Comment by vitus
4 days ago
> Even state and especially UC have “invested” significantly in infrastructure improvements paid for with loans backed by expectations of tuition income, which has had an absurd effect on growing tuition far outside of inflation.
What timeframe are you looking at?
Back in 2011, registration fees at UC Berkeley were $7,230 per semester, with $813 allotted to health insurance (which could be waived if you provided proof of existing insurance from your family), so $6,417 ignoring health insurance. Meanwhile, last year, registration fees were an eye-popping $9,847 for new students, but cost of health insurance grew much faster to $1,929 ($7,918 ignoring health insurance). This is about a 23% increase, compared to CPI-measured inflation of about 35% between Sep 2011 and Sep 2023.
(The next biggest driver of the overall increase was the campus fee, which went from $253 to $820.)
Or, if you look at just tuition alone, that went from $5610 to $6261, or just barely above 10%.
https://registrar.berkeley.edu/wp-content/uploads/2021/03/Fe...
https://registrar.berkeley.edu/wp-content/uploads/fee_schedu...
If you look further back, in 1999, tuition was a mere $1543, but I posit that tuition at UCs has actually been fairly stable over the past decade.
Those are some cherry-picked numbers. Tuition went up A LOT just prior to your starting point, 2011, as the great financial crisis made renewing those loans I mention much more expensive: https://ucop.edu/operating-budget/_files/fees/201415/documen...
> Those are some cherry-picked numbers.
I don't disagree, but they support my point that tuition has not changed meaningfully in the past decade (and then some), which is why I asked what timeframe you were looking at.
Inflation is perhaps not a good point of reference anyways, since in 2009, inflation per CPI was actually slightly negative. Cost of borrowing is not the same as cost of goods and services or cost of labor, for reasons such as the ones you point out (changes to banking regulations, increased risk aversion, etc).
Although, I'm a little surprised that cost of borrowing would have been much higher, seeing as that was the start of the zero interest-rate policy in the US. The average 30-year fixed mortgage rate was hovering around 6-7% pre-crisis and 4-5% in the years immediately following it.
Perhaps some more generous explanations for the rapid tuition growth between 2000 and 2010:
- UC Merced was established in 2005, so I buy the argument on that point regarding investment in infrastructure.
- In 2009, the state's general funds accounted for $2.6 billion, compared to just under $3 billion in 2006. Student fees in that timeframe rose from $1.55 billion to $2 billion, tracking fairly closely with the corresponding shortfall in state funding. [0, 1] Yes, these numbers are also cherrypicked as a representative budget right before the GFC and shortly after, but they represent neither peak funding nor the overall sharpness of the budget cuts. So, I reject the claim that the tuition hikes in the aftermath of the GFC was due to increased borrowing costs for the UC system. I think a more mundane explanation is that the state had a budgetary shortfall due to less taxes being collected (income, property), and made cuts across the board; the UC system raised student fees to compensate.
https://thebottomline.as.ucsb.edu/2017/10/a-brief-history-of... provides an overview of how tuition at UCs evolved up through 2017, although it gets the state funding amounts off by 3 orders of magnitude (since the linked governor's budget is measured in thousands of dollars).
[0] UC's 2009 budget is outlined in slide 3 of https://www.ucop.edu/operating-budget/_files/documents/2010-...
[1] UC's 2006 budget is outlined in slide 9 of https://www.ucop.edu/operating-budget/_files/rbudget/200607-...