Richard Vedder explains why...
I will admit to having very much enjoyed my undergraduate experience. The college I attended was very small, having fewer than 1200 students, and an exorbitantly high endowment. The students there were coddled every step of the way and there were arguably more landscape workers than students. Access to professors was a given, as the classes were so small, it was common for teachers to become surrogate parents to some of their pupils. The gym facilities were plentiful, classical concerts were free and fancily catered, and the 9-hole golf course served as the community country club for the surrounding town.
Thinking back on that time, I am now aware that I was a beneficiary of distorted system of school finance that affected different classes of students unjustly. The tuition was 3 times higher than the premier state university, and the majority of students on that campus were on some form of financial aid. Who was paying full tuition? It turns out that a minority of students do pay the maximum price, an amount set by the university not only to pay for rising expenditures, but also to milk their customers at as high a ceiling as possible. This practice is based upon the idea that the rich students partially subsidize the poorer students, in which "poor" means middle class students who cannot afford full tuition. It's similar to the way healthcare reimbursements are done in the U.S. Doctors set the price of their services high so that they can be assured a minimum amount of direct revenue once all the other expenses in filing with insurance companies, medi-care, and the expected reduction of the negotiated price take their hefty cut. The university system in our country is by its nature very competitive, but it works as a highly distorted free market, much like the U.S. healthcare system. Just as government programs fund about 40 percent of medical costs in the country, government-backed sudent loans and grants provide such a windfall to the college coffers that they are able to progressively raise their tuition rates for as much as government aid will allow.
And where does all this tuition money go? To superstar professors, to fancy new buildings, to fancier lawcare, and to the hiring of non-educational staff like diversity counselors and assistant football coaches. Fancy dorms, which are looking more like condominiums than the traditional barrack, and large recreation centers seem to be the new priority for colleges more than ensuring that the educational quality rises. There are many aspects of attending college in America that I feel fortunate about, and I wouldn't trade my experiences for anything else. But when the pace in which college tuitions rise three times as fast as the general rate of inflation every year, then it's apparent that there are too many inefficiencies and corrupted priorities in our colleges. Academics come first, and it is only fair that the students who foot other's bill get their money's worth.