The Wall Street Journal has argued since since the late 1990s (sorry, the WSJ hides its light under a pay wall) that universities are able to raise tuition because the government gives students loans to pay that tuition. Universities, in an attempt to lure students, build “Club-med style amenities,” like climbing walls. But are these the drivers of the massive increases in tuition that students and their families are now expected to bear?
Not necessarily. The New York Fed points out that, since the 1980s, state subsidy for higher education has steadily decreased. Between 2000 and 2010, state funding decreased by 21%. The economics of this are relatively simple, even for a lawyer like me: In the face of declining state subsidy, public colleges raise tuition to cover costs.
For more information, check out these reports by the Center on Budget and Policy Priorities and the American Institute for Research. And the situation may not improve anytime soon. The American Institute for Research reports that the amount that tuition has been raised is not enough to make up for the gap in state funding.