America's colleges and universities are the best in the world. They
are also the most expensive. Tuition has risen faster than the rate
of inflation for the past thirty years. There is no indication that
this trend will abate.
Ronald G. Ehrenberg explores the causes of this tuition
inflation, drawing on his many years as a teacher and researcher of
the economics of higher education and as a senior administrator at
Cornell University. Using incidents and examples from his own
experience, he discusses a wide range of topics including endowment
policies, admissions and financial aid policies, the funding of
research, tenure and the end of mandatory retirement, information
technology, libraries and distance learning, student housing, and
intercollegiate athletics.
He shows that colleges and universities, having multiple,
relatively independent constituencies, suffer from ineffective
central control of their costs. And in a fascinating analysis of
their response to the ratings published by magazines such as "U.S.
News & World Report," he shows how they engage in a
dysfunctional competition for students.
In the short run, colleges and universities have little need to
worry about rising tuitions, since the number of qualified students
applying for entrance is rising even faster. But in the long run,
it is not at all clear that the increases can be sustained.
Ehrenberg concludes by proposing a set of policies to slow the
institutions' rising tuitions without damaging their quality.
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