Rising Costs of Higher Education - Research Paper Example

Introduction The cost of higher education has been rising as time goes by and if the trend continues, higher education might prove inaccessible to many citizens. In the old days, early education was viewed as a public good and not as a benefit to the individual who received it. The trends have today changed where higher education is seen in terms of the benefits it will give to the individual other than the good that it can bring to the general public. One of the factors that have contributed to the rising costs of higher education is the issue of government sponsorship and other third-party providers who fund students pursuing higher education. The assistance has led to an increase in demand for higher education and the students have greatly enrolled for courses in the universities. The universities have taken an advantage of this and have increased the fees that students should pay for higher education with an argument that these students have money from these funds. Government funding to the institutions have also declined but the universities have not reduced their budgets. This means that the money will be extended to the students in terms of tuition and fees. Another issue is the lack of market discipline. Different departments in the institutions bloat their budgets so that they gain more power and get their work done. This has again led to the rise in the cost of higher education. Ineffective price competition among the institutions has also made a major contribution to the rise in the cost of higher education. Competition is also there where each institution wants the best lecturers and that means that they have to pay more. There are also government regulations that require the universities to pay some amounts of money to people like workers who construct buildings in the universities and pay some other fees in relation to research. This increases the costs of running the universities and eventually leads to increased fees on the part of the student. This paper will seek to analyze the different factors that have led to the rising costs of higher education. This research was done to identify the various factors that have led to the rising costs of higher education. In conducting the research, the following questions were put into consideration. What are the major causes of the rising costs on higher education What role do the universities play in the rising costs of higher education Does the government play any role in promoting the rise in the costs of higher education In answering these research questions, both primary and secondary sources have been chosen. One of the primary sources chosen is the book: Going Broke by Degree: Why College Costs too Much by Richard K. Vedder. This book tries to discuss different aspects of the reasons as to why the costs of higher education have risen. Some of the ideas that have been discussed here are the issues of government and other third-party provider funding where fees have been increased because the students are getting some funding from the government and other third-party providers. Competition issues have also been discussed where institutions are competing with their peers in terms of development and the money needed for development is extended to student fees. Government regulations have also been identified as a factor that leads to the rise in the costs of higher education in that the government regulations require the school to pay some money in areas such as research, construction, etc. The other issue discussed is the lack of market discipline where departments and deans will bloat their budgets so that they have some power and resources required to do their job. The other source used is a print PDF: Books and Manuals Application Briefs that identifies the factors that affect the rising cost of higher education. Some of the factors identified include: declining government funding where the government does not fund the education of students in universities fully and also does not support all the students who join these institutions, fierce competition for paying the employees such as the lecturers leading to increased fees and tuition on the side of the student. Some web-based entities are also offering similar opportunities like the ones that the universities are offering and at lower costs becoming a threat. A website by Sandra Block by the title: Rising Costs Make Climb to Higher Education Steeper identifies issues such as declining state support and just like the other sources; it argues that state funding has greatly reduced over time where the universities no longer receive funding from the government. The amount that used to originate from the side of the government has been directed to the students' fee and tuition. The other item that this website has identified is the educational arms race where these institutions are engaging in a race competing for the best lecturers, being the best developed and so on. The book: The Price of Admission: Rethinking how Americans Pay for College by Thomas, J. K. identifies the issue of decline in government funding of state institutions as one of the factors that have led to the rise in cost of higher education. As earlier stated, this has forced the institutions to divert the source of this income from the students and the parents. It also recognizes the idea of competition among these institutions. According to the book, competition for the best teachers leads to the increment in their salaries which leads to more spending and definitely high charges to the students. Third-Party Providers and the Government Funding One of the factors that have been identified to contribute to the rise in the cost of higher education is student funding from third-party providers and the government. The institutions that offer higher education knowing that the students have been funded increase the fees extensively. There is the tendency by institutions to pay higher salaries to workers, hire more staff and equipment, make the physical surroundings nicer, etc. All these are projects that require funding and much money to succeed. The institutions have therefore ended up increasing the fees that the students are supposed to pay now that they know that the students have some money from third-party providers and the government (Richard, 2004: p.26). When students are offered Scholarship grants and educational loans by the government, their resistance to the increment of the school fees reduces and the universities increase the fees aggressively knowing that the students cannot rebel (Thomas, 1999: p.64). This case is quite common especially in state institutions where the student cannot shift from one institution to the other. These institutions are aware that the students have no options than to study in these institutions bearing in mind that the private institutions are even more expensive. Higher education financing finds itself in a vicious circle where the universities increase the fees for students in their first year of study so that the government can increase the money to fund their education (Sandra, 2007: p.1). The government in a bid to try and make education more affordable adds the amount that is granted to students. This increases the demand for education and in turn, the government is forced to increase the funding in the next consecutive years due to a further rise in prices. The process keeps on repeating itself now that the institutions are aware that the government and other third-parties will fund the students in case of fees increment (Richard, 2004: p.27). The institutions on the other hand increase their salaries for employees; hire more staff and equipment, etc. The government and third-party funding have made the students and the parents insensitive to price increment and the government together with the third party can stop the funding temporarily so as to make the students more sensitive to prices. Lack of Market Discipline Most of the institutions do not have an intention to earn any profit and therefore most of the individuals who manage the activities in the institutions will not be interested in reducing the costs of operation. To most management personnel in the institution, an improvement in the services provided will depend on the amount of money that is available. The less the money, the poor the services that can be offered. In effect, whenever a department wishes to make any improvements in the services that are provided, the department has to ask for a large sum so as to ensure that it has fulfilled its mission. Most of the amounts that they ask for are bloated and a lot is wasted in the process (Richard, 2004: p.28). These individuals are also aware that if they spend more money in the departments, they are likely to be heard by their inferiors within the departments. The administrative heads are not left out in the business and as the money is being disbursed, they also ensure that they get a big share to get their work done. A lot of money is used to sponsor tiny projects which could have been sponsored using very little if the heads in the different areas were a little bit keen. To accomplish the many projects that are supposed to be carried out in the institutions, the institution ends up spending a lot of money that could have been saved. The money that is needed to sponsor these projects comes from the students in terms of school fees and tuition. These institutions also tend to hire unnecessary workers and appoint many individuals to authority which leads to an increment in their salaries. These salaries are also to be paid for by the students in the school fees and tuition. Lack of discipline by the management in the way that they spend money leads to excessive spending (Richard, 2004: p.27). Misuse of money just because the institution is not a profit making organization is also common and this leads to an increase in the amount that the students are supposed to pay for the school fees. If the administration spent the money in a proper manner without bloating the budgets, the fee could be stabilized at one point instead of increasing every now and then. Competition The institutions are actively involved in competition where they compete in different areas. One of the major areas of competition is the competition for faculty members. Each institution wants to have the best and most competent lecturers so that their performance can be ranged as the best. This means that they have to pay these individuals well so that they can agree to join them. This leads to high expenditure on the side of the institution leading to an increase in the cost of higher education (Books & Manuals Application Briefs). The institutions are also engaged in a fight to have the best students in their classes. To ensure that the best students in the country join their institutions, there are many factors that require money that need to be funded. Providing the best resources in the library is one of the factors that can lead to winning the best students. Advertising so as to make the institution popular is very necessary. In addition, having competent lecturers is another consideration. Having all these in place means that a lot of money is required (Richard, 2004: p.29). This will allow the institution to attract the best students in the institution but again at the expense of the students. To attract the best students in athletics, the institutions need to provide a classic training ground and a professional to train the athletes. The fact that each university would like to be ranked the best leads to higher spending and in effect, an increase in the fees. Any discounts given to the best students in athletics and in class are paid for by the rest of the students in their fees. Government Regulation The government has put regulations requiring the institutions to pay some money especially money related to projects that are taking place in the institutions for the good of the institutions. The institutions are supposed to sponsor the buildings that are being constructed in their institutions and should pay prevailing wages to their employees. The government is also concerned with the way that institutions dispose laboratory wastes. This is in a bid to try and conserve the environment. The proposed methods of disposal are quite expensive and the institutions end up spending more than they had planned for. The government's regulations on research, safety and health restrictions require a lot of money to fulfill (Richard, 2004: p.32). These and many other government regulations lead to an additional spending by the institutions and eventually the institutions have to look for ways of returning the money. The only option left is to hike the fees so that the students can pay for the services that they enjoy in the school. Declining Government Funding Government funding to institutions has declined these days. Earlier on, the government used to offer funds to institutions to fund some projects that the institutions deemed fit for their development. The moment that the government denies these institutions the right to funding, the institutions have very hard times in knowing where they will get the money. As a result, the money is transferred to be brought by the students in their school fees and tuition. Some institutions used to have almost all the activities in the institution funded by the by the government. The withdrawal of the government or the reduction in the amount that the government provides will definitely affect the projects and developments in the universities if the universities don't look for some alternative way of funding these projects (Richard, 2004: p.26). Now that the only option left is to increase the fee on the side of the student and the parent. The amount that the students should pay is increased by a certain percentage to cover the amount that the government used to provide. Some institutions that have grown very well and have won the trust of individuals are now increasing the cost of higher education so as to take the advantage of other institutions. The high costs have also made parents believe that the services that they are offered are better than the services offered by other institutions. Conclusion The rising costs of higher education have been contributed by several factors. This research was done to identify the various factors that contribute to the rising costs of higher education. Both primary sources and secondary sources have been used to give the data that is deemed correct for this research. Two books have been used; a printable PDF and a website. Most of them agree on the issues but some have additional issues that are not found in others. The third-party providers and government funding are some of the factors that have led to the increase in the amounts that students pay to the institutions. The argument is that the institutions charge more money to the students because they are aware that the government has awarded a lot of money to them. The government also has a tendency to increase funding whenever the fees are incremented. The institutions therefore increase the fees every now and then because they are aware that the government will fund the students. Lack of market discipline is another factor where the institutions have ended up increasing the costs of higher education. This is as a result of the fact that the heads of departments and other individuals in the institution have bloated their budgets so that they get more money to get the work in their departments done and also to get power. Lack of discipline leads to misappropriation of funds where a lot of money is used in funding very small projects that cannot consume even a half of the amount that is spent. Competition for faculty members, students, research grants, etc. The government' regulations have also led to the increment in the costs of higher education. References Books & Manuals Application Briefs. Set Yourself Apart in a Crowded Marketplace. Retrieved on 19-Nov-09 from < http://www.xerox.com/downloads/usa/en/c/Course_Outline_Photo_Books.pdf > Richard, K. V. (2004). Going Broke by Degree: Why College Costs Too Much. New York: American Enterprise Institute, 26-33. Sandra, B. (2007). Rising Costs Make Climb to Higher Education Steeper. Retrieved on 19-Nov-09 from < http://www.usatoday.com/money/perfi/college/2007-01-12-college-tuition-usat_x.htm> Thomas, J. K. (1999). The Price of Admission: Rethinking how Americans Pay for College. London: Brookings Institution Press, 56-67. Read More