Higher Ed Spending Problem Demands Attention No Matter Court’s Opinion
Jul 2023

Higher Ed Spending Problem Demands Attention No Matter Court’s Opinion

This piece was coauthored with Scott Pulsipher, president of Western Governors University.

With the Supreme Court expected to announce its ruling on the legality of President Biden’s student loan forgiveness plan tomorrow, debates around who should pay for the country’s crippling level of student debt—amounting to more than $1.7 trillion—continue to flood the national discourse. What’s less discussed, however, is how we got here in the first place, and what would need to change to avoid imposing immense financial hardship on yet another generation.

Policy analysts can point to shifts in state funding, government subsidies, and myriad other reasons for the escalating price of college, but this issue is fundamentally one of costs—the overall expenditures associated with delivering the educational experience—not price. Higher ed has long been on an unsustainable cost trajectory, and everyone—students, the government, society—bears that cost.

Looking at graphs of the rising costs of college is like watching a snowball gain size as it rolls downhill. In 1970, for example, public colleges and universities spent nearly $104 billion in today’s dollars. That number rose to $190 billion by 1990; $296 billion by 2010; and a whopping $420 billion by 2020.

Altogether, post-secondary institutions now spend more than $670 billion per year—yet interestingly, four-year public and other private nonprofit colleges devote just one third of their total spending on course delivery and instruction. This raises the question: what is driving the rest of this spending? And what tradeoffs are needed now to bend the arc of the cost curve?


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