![]() ![]() These families “don’t have any trouble writing that check,” and are willing to spend more in exchange for luxe services and well-maintained campuses. ![]() “Flagship schools are competing for talented students and families that can pay the sticker price,” said Hill. That means a top-ranked university can charge whatever it wants and will still find wealthy families willing and able to pay each year. The top 1% of earners in the United States now takes home 21% of all the income in the United States, according to the Economic Policy Institute. In 2021, the top 10% of Americans held nearly 70% of US wealth, up from about 61% at the end of 1989, according to the Council on Foreign Relations. ![]() Income inequality in the United States has grown significantly since the 1970s, and there’s a much wider gap between the rich and the average income earner today than there was back then. Nearly 70% of US faculty members held a contingent position in fall 2021, up from 47% in 1987.Ĭompetition for the richest families is driving up costs The higher education system has become increasingly dependent on this temporary labor, according to the National Education Association. Some universities have been leaning more heavily on contingent, non-tenure track faculty with low pay and no access to employer-ee benefits in an attempt to save money. “That means that there haven’t been efficiency gains to reduce that cost.” “We pretty much produce higher education the way we used to, which is a faculty member in front of a class of anywhere from 20 to 40 students,” said Hill. You still need professors with expensive degrees to do that. Real wages for US skilled workers have outpaced inflation by a couple of percentage points for long periods of time, but other industries have been able to offset those labor costs through productivity advances that reduce their reliance on skilled labor - things like AI and robotics.īut there aren’t many robots teaching college classes. “Their price in the economy has gone up.” “Higher education is primarily produced by skilled workers - faculty and administrators,” she said. It costs a lot to employ professors, said Catharine Hill, an economist with the education nonprofit organization Ithaka S&R and the former president of Vassar College. ![]() So why is the price of college rising so rapidly? “While Gallup did not probe for reasons behind the recent drop in confidence, the rising costs of postsecondary education likely play a significant role,” said Megan Brenan, a research consultant at Gallup. The June poll found that just 36% of Americans have confidence in higher education, down more than 20 percentage points from eight years ago. That might explain why Americans’ confidence in higher education has dropped to a record low, according to a Gallup poll released this week. Over the same 40-year period, earnings for workers ages 22 to 27 only increased by 19%, the report found. After adjusting for currency inflation, college tuition has increased 747.8% since 1963, the Education Data Initiative found.Īnd between 19, the average price of tuition, fees, room and board for an undergraduate degree increased by 169%, according to a report from the Georgetown University Center on Education and the Workforce. Harvard University stands in Cambridge, Massachusetts, on July 6, 2023. ![]()
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