage of GDP in the United States: 7.1% in 2005.

So that makes education an even more obvious target for automation and cost cutting.

Daoud said at July 2, 2009 7:24 AM:

"It is not the hellhole in 1984."

What's 1984 in the islamic calendar?

sg said at July 2, 2009 11:04 AM:

I think we are overlooking the point that so many women go to college because they are expected to. They don't want careers and quit as soon as they can to be home with kids. I have a ton of well educated friends who fit this description as well as plenty who got worthless degrees and are working jobs that don't require degrees.

truth said at July 2, 2009 3:23 PM:

Most education is just liberal bs. Price controls will eventually starve the system of funds and put liberal operatives out of work.

That's the point.

Republicans need to treat universities like democrats treat corporations. The "greedy university" should be the common nomenclature of Republican Party, just like "greedy corporation" is common among democrats.

Lots of people will want lower education costs and the costs are borne by your political enemies. What's not to like?

Me said at July 14, 2009 9:32 AM:

There is a difference between watching a video and attending a live lecture. I am not sure its worth the tuition price though. Universities would never abandon that format. What is needed is for the higher education system to return to a market economy. Do students really "feel" the true cost of college? Does it really cost $17,000 per student to teach them? IMHO, colleges have become fat and bloated. They know they can increase tuition at these rates because people can still pay them (with increasing help from loans, government, and mommies retirement savings). My college $300 million donation from someone who passed away. Did they lower tuition for all students? No, they built a new building and expanded. When the money is gone, tuition now has to cover the costs of lighting, heating and maintaining this new building. Here is my suggestions to starve the beast:
-Require colleges (public and private) to break down tuition to applicants, showing where money goes
-Slowly turn off the college loan system (eventually, you shouldn't need to take out a loan to go)
-Professional degrees should offer standard exams so that any college can graduate students proficient in a field (gets rid of college status, "I'm a better lawyer since I went to Harvard", Are you? Or were you just able to buy a better degree on the wall?)
-Don't offer degrees or loans for a field where there is no hope of you paying it back (getting liberal arts degree from pricey private college and end up making $25K out the door, stupid, and stupid to give a loan for that).
-Sorry, the world's largest hot tub will have to go.
-Actual teachers in class. I paid for the professor's salary in my tuition and I got a T.A. WHO CAN'T SPEAK ENGLISH!

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