College costs are rising faster than health care and most incomes, a rate of increase that cannot go on forever, experts in higher education warn.
Haley Glover, an Indiana associate commissioner for higher education, said if tuition continues to rise at the current rate, a typical college degree 15 years from now could cost $300,000.
"Things really do have to change," she said.
Colleges and universities across the state have been announcing their tuition increases for next year following the General Assembly's passage of a new budget, which includes funding for those schools.
The legislature provided no increase in higher education funding, and some schools said that meant they had to raise tuition to meet their own higher costs.
The increases at Ball State University and other Indiana schools have been more modest than those across the country, but tuition here is still rising faster than family incomes.
At Ball State, that's happening despite the university's best efforts to cut costs, Vice President for Business Affairs and Treasurer Randy Howard said.
Even as Ball State seeks to hold down expenses, it still must compete with other institutions - meaning it must increase payroll costs, for example, to attract the best faculty and staff.
Hoosiers consider a college education more important then ever - at the same time they are growing less confident that they will be able to afford it, according to a 2007 Indiana University study.
State appropriations in Indiana and across the country haven't increased at the same rate as higher education expenditures, leaving students to pick up the slack.
Howard said higher education is an investment, and families want a good return on their money.
"People will only go to a college or university if they find that there is value in the education," he said. "Typically the value of the education is in terms of increased earnings potential."
But some say rising college costs are built into the very structure of higher education.
Richard Vedder is an economist at Ohio University and author of the book, "Going Broke by Degree," which argues that college costs rise so quickly because much of higher education is shielded from the influence of normal market forces.
Their non-profit status means that many universities lack a key incentive found among companies seeking profits, Vedder said.
"In higher ed, there is no great incentive to cuts costs," he said.
State subsidies and financial aid actually make the problem worse by masking the real costs of education, the economist said.
Vedder said when someone other than the user is paying the bill, costs increase more quickly because the consumers don't see the entire bill.
"People that are paying a lot of the bills are not the same people that are using higher ed," he said.
Vedder emphasized that his remarks were about higher education in general, and not about Ball State.
The economist predicted tuition increases will slow down in the next decade.
"We are getting to the point where the public's willingness to pay these rapidly growing fees is waning," Vedder said. "People are starting to look to alternatives of certifying skills and excellence of persons who are eventually going to be entering the labor force."
Vedder said some people are getting angry enough to look for alternatives, including cheaper college tuition in other countries.
And part of the economic attraction of a college degree could diminish over time, he said. For example, companies might find other ways besides a degree to identify quality job candidates.
"The reason that college graduates make twice as much is because employers think college graduates are a little smarter," he said.
Demographics could also put pressure on tuition increases as the number of college-age students drops off in the next few years, Vedder said.
In the meantime, colleges and universities have their own bills to pay.
Rising tuition has attracted the attention of the Indiana Commission for Higher Education, which released a report last year on college affordability in Indiana.
Glover said the commission thinks student affordability is important for Indiana's future.
"We can't price ourselves out. We have to keep things affordable for students," she said.
The state panel set tuition and fee targets for the first time this year. Most universities, including Ball State, exceeded those recommendations.
Glover said the commission is required by law to set those targets. She emphasized that the schools may have a better feel for what their tuition should be relative to their expenses.
Glover said the commission encouraged schools to cut back and find other sources of revenue before looking to students to pay for the increases in costs the schools face.
Part of the thinking is that wages earned by many students' families have not grown as fast as inflation.
"In fact, we're seeing wages decrease," she said, adding that "an extremely modest tuition increase is appropriate."
She said that choices are made more difficult because personnel expenses make up most of college budgets - about 75 percent at Ball State.
"It's hard to talk about cuts," Glover said, "because you're talking about people and jobs."
Studies show that only slightly more than half of students at Indiana's four-year colleges graduate within six years.
"We need to do a better job of getting students out of college," Glover said. "We do a really good job of getting them in."
Glover said Indiana has a large four-year sector and a smaller two-year sector, adding that in most states the vast majority of students start at a two-year college and then move to a four-year institution. That system is considered more efficient because students and the state are paying less for the first two years.
This year the higher education commission recommended increases starting at zero.
Glover said the idea was to tell colleges, "In this year of all years, it might be appropriate for you to not raise your tuition. Of course that did not happen."
Read More
Three Air Jam teams take home the win
October 12, 2012Nineteen teams shimmied, shook and flipped for a sold out John R. Emens Auditorium on Thursday night during the 25th annual Air Jam.
Bill Clinton Speaks at North Central High School
October 12, 2012Former President's Speech Could Have Effect on State Senate Race
