SIO526: Why Is College So Expensive?

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:00:13 Thomas: And welcome to serious inquiries only. This is your host Thomas Smith and today I'm joined again by an amazing guest and my friend David O 'Brien. You didn't catch the previous couple episodes we did last month, David is a higher education policy scholar, works with the California Community Colleges System. Time we fact-checked, I say we, the royal we, fact -check the daily talking about Trump's new rules to kind of threaten student loans and Pell Grants and all that. And during that, the question of just cost of college came up. And I if David would want to give us a deep dive on why is college, why are universities so expensive? What happened? What's going on there? Are they so expensive. Is it a misconception? What's really going on there? So David went into a cave and did nothing but work on this for an entire. No, somehow he found the time to check that out, research it. He's coming back on the show to tell us what he found. I'm excited to get to it. Take that first break. And then when we come back, we'll talk to David O 'Brien about why why college is so expensive.

0:01:31 Thomas: Back on the show is David O 'Brien. How are you doing, David?

0:01:34 David: Sir. Pleasure to be back here.

0:01:36 Thomas: Done the reconnaissance that we've asked of you?

0:01:39 David: Have indeed. I had been buried deep in the literature. My home office looks like, you know, one of those professor's offices from the movies where it's just like unnamed stacks of paper and books and all that. And, you

0:01:51 Thomas: You can read paper, you wizard? That's crazy.

0:01:56 David: And my hair is all flaccid and everything. And I got the glasses on the long chain. Really been diving deep here.

0:02:02 Thomas: Yeah. I hope folks have have heard the original two episodes back a few months ago. But in that, we kind of put a pin in it figure to out in detail why college costs so much. Something I've been really, really interested in, especially because eventually, I mean, maybe my kids will go. I don't know. I'm not sure if it'll matter when they're ready, but we'll see. Either way, I've always wondered. So what do you have for us?

0:02:26 David: Well, this is a great topic and thank you again for featuring it and for the conversation. Last time, you know, we were talking about kind of student loans and all these new Trump administration rules that they're putting on the federal student loan system and our conversation that time because it kind of got into One big question, you know, one thing that I think I and a lot of other people always have about how the media tends to sort of sane wash, to use the term that's so often used, the Trump administration's approach, particularly when it comes to kind of lesser salience issues like higher education issues that aren't as, you is a big issue. It's a very relevant issue. Like every time you do polls on this topic, when you ask, well, parents like you yourself, right?

0:03:13 Thomas: Hmm.

0:03:14 David: When you ask parents, like, what are some of your concerns? One of the top, inevitably, like three concerns out of all there is in the universe that people with children will say is the cost of college and being able to afford it for the government, actually.

0:03:26 Thomas: Pedophiles walking the streets and no one seeming to care oh sorry that's the epstein files oh no yeah I gotta run but in there but after several hours of how pedophiles run our government and all that then it's college

0:03:40 David: We're talking college costs. Yeah, exactly, exactly. Let me bore your listeners for just a minute because I do think it is important, as dry as it sounds, to kind of set and define a couple of terms here when we're talkin' about college costs, so a couple things that are gonna come up, I think, during our conversation. The word tuition, I think everybody knows what it means, right? But always important just to clarify, in its most literal form, we say tuition, we're talking about the costs of the payments that, you know, the consumer of the product, as much as I hate looking at it that way, the student or their family pays that go towards the direct instructional costs, right.

0:04:18 David: So that's your professor salaries. Right. The actual costs of like educating the student in the classroom.

0:04:26 Thomas: So are you not counting things like housing or whatever

0:04:28 David: Correct. We'll get to that in a second. Also mandatory campus fees for things like the library, for things, like, using the gym, the health services, some of which a student can opt out of. But pretty much every college in some form or another has some form of kind of mandatory fees that a student has to pay. They cannot opt out. They pay for services that aren't necessarily considered direct instructional costs. But since they are mandatory, when I and most people say tuition, what we really mean is like tuition plus any mandatory fees that a student has is responsible for. You can opt out of, right? Even if that student's never going to use their library the entire time they're on campus, for whatever

0:04:30 Thomas: Sorry

0:05:13 David: Reason, some... And look where you ended up. For some reason...

0:05:13 Thomas: I didn't yeah unable to read no I'm just kidding please

0:05:19 David: The literacy crisis is real, my friend. For some reason, you know, some time ago, we all decided that things like that library fee had to be a separate cost, separate on the balance sheet, right? So for all intents and purposes, when I talk about tuition, I'm saying...

0:05:34 Thomas: I went to business school so let me correct you it's not on a balance sheet that's where your assets and liabilities are sir you mean some sort of itemized uh invoice or something I'm using my little bit of college you know you gave me the opening so So that

0:05:45 David: There go. Yes, exactly. You could probably also... Yeah. I appreciate it. You could also probably help us figure out why so many colleges are in debt, but that's another matter. But so tuition, when I say tuition, I'm talking like tuition plus the mandatory fees. College, again, this is important. I'm sorry to be a nitpicker, but a lot of people... There's actually different definitions of what the term college means, right?

0:05:55 Thomas: Is Oh, wow.

0:06:09 David: So, you institutions that in my day job we oversee, the community colleges, there are people that don't count those when they say college.

0:06:17 Thomas: I feel like this is less about a definition of college and more about like if you are if someone is running the numbers on tuition is so high, it's like it's going to deeply matter what you're counting as college. Are you counting trade school stuff? Are you accounting Trump University? Or can't you know? So, yeah, it makes sense.

0:06:32 David: Well, for our purposes, the big divide that kind of also matters is public colleges and private colleges, right? And within the private colleges you have most of them being non -profits like Stanford, UOP, etc. And then you have for -profits, like University of Phoenix and others, which a friend of ours got at me for kind of dissing on our last podcast. Some people would argue they fill a niche because they tend to be like the career schools. When people say trade schools, trade schools is an old term, it's an outdated term. These days, most of the functions of what we used to call trade schools have either been absorbed by community colleges or for -profit career colleges. That's the definition there, college. And then lastly, you know, you mentioned the housing and all that. So I am going to talk a lot about a term here called the total cost of attendance. This is an official term that the federal government came up with back in the 70s. They require every single college or university in the United States, public or private, profit or nonprofit, if your students receive federally funded financial aid. Meaning federal student loans, federal grants, scholarships, etc. Your institution must calculate and publish in public on your website a total cost of attendance each year. And that is the tuition. It's the tuition and the mandatory campus fees. It is room and board, which is again just a fancier way of saying housing and food, right? Mean, room and board is the term you use for students who live on campus, but a lot of college students don't live on -campus, right, so it's just housing and food. It's transportation to and from campus, got to get to campus somehow. Things like textbooks, any sort of technology that you have to buy for a certain program, lab equipment, that sort of thing. And increasingly these days, more and more College students are parents, right? They're coming a little later in life and going back to school, and so child care is considered a cost.

0:08:33 Thomas: How would you account for that but

0:08:36 David: That's calculated usually by the financial aid office, and I can tell you without going into too much detail because this would take us hours off track, that's it's not always the most scientific or precise calculation.

0:08:48 Thomas: When you say they're calculating they just have to do like some sort of average of okay

0:08:53 David: Typically, for instance, if you're talking about off -campus students and every institution has to develop a cost of attendance, both for on -campuses students, which is easier to quantify because they're the ones charging the room and board, so they can tell you exactly what it is. For off - campus students, they will use things like surveys of market rate rents in the region, right? For rent for like a single, a one -bedroom apartment, that sort of thing. Also surveying students directly, which I did in a previous job when I worked for the state financial aid agency. We just administered a survey of RAAS students. How much are you paying every month for rent? How much are you paying on meals, meal plans, things like that?

0:09:23 Thomas: All

0:09:31 David: Of that has to be calculated by the college and published for the main reason being that the federal government wants to make sure that students aren't getting overpaid in federal aid. So let's say your institute, your college has a total cost of attendance of like $20 ,000.

0:09:30 Thomas: Right for a second I thought it was I was because they cared about how much kids are paying and how is everybody no it's actually so they that don't overpay in when they're okay yeah fair

0:09:54 David: It really is, right? So let's say you're going to a college that has a total cost of attendance, which is all those things combined of about $20 ,000. And you combined, you know, you show up, you did all your financial aid forms, right, you applied for all the scholarships, and you somehow got like $22 ,000 in scholarships. Well, you can't take all of that money. And the federal government will actually reduce your federal aid down to the 20 ,000 to make sure you're not getting what's called over awarded. So that's The main reason why every college has to have and publish and calculate this thing called cost of attendance. You do hear some griping in some quarters politically, and you can guess kind of what side this comes from. You hear some griping from people who say things like, well, wait a minute. Why is housing considered a cost of attending college? I pay house. Basically, every adult who lives on their own anyway has housing costs.

0:10:44 Thomas: If you you weren't going to college you'd still be paying for housing

0:10:46 David: You'd still be paying for housing, you'd still paying for food, you still be paid for transportation. I think one argument that a lot of people use in response, and there's a lot research to back this up, is that students who aren't able to take care of those expenses, students who are what we call food insecure, housing insecure, they're not going to be academically successful. I mean, the research is very clear on this. There's a sociologist I've worked with a lot named Sarah Goldick -Rab who says something to the effect of a student who's sitting in class wondering where her next meal might come from or where she's going to sleep that night if she has to sleep in her car again or there might be a shelter bed open for her or if she's gonna be sleeping on the street and you'd be surprised how many college students today are in fact classified legally as homeless.

0:11:20 Thomas: Man

0:11:33 David: Students are not going to be successful. And again, if you want to take it back to just kind of the cold, hard calculations of we're taxpayers, we as taxpayers are not getting a good return if we're spending money on students to get educated in our colleges and those students are sleeping in their car or scrimping together meals, saving change, things like that. So that's one of the reasons why we talk about the total cost of attendance there is that it is more than just that tuition. I to take us to this question of has the cost of college really gone up, right? Because it's important to quantify that yes, in fact, even when you adjust for inflation.

0:11:32 Thomas: Yeah oh wow

0:12:13 David: Let's just talk about tuition and fees for a second. Got some numbers here and have citations for all of these as well. But if we look to like the early 1970s as a starting point, which is kind of a thing that a lot of people do in higher ed because that's when a lot funding and policy started to shift and then it really picked up in the late 70s and then into the Reagan administration, which we talked about last time. Average nationwide tuition for a public university the early 70s was about $3 ,200. That is inflation adjusted. That's not 70s dollars, that's 2025 dollars. Now in 2025 dollars, so just direct comparison, it's over 11,371 to be exact. So accounting for inflation, tuition at public universities has gone up about 350%. In roughly a 50 -year period. Colleges, it's been a significant increase, not as much. But private colleges, in 1995 is the number I found, the average tuition and fees in 2025 dollars, inflation adjusted, was about $26 ,000. And 2025, again, same one -for -one comparison, about $45 ,000, so that's a 74 % increase when you account for inflation.

0:13:29 Thomas: So not as much yeah

0:13:31 David: As much, but in summary, college does cost more than it used to. And that also includes, by the way, room and board have had similar increases if you factor those in. And private colleges, you know, increases over and above inflation. Here I just want to introduce one more concept, and it's an important one when you talk about the economics of higher education and who's paying what. And it's this idea that is, again, an official term in higher education called net price, right? Meaning what are students or their families or whoever's paying that bill, right, sometimes it's a student on their own, sometimes the parents, sometimes a combination. What are they actually paying? Not the sticker price, but what are they on the hook for when you consider that most Low and middle -income students. Do get some form of financial aid. It's not always enough. I'll talk a little bit about amounts in a minute. But majority of students who are not wealthy enough for their parents to just cut a check for the whole amount are getting some of their costs covered by grants, loans, and scholarships. This is actually especially true, believe it or not, at the private universities.

0:14:36 David: This is like the dirty little secret of higher education. Most students do not pay the sticker price.

0:14:42 Thomas: It's weird I definitely found that at uop that was definitely true I don't really understand why fully they do that but I feel like it's there's some reason that

0:14:50 David: I'll talk a little bit about that. Just to take it back to kind of the financial aid system itself, depending on the student's financial circumstances, which state they live in, and most importantly, how much tolerance they or their parents have for filling out government forms. Great number of students will never actually pay out of their own pocket anything close to the official published price from the college. So let's look at our public universities. In California, we have a very generous state -funded system of financial aid called the Cal Grant program. If a student applies for and they're eligible for a Cal Grant, and this is an entitlement program, which means the state doesn't say, oh, we're only going to give out X number of Cal Grants each year. And then after that, if you apply after we run out, it's first come, first serve. We're done. No more Cal Grads. No. Every student who applies and qualifies is guaranteed a Cal grant, regardless of whether or not the state set aside that much money. They just make it up the next year in the budget. That's how an entitlement works. California, students who go to a UC or a Cal State, so those are our public universities, and get a Cal Grant will have 100 % of their tuition and their mandatory campus fees covered by that grant. So I looked up the numbers. It was about 270 ,000 students last year, or more than 40 % combined of all the undergraduate students at those two systems, the UC and the Cal State. Got a Cal Grant and therefore we're not on the hook for their tuition at all. Actually, just as a point of pride of bragging, we have a similar financial aid system in place for our community colleges. We're already the lowest tuition system of higher education anywhere in the country. It's about $1 ,500 a year for a full -time student and about half of all of our students, we do waive their tuition through a state -funded program because they're low -income students.

0:16:39 David: These are just the state financial aid programs, but another complicating factor, this gets to the question you asked about UOP and why they do that, is that a lot of four -year universities, public and private, practice something called tuition discounting, which is essentially a kind of Robin Hood type form of subsidy where they charge students from families that can afford to pay full freight, they pay full then the college, they actually take in more than the cost from those students and they use those excess revenues to subsidize the financial aid for lower income students. So you've got This is predominantly within the UC system and at private universities. You have this small minority of students from pretty well -off backgrounds who they or their parents are cutting a check for the full cost of tuition, and the majority of students who are benefiting from the ability to pay of the wealthier students because they're paying significantly less. Rich students are paying more to subsidize poorer students, which I'm personally fine with.

0:17:51 David: Yeah. But just to give you an idea of how much that amounts to, last year at the nation's private colleges and universities, tuition discounting amounted to 57 % of average tuition price, which means that institutions are essentially foregoing 57 cents of every dollar of that published tuition price. That's how much they are relying.

0:17:50 Thomas: Sounds good yeah yeah

0:18:21 David: I will you that I wrote down in my notes you allow for strong language in your podcast, but I wrote down in my notes, the first thing I wrote was the economics of higher education is completely fucked. In the sense that we think of it like we think most other products or systems where somebody pays a fee for a service. Published fees are way out of alignment with the actual fees most students pay and the revenues that come in are way out of alignment with what the colleges need. Just to actually introduce one more annoying, complicating factor in all of this.

0:18:22 Thomas: You wrote down fuck yeah clown college oh no sorry

0:19:00 David: Clown college. I have actually been to the town. I didn't go to the college, but I've been to town that hosts the nation's most prestigious circus college. It is called Brattleboro, Vermont. And let me tell you, the locals are very proud of that college. Think it's a little goofy myself. Ha ha. But no,

0:19:17 Thomas: Not a clown he's a dog you idiot now you have no credibility anyway

0:19:24 David: I know. Absolutely not. Yeah. Nobody's going to believe it. The clown college guy. Right. Yeah, so actually, somewhat contrary to the prevailing narrative, the growth in college costs has slowed down a lot in the last decade or so.

0:19:27 Thomas: To real content huh

0:19:39 David: The real sort of escalation that...

0:19:39 Thomas: Did they run out of numbers like I yeah at a certain point

0:19:44 David: That's what it was. They're like, yeah, we're just putting infinity into the damn thing, right? No, I mean, it really started to blow up in the late 70s and early 80s. That is when you saw the thing we talked about last time where the oil shocks, the recessions and all that, a lot of states were starting to get less revenue because of the recession. And so they figured, hey, one way that we can save money is by reducing spending on our public higher education because they can just make it up by charging. Students more, right? They can just raise tuition and make up the revenues and that's fine. The last decade though, so that was primarily a phenomenon from like maybe 1970 to about 2015. Since about 2015, at least at the public universities, adjusted for inflation tuition has fallen slightly, which is really remarkable. Don't have a clear answer for why that is.

0:20:34 Thomas: The time period again of that calculation could it be uh because I'm trying to think how the calculations work could it because of inflation on product just the stuff they use to calculate inflation is usually you know meat eggs groceries textiles whatever could it be that that went up so much because of covid and now and iran and all that that that yeah

0:20:35 David: Roughly 2015 to now, sure. That relative to that, the tuition cost doesn't look as... Yeah, I think there's probably a factor to a certain extent. Have to ask an economist, and like I always...

0:21:05 Thomas: That's a complicated economist thing actually because it's like I still don't know there's a lot of different ways to look at those numbers like if you really dig into it um another way to look out it might be uh relative to like wages you know because that's the thing you might use to go to college and also you know maybe earn more of so So it's a complicated thing, but okay. But it has gone maybe, you're saying it's gone down or it hasn't risen as fast?

0:21:28 David: It's gone down in inflation adjusted by about 7 % since 2015, the nationwide sort of average for a public college or university. To be fair, we have not had, obviously there was COVID, but that was kind of an economic shock of a different sort. We haven't had just sort of like a plain recession. I hate to say plain recession, but the big cuts that we saw from the 70s on were almost always in the wake of a major economic recession where states were looking for ways to cut corners. And higher ed was one area they looked to because they said, hey, they'll just make it up by charging more tuition. We really haven't had that. We had kind of a brief little shock after 2020, but then even in California, in part because, you know, so many folks were staying home, all that, like our state budget has grown significantly since then. So whatever the reasons. It's just a slightly complicating factor to note that at least that growth is not like a consistent upward pointing arrow. It's kind of, you know, maybe plateaued or narrowed out a little bit since then. Though, it's important to note, again, I'm always harping on this as the bleeding heart guy in my office, that States which are the primary entities that fund public higher education are spending less now than they did before, say, the Reagan era. So 1980, the net tuition that students pay made up about 21 % of all public college and university revenues. So for every $5 in revenue a public university got, students were responsible for $1. That amount has more than doubled and hit a high of about 48 % in the 2010s. It's gone back down to about 40 % now. So as of right now, the latest kind of reliable number is that roughly four out of every $10 in revenues the average public university gets comes from students in the form of tuition, with the other six coming from states or subsidies, whatever. Again, the student share has roughly doubled. From looking at now compared to 50 or so years ago. Big, big shock was the Great Recession. And of the things that I am always curious to know is just whether or not our history books, to the extent that we still have history books in schools in the future, whether or they will capture the magnitude of the impact of the Great recession on our society. Was so significant in terms of the austerity measures that states and local governments had to implement that You know, a person might look at like pre -2008 state government or pre - 2008 local government and think that we used to be like a full -on socialist society with all the things that we use to fund and how much revenues, you know, your city or county or state used to collect for things like college, K -12 schools, parks, libraries, all that. Give you a sense of what it meant to public universities, the student share of public university revenues in 2008 was 36%. Five years later, it went up to 48%. That's where it peaked. And again, dropped a little bit since to the 40 % I talked about. But that was just a big, big shock in terms of the economics of public higher education.

0:24:57 David: You probably want to know about what the data says and what people have concluded is the drivers of these costs, and that's where I am going to regrettably bring up Milton Friedman, because he did actually say one useful thing in that I still do go to, which an economics professor of mine summarized by using the classic example of the hotel with free HBO. Right? So we've all driven past the motel that says free HBO, right?

0:25:27 Thomas: No, because some of us aren't 80, but yeah.

0:25:29 David: Yeah, right. Yeah. Well, maybe one of our kids, we remember driving back. That's free HBO. HBO is a for -profit corporation. Are they giving their service for free to motels across America? No. The hotel just builds it into the cost of the room, right?. This is the free lunch thing. When Milton Friedman said there's no such thing as a free lunch, he meant like So it's important. To distinguish, what I've been saying throughout this entire 26 -odd minutes we've been talking about cost is really, I should have been using the term price, right? Because there's a difference between the cost of something and the price of something, as we all know, right. So I think the real question that you and maybe your listeners who loved our previous episodes want to know is, has the actual cost of Providing a college education, like the cost of running a college or university, increased over the years, accounting for inflation. And the answer is still more or less yes, it has, right? It's not just that colleges are getting too few dollars on the revenue side of the ledger. Mr. Business School, ledger is a term, right? I don't know if colleges still use ledgers,

0:26:56 David: But they all have accounting departments, right. It's not just a matter of they're not bringing in enough revenues. It is a matter that, to a large extent, colleges and universities these days do a lot more than they used to, right, and we'll talk about why some of that is. You will hear criticism from some quarters that a lot of this is due to what's called administrative bloat. Right. Colleges kind of hiring these.

0:27:21 Thomas: Which has always seemed kind of right to me based on what I've, you know. Well,

0:27:26 David: Well, that's a factor, right? The idea that colleges are making up these sort of executive level positions and hiring people.

0:27:33 Thomas: Yeah. And especially combined with the fact that they're doing other things that cut costs a lot, like there's no jobs, you know, because they hire more, you know, visiting professors, whatever it is, they're not doing.

0:27:45 David: Part time faculty.

0:27:46 Thomas: So like, it feels like what at the same time as the price is going up the it seems like Like, they're doing things that would reduce costs, and yet somehow you're still telling me that ratio is, you know, staying the same or something.

0:28:02 David: That absolutely is true, though, that colleges have shifted to a large extent. We now have far more what we call adjunct or part -time faculty at

0:28:11 Thomas: That was the word I was looking for. Yeah, I joked.

0:28:12 David: Basically all levels of higher education, too. I mean, that's true as far as I know in the private college sector. It's definitely true at the public universities. And it's also true at community colleges, which admittedly operate something of a different model, right? Community colleges have a lot of kind of specialty. Part -time one -off classes and programs. But yes, it's absolutely true that colleges are relying much, much more on lesser paid part -time faculty that often don't get the same level of benefits, if they get any benefits at all. And the administrative load thing is valid. There's not a ton of super reliable research on that, but I can tell you for a fact that anybody listening to this can go look up their local public university and see a lot of names on the org chart of like vice presidents. It's usually like the vice president level with long titles.

0:29:03 Thomas: Plus, they got people called, like, provost and crap. Like, what? Like, that's a real job.

0:29:08 David: Well, my academic friends will want me to clarify that provost is a real job because the president is basically the CEO of the entire college. They're responsible for everything. And yeah, horrible, horrible stuff. Vice chancellors. Actually, fun fact in Britain, I would be something of a big deal because in Britain every university has a chancellor, but it's always like a local celebrity or philanthropist or somebody. It's totally a figurehead job. The chancellor of like Oxford University or Cambridge University doesn't do anything but show up to like ribbon cutting ceremonies. And the vice chancellor is actually the one that runs the university. Thankfully, we're not in Britain and I don't have that level of responsibility. I will say, just because my, again, if anybody's listening to this, provost is a real job. That's the person who's in charge of all the academic functions at the college, right? In the community

0:29:18 Thomas: Like, vice chancellor, all kinds of stuff.

0:30:03 David: Colleges, we call that like in community colleges, we call that the vice president of instruction. So typically you have a president, you have the vice -president of instruction, a vice - president of student services, and then maybe a vice president administration, like the business services, the HR, the keeping the lights on and all that. But again, most colleges these days go way, way beyond that. If you look at the exec team, you will see vice presidents with really long Complicated titles. And I have to tell you, there is a joke among some faculty that I've talked to or saying, I should say, not really a joke, that the longer and more elaborate a person's title is, the less they actually do. I don't know if that's

0:30:03 Thomas: That sounds like a big job. Yeah.

0:30:42 David: True, but I certainly know that like the simplest titles tend to be things like instructor. President, Dean. Those are people who have pretty real and pretty verifiable job. I should say, and I did pull this up, I compiled this. This is just a sampling. I'll try and say it all. A single sentence of a list of functions that colleges and universities pretty much all have to do today, but for most of the part did not exist or weren't a priority back in the day. Let's say 50 years ago or so, you would not have seen most of these being functions or major functions on a college campus. Cybersecurity, disability accommodations, Title IX, federal grant compliance, assessment and accreditation, institutional research. Financial aid administration, counseling and mental health services, career services, supports for international students, advising, retention programs, technology infrastructure, online learning systems, student conduct, research compliance, emergency management, fundraising, communications, enrollment management, legal affairs, more elaborate HR and finance functions. I'm not saying these are all Brand new or novel positions, right? Some of these were around and always have been around. Most major universities have always had attorneys, for instance. But they probably have a lot more now.

0:32:01 David: We're a more litigious society. They probably have more now than they did 50 or 100 years ago, right. Cybersecurity. I'm just going to use that as an example because I have experience in that. That's a huge function of colleges and universities today. Colleges and universities around the country get hit with ransomware attacks all the There's probably at least one attack or attempted attack somewhere in the country every single day.

0:32:24 Thomas: That happens a lot and it doesn't make news all the time but like I you know I know somebody who's works for a major corporation that happened to and they just paid you know and it's like they they get away with it there's not like often there's Not really anything they can do

0:32:36 David: Oftentimes they do. I will say, and I'm not as familiar with all the specifics of the infrastructure or how that stuff works out, but I also just say, as somebody who works for a system of colleges that have suffered these attacks, there are valid security reasons why we don't always advertise it, right? We don't want everybody to know which ones are more vulnerable, et cetera. But another thing is a lot of roles and offices you see on campus these days are in response to federal or state mandates, right? So disability accommodations. Before 1990, there was no Americans with Disabilities Act. I'd like to think that some colleges and universities were still providing accommodations for students with disabilities, but we all know that it was because it was mandated, and now they have to have those accommodations in place, that that's a reason why there's been a big growth in spending on things like disability accommodations, which I'm, again, totally okay with, and I think it's great. In California, it's required by law that all of our public colleges and

0:32:53 Thomas: Sure yeah mind virus director yeah ah

0:33:40 David: The -woke crowd is going to love this. To support veterans, student veterans, right? Because things like GI Bill benefits are very complicated. Like specialized mental health services for veterans who might be experiencing PTSD, right. And so every college and university, public anyway in California, has to have on staff at least one and probably the larger ones have more than one dedicated veterans resource officer. Similarly for former foster youth, right? The legislature has just passed all these bills saying your college has to have at least one full -time person. They can't, it can't just be like added to somebody else's duties, right. Somebody else was already overworked and tired and underpaid. And by the way, now you're the veterans resource officer. It has to be a dedicated full - time position, right, so I will say this. I don't have a ton of detail or data to up the exact numbers on this question of administrative bloat. A real concern, it's a valid question, and certainly people pissed off about the number of executive -level positions on college campuses with the vice president titles who make six -figure salaries, but I don t think that would explain away in and of itself a 350%. Inflation adjusted increase, you know, intuition, right? That's a lot. Can't really just explain that by saying colleges started hiring a bunch of well -paid executives for these made up jobs or colleges started doing a bunch stuff that's really kind of peripheral or not relevant to students' education because they wanted to. Guess if I could explain one thing to the average person who doesn't interface with colleges or higher education, I would say Most things your local community college or public university is doing, they're doing because there's a law that requires them to do those things or because they're getting funding from the federal or state government that they only get if they do those. There's not a whole lot of super optional things that, you know, colleges and universities get to do these days just for the fun of it. One of which though, That has come up a lot and that I know is again, occasionally controversial issue has to do with what I guess is called, I had not learned this term until I started doing this research, the amenities arms race. Basically, Names and terms that appear.

0:36:04 David: Names One of the ways, I should say, in which they compete for students to get students interested in applying to those colleges is by offering more and more on -campus amenities. So here's where we hear about things like the campuses with the rock climbing walls, the fancy new gyms. There's at least one college somewhere in the country, and I'm sorry I didn't have time to look up who, that actually got a lot of controversy and headlines for installing a lazy river on campus for students.

0:36:37 Thomas: Sounds really nice actually I

0:36:40 David: I would have loved to have that when I was in college, right?

0:36:40 Thomas: I and I doubt that's like that expensive that might be one of the better ones you know actually I that one I like that well

0:36:48 David: Again, part of this sort of swirl of effects, right, is this amenities arms race. Here locally, the president of Sac State, Luke Wood, he's gotten some flack for how much he's emphasized athletics and spending on the university's athletics programs. They're building a new football stadium, funded largely with student fees and public revenues, something a lot of colleges have gone through. Wood and other people, other college presidents who have done this will say, again, I got to get more tuition paying students to campus. And one of the ways to do that is by having this nice fancy new gym or this nice, fancy new football stadium and a competitive football team, right? Not here to answer that question, yay or nay, but I will tell you that this question of quote unquote, the amenities arms race has come up a lot in discussions. Again, I agree with you. Don't think you can explain away much of a 350 % tuition increase by just saying colleges are installing lazy rivers in new gyms.

0:37:45 Thomas: I'm yeah it really depends on what it is I guess but maybe a combination of all these things together I guess this may be where we're getting hmm

0:37:52 David: I mean, my general takeaway here is that there few big driving factors, and I don't think they get you, you can probably tell from our last conversation, I don t think these get communicated very well in the mainstream media. One thing that I m always going to mention, states, which are the main funders of public colleges and universities at least, Have overall reduced the amount of money. Again, that's sort of tapered off in recent years, but compared to say 50 years ago, they've reduced the money that they spend on public higher education, which has forced public colleges and universities to raise tuition to make up the revenue. The federal government, so on top of that, the second factor, federal government starting with the Reagan administration has increasingly let financial aid sort of not keep up with inflation. So I talked last time about how the Pell Grant, which is the main Federal source of grant aid for students in the United States that used to cover about 75 % of the total cost of attendance at your average college and now covers about 30%. So that has not kept up with inflation. That's increased the net price or the sticker shock to families and students. So that's a lot of the reason driving the perception that college costs have really gone up. Then you have to add in this factor that both the federal government and state governments now require that College and universities, including some private universities as well. I will say like the ADA, that applies to private universities. They're requiring them to do more things, things that universities didn't do or didn't emphasize or weren't responsible for 50 plus years ago, from your disability accommodations, your dedicated centers for veterans and foster youth. In California, we have dedicated centers

0:39:31 David: Which I think is wonderful. That increases the actual bottom line cost of running those colleges. They got to hire more staff. They've got to find space for those people. And then that kind of brings me to one last thing, which I think, is underrated as a driver of college costs, which is the physical infrastructure cost, right? Like people need to remember. Colleges are large campuses made up of typically hundreds of discrete individual buildings, each of which, you know, most of which has their own plumbing and HVAC systems, you I don't think this is a minor element. I don't think it's necessarily a major driver. Infrastructure cost, but I think it's at least a moderate one for colleges, which is it just costs more to physically maintain a college or university than it did back in the day. Can tell you from my job that unprompted, it is one of the things that community college presidents bring up the most. You know, when we visit community college campuses up and down the state, we'll just sort of ask them open -ended, what are you struggling with right now? What are your challenges? How could the state help you? And one of the top three, I would say, is almost always, we call it deferred maintenance, which is basically colleges have these long backlogs. They're like, this building needs the plumbing repaired. This building needs asbestos removed, right? This building

0:41:10 David: Means the lead paint covered up. I think we maybe got all the lead pain, but you would hope.

0:41:10 Thomas: I hope so yeah right

0:41:16 David: That's another cost too. If you wouldn't mind, there is one other one that I didn't include in my notes that is more of a perception thing. But this is important too, right? Because how we talk about things defines, is the narrative. It doesn't define the narrative, it is the low-income students who for the most part are able to finance their college costs with minimal to no loan debt using a combination of grants and scholarships and maybe some part -time work, the classic, you know, flipping burgers or whatever during the summer. It's primarily built for low -income class students who are probably on the lower end of what I'd say middle class. Further into middle class you get, the less financial aid there tends to be available. And, you know, you think about like a family making, I it, the average American doesn't have that much sympathy for like a couple making $400 ,000, $500 ,000 a year. That's way more than the average Names and terms that appear.

0:42:31 David: All of our financial aid programs have income cutoffs well before you start getting into like that amount. So there's very little in the way of like federal grants or even oftentimes loans that students from what I'll call like upper -ish middle -income families can get. Are the people that are often writing the check and sure I get it you know if you're making Names and terms that appear.

0:43:25 David: Names talk a lot about college costs are probably from that upper middle to sort of lower rich class where they're not getting a lot of financial aid for their kid, but it's still a big, big bite for them to have to write a big check. It's a way bigger deal for somebody who makes even a million dollars a year. To have to write a check for $30 ,000 for their kid's tuition than it is for a billionaire, right? Bezos, Musk, I don't even know what college Elon Musk is going to send his 14 damn kids to or whatever.

0:43:59 Thomas: Doubt he'll have much to do with it

0:44:01 David: True, yeah. But if he does, he'll probably send them to like Bari Weiss's fake college in Austin, Texas. But, you know, that person is not a person who's really going to care about college costs, if you just think about it. But again, Collinses, your Jake Tappers, I'm not calling them out specifically, one, because I don't watch them enough to know if they talk about this, but two, those are the people that I think you often hear amplifying this issue a lot in the media.

0:44:26 Thomas: So you're saying like the media class the journalism class has certain things that are more um to them yeah salient to them I think it's the same reason we just talk about college more than we should I don't think it is as important as you know especially when one our main thing is all the, the craziness stories. I think that's the, and there's such an incentive. I Think we really run into trouble when this incentive is on both sides. And that, I think, that happens so often. So the right wants to demonize college and the left maybe has, you know, a bit of this effect where if they're better off, if they are, you part of that, group uh, of people you're talking about who are going to be feeling the the effects of this bigger tuition. I mean, all it takes is like some, all of one side is doing something and some of the other side, it's like that gives you a super majority pretty quickly.

0:44:32 David: Salient. Yeah. Yeah, yeah, absolutely. Right. That Yeah, absolutely. I think you're absolutely right about that calculation. Yeah, it's very much an issue where it seems to have outsized influence in our culture and our communications. Still at a point, I think the number is growing, but we're still at a point where a super majority of adult Americans do not have a bachelor's degree. Somewhere between maybe 35 % and 40 % of American adults.

0:45:34 David: And then you think about grad school and all of this sort of stuff about grad of all sorts of things like campus culture, protest, all that, it seems to just occupy this outsized space in our public discourse, doesn't it?

0:45:35 Thomas: So in the end, you don't think it's up as much as people are talking about it?

0:46:19 David: I think, like I said, a disclaimer, the economics of higher education is totally fucked in this country. Of those things where I'd like to think of some public policy problems the way Barack Obama described. Healthcare. Which is, I remember him saying, like, would like a single payer system too. If you remember, Barack Obama came out and said very clearly that he believed the best system, if we were building our healthcare system from scratch, would be single payer. But his sort of pragmatic reason for not going in that direction, agree or disagree, was we just don't have that system now and getting there from where we are now would be so complex. I have to work with what we have.

0:46:55 Thomas: Well, yeah. Also, it was, we had zero senators to spare, and I'm pretty sure one of, one or two of them killed it. Didn't, it's, what's his name? Lieberman. Yeah, that's, yeah, Lieberman killed it, I think.

0:47:04 David: Lieberman, Joe Lieberman did. Yeah, I mean, they wouldn't even let Obama and that team include a public option in the Affordable Care Act, right? So, but point being, and I like to apply this to a lot of public policy problems. The economics of higher education would not look anything like it does today if we were like building a society from scratch, right?

0:47:25 David: And we were, like, hey, we got to have some sort of system of higher -education for people to go after high school. What do they do? What type of job do they want? What do want to learn about? What sort of degrees are we going to have? It would be so different than what we have now. In particular, I think this issue of the sticker price being so radically different than what most people actually pay. But in order to get there, you have to jump through so many hoops. You have to know a lot about your finances. You've got a lot of paperwork about your You have to fill out the federal forms, you have to be ready to appeal if you're denied, spend hours on hold waiting for a government bureaucrat to answer the phone, answer your questions. Of that sort of swirls together that I think creates this perception that here's what I would say in response to your question. Do think college costs are a big deal and they've clearly gone up. Don't think the perception that they are spiraling or have spiraled out of control is accurate. Gone up pretty significantly, they've gone pretty steadily, and there are options and ways for people who would struggle with the financing to find ways to cover it for the most part. A lot of people, including a lot people with powerful voices, aren't covered by those options. And again, it's not always clear what the money is going towards. And that's an issue that I think if you gunned to my head, told me there was one thing I had to find about this administration's higher ed policy that I agree with them on, it would be that they're trying to sort of Find federal levels for federal levers, excuse me, to create more transparency around college costs and what why college costs, what it does. They want basically kind of more colleges to open up their books, so to speak, and justify those prices. And I think that would be a good thing for everyone.

0:47:25 Thomas: Sure. Yeah mm -hmm. Yeah yes,

0:49:15 David: People should know people shouldn't have to listen to a nearly hour long podcast between But you see what I'm saying. It should be clear why costs have gone up, what they're paying for, and how students and families can pay for it. That, I think, is completely reasonable and potentially decent that this administration is going after when it comes to college costs.

0:49:41 Thomas: They do. Sure. Okay.

0:49:44 David: I mean, I don't want to give them too much.

0:49:44 Thomas: I guess we'll give it to them. Yeah

0:49:46 David: Yeah, yeah, yeah. I don' t want to get too much credit about that or anything. But I mean you know again that that is one of those like valid concerns. I mean my own tuition when I was a Sac State student went up something like 30 to 50 percent in just a couple of years I was there. And like even if they literally sent like a letter to all students like a one -page letter saying hey y 'all Sorry, but tuition's going up this year. Here's why. Here is a short little table that shows where we've seen some cost increases and, you driving those costs. Could do that. They could do, right? Even if they wanted to put the blame on legislators and say, hey, the stupid state cut our funding again. If you don't like it, call your senator or whatever. Like fine, but. A lack of transparency and communication around college costs, and that to me is probably the more solvable problem.

0:50:35 Thomas: Again, coming back to you, I think what was your main point last time was what really matters is like how much aid people are getting from the state in a lot of this. And that's that's also like kind of the more important thing.

0:50:49 David: A lot of cases, yeah. Again, that's the net price, right? The price you're going to pay. Low or even low -middle or middle -income family in California, you're gonna get a significant share of your tuition covered by Federal and state financial aid. I've done these numbers before, but if you add together the maximum amount a student can get from the Pell Grant, maximum they can get the Cal Grant, and then you figure they're probably also getting the highest subsidized student loan they can, you're talking over $20 ,000 of aid per year for a public institution in California. And it can be more for private institutions in financial aid, so that is something that is important. It's not communicated very well. That's on people like me to communicate things like that a little better. Again, that goes back to this vicious cycle we have. That is why when I say the economics of higher education are fucked, I mean, you you have that issue with the rich students paying to subsidize the poor students and then the financial aid coming in to help out from the federal and state sources. I talk about if we built it from scratch, what I mean is we would rip all that apart. We would not have financial aid covering tuition. We would have tuition. I think we could go to a tuition -free model for public higher education for, I believe it's like less than 10 % of the cost of the annual military budget. Actually, with what Trump's trying to hike it to, it's about 5 % of cost of annual defense budget. We could just zero out tuition nationwide. And then say, okay, students who need a little extra subsistence money for books. Rent, whatever will have programs for those students. But the fact that we have this system where colleges have to post a higher tuition price than they actually need so that they can charge richer students more and then take a share of that and funnel that into financial aid for poorer students, even though the sticker price they all see is the same. Just it's a mess of a system. And I agree with that.

0:52:42 Thomas: Right. Well, thanks so much for the breakdown. Any closing thoughts? Anything else that folks should know?

0:52:47 David: You want a decent higher education system, stop voting for Republicans. Can I say that?

0:52:50 Thomas: That's always true. Yeah, that's if you're listening to this show, stop voting for reply. And more importantly, probably than that is make make sure you vote for the not Republican. I don't know how many like Republican voters I have listening, but I'm sure I have people listening who don't vote. Make sure you do.

0:53:06 David: Don't vote. Yeah, I do. I actually quite literally, here's where I'll close it. I have a shirt from a conference I went to maybe 10 or so years ago that was hosted by the sociologist I mentioned, Sarah Goldrick -Rab. And if any of your listeners are actually interested in like a really, really deep dive, like books and articles on this, I absolutely send over some stuff from her because she's brilliant. She's done so much great research on college costs. But I have Shirts do where they went from like a regular day t -shirt to a nighttime pajama shirt. On the back of it, it says, if you think college costs too much, vote. Close. And yeah, you're right vote for against the party that vote against Republicans.

0:53:48 Thomas: All right. Well, thanks so much, David. Appreciate it.

0:53:51 David: Of course. Thank you. And appreciate you taking the time to cover this topic.