According to the institute for college access and success, Greenville College students who graduated in 2015 had an average of $28,452 of student loan debt. While that number is not out of the ordinary for colleges in Illinois today, it is certainly a much larger number than it has been in the past.
A statistic CNN posted in 2002 stated, “In 1999-2000, 64 percent of students graduated with student loan debt; average student debt has nearly doubled during the last eight years to $16,928.” This rapid change in the cost of higher education has resulted in the frustration of students and confusion in the general public. Pundits have come out with various theories for this phenomenon, but they don’t all match up.
One article by the New York Times claims the hikes in tuition prices are caused by expansion of administrative staffing in colleges. Another article by usnews.com claims tuition prices are inflated by the costs involved with services unrelated to education. Andrew Kelly, director of the Center on Higher Education Reform at the conservative American Enterprise Institute, was quoted saying, “They’re competing on amenities: high-quality facilities, extracurricular activities, counseling services, diversity officers, high-tech computer labs, how nice their campuses look.” Do you use the annex to work out? Do you check out books from the library on a regular basis? Do you participate in sports? Regardless of how you answer those questions, those services are paid for as part of Greenville’s tuition.
I had the opportunity to speak with Greenville College Vice President of Finance and CFO, Timothy Dietz, to learn about the issue and some specifics behind how Greenville fits into this. During our conversation, I learned some of the statistics behind tuition increases are somewhat misleading because scholarships have been increasing as tuition costs have risen. The above statistics are still relevant, however; because they refer to the debt students have after completing college rather than the tuition students paid during those years. It’s a strategy similar to stores that constantly have sales going on. They price their products up so sale prices look like great deals. Dietz also told me tuition money is used mainly for the payment of staff and professors, funding athletic programs and funding student activities.
A core 401 group has been raising awareness for Greenville’s alumni donations recently through its “Give Big to the Pig” event, so I also asked about how alumni donations fed into Greenville’s budget. Dietz estimated that alumni donations could be roughly 2% of the college’s overall budget, and also told me those funds were used almost exclusively for the purpose of offering scholarships to students. He went on to say larger colleges often do receive a decent amount of money through donations due to their larger alumni bases, but that is just a tradeoff of being a smaller college.
Some pundits have theorized that increased aid to students from state and federal sources led to the increased tuition costs over time. The idea being, if students were more empowered to pay more for tuition, colleges could charge more. Dietz disagreed with this idea. “What those have done ultimately is increase the pool of students that can go to college. That in and of itself lends to increasing the cost to go to college.” He told me as more students came to a college, more faculty was hired to compensate, thereby making the effect relatively neutral as far as income for the college was concerned. He did go on to say it was dangerous for students to be reliant on state aid such as the MAP grant in order to get their educations, however. He was a strong supporter of students getting jobs during school (possibly through federal work study) as well as during the summer to help pay for their educations.
It is difficult to pinpoint what exactly has caused college tuition to increase so much in the past several decades. In my opinion, however, the most important influences are the increased number of amenities offered by colleges in combination with a pricing philosophy involving high tuition costs as well as large scholarships.