A NewsNation viewer from Michigan paid off his daughter’s college debt but said, “It took me 14 years” to do it.
“What can the colleges do, if anything, to control these costs?” he asked.
The discussion on whether inflation played a role led NewsNation viewer Scott Davies, a former psychology professor at OSU, to have a few questions of his own.
Lindsey Piegza, an economy expert with Stifel Nicolaus & Company, joined “Morning in America” to answer his questions.
Q: It seems to me that given the tuition is primarily driven by the employment of the professors and staff. It’s mainly wage-driven. That and wages have been stagnant for so long. How can we blame this on inflation?
“I think first off, we do have to recognize that inflation does impact different sectors of the economy differently, as factors of supply and demand impact sectors and products very differently,” Piegza said.
According to Piegza, a simple example would be if we see unfavorable weather across Central America that can drive up coffee prices 200%. But back at home in the Midwest, if we see exceptional growing conditions, we could see corn prices actually dropped by 10%.
So first off, she said. we do have that differentiation in terms of how inflation impacts different sectors.
But as far as tuition costs, Piegza says there’s several factors that are driving higher tuition costs.
First, she points to government policies.
As the government raises limits, particularly on undergraduate loans, the cost of tuition rises. Institutions wouldn’t be able to charge more or charge what they do, if students didn’t have access to more and more federal loans and funding opportunities.
The second issue is really what’s being provided at universities or how it’s being provided, she said.
Universities have made substantial investments in technology, and also social spaces.
And the third issue, according to Piegza, is rising labor costs.
As the price continues to rise for workers, workers require additional compensation to offset that loss of purchasing power in the market, as we continue to see inflation take hold. And universities often have hundreds on staff, in some cases, maybe more. So the cost of keeping a university running is on the rise. And all of these factors are driving up costs that then get passed on to the students in the form of higher and higher tuition bills.
Q: Who should ultimately be responsible for this? Because most of us would not have sought out the education that we did unless there was someone that was going to hire us to do that work.
My undergraduate education was paid for by Rockwell International, where I was a steelworker. And they paid for me to get a degree in psychology before I got my graduate degree. And they saw that as a good thing for the workers, right.
The same businesses are the ones that are driving up the costs of say, professors, right? A business professor can decide to go to work for a corporation and make a lot more money than they can as a professor. So then it drives up the costs for the college to hire that same professor.
So it seems like businesses have a lot to do with corporations have a lot to do with the cost of education, and they’re ultimately the ones who make money off of us having an education.
I don’t know that we would pursue the education that we have. If there was not someone out there who was going to hire us and pay us to do whatever it was we taught.
So perhaps they should have a bigger role and paying for it.
“It’s a good question,” Piegza said. “It’s essentially where else can we get the money from to fund university attendance?
Piegza said before we talk about funding the current system, she would argue that we need to take a look at our current system and maybe address the uncomfortable fact that not everyone benefits from a four-year liberal arts degree.
Many potential workers would arguably be better off earning, she says, a two-year associate’s degree, coming out of school ready to fulfill one of the 11 million job vacancies that we currently see in the economy and facing little or no student loan debt.
So that’s one area that Piegza thinks we do need to focus on when we talk about the university system becoming unsustainable.
Piegza said unless we’re proposing more public sector dollars, she doesn’t see any way to reduce or even offset the cost of tuition unless demand is impacted either by students finding alternatives, again, such as an associate’s degree, or universities themselves simply reaching a tipping point where they begin to price students out of the market.
Watch the full Q&A in the video player at the top of the page.