What's behind soaring college costs?

• Author: Kielser, Charles A.

As the price of student aid, administration, salaries, research, maintenance, and technology climb, the cost of higher education mounts inexorably.

American higher education is under fire. The public's overriding concern is the rising cost of tuition. This issue and others regarding the future of the nation's system of higher education must be addressed if American institutions are to retain the confidence of the citizenry and maintain a level of excellence vital to the nation's future.

To address questions regarding such issues as tuition adequately, it is imperative to understand the true costs with which colleges and universities must contend, particularly the major research institutions that face unusually complex financial challenges. The standards of measure currently are inadequate and ultimately will lead colleges and universities astray.

The most frequently asked question regarding tuition is: why is it rising faster than the Consumer Price Index (CPI)? Actually, the CPI is not relevant to higher education; rather, the Higher Education Price Index (HEPI) is. Yet, even the HEPI does not measure the big-ticket items that keep college administrators awake at night. A few of these financial cross pressures include:

Need-based student aid. University dollars spent on need-based aid have been going up dramatically in the last few years. At Vanderbilt University, where I was provost until November, 1992, need-based aid more than tripled in a period of eight years (from $3,800,000 to $14,000,000). As tuition goes up, need-based aid does as well. The latter also is calculated on the "total cost of attendance," including such non-educational charges as visits home, spending money, and the like. Increases in the cost of food, housing, books, or plane fare home directly affect financial need and, therefore, need-based aid. Even if tuition were constant, university funds spent on need-based aid would increase substantially. Vanderbilt projected that, if tuition were held constant for five years, need-based aid still would rise 50%.

Diversity. As U.S. demographics change dramatically over the next 20 years, the economic health of the nation depends partly upon colleges' and universities' ability to educate an increasingly mixed population. Minorities tend to be less often affluent, and more aid obviously is necessary to try to increase diversity in the university classroom. This really should be the responsibility of the broader society, both...