Justin Pope, an education writer for the Associated Press, is discovering that the rules of supply and demand can still apply to education.
He reports on the surprise of college students and their families that the price of an education keeps going up, even though inflation has leveled off with the recession. As I have pointed out elsewhere, the federal government had already driven up the cost of education through student loan programs. Colleges know that the students will try to get the money, borrowing today for the hope of a payoff tomorrow in the job market. Also, the demand for education is growing. With poor job prospects for people ages 16-24, college is considered a good way to spend time while waiting for economic recovery. This means more people in undergraduate and graduate programs. If colleges aren’t hurting for students, why should the colleges hold down prices? Besides, most public schools are facing some reduction in funding from states as tax revenues decrease. The income gap has to be closed some how.
Maybe more of those college students should take economics courses so they have a better understanding of why the colleges will keep raising tuition.
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