Drivers of the Rising Price of a College Education
The problem of rising college tuition is nuanced and complex. Higher education is a service industry, and the cost history of services is quite different from the cost history of the rest of the economy. Most students attend non-profit colleges and universities, and non-profits have their own peculiar economic incentives.
Higher education is heavily subsidized, and this is an important factor in price-setting. Much of the public discussion of rising tuition oversimplifies these issues in favor of stories of virtue and vice within the academy. Yet the main drivers of rising college tuition are larger political and economic forces buffeting the entire economy.
This brief explores the forces that have affected college tuition over the postwar period, including college costs, general subsidies, and changes in the national distribution of income.
