Liberals’ Favored Explanation for Soaring College Costs Falls Flat

College tuition has been rising for decades, pricing many would-be students out of the market for a higher education.

The average cost of tuition and fees at four-year public universities increased by 336 percent from 1985 to 2015. That eye-popping figure actually hides the state of the problem as it doesn’t include necessities like books, room and board, and meal plans, the price of which has increased far faster than inflation.

These spiking costs have necessitated ever-higher student loan debts, which, in turn, have created downstream economic impacts on young adults’ willingness and ability to buy a home, get married, and start a family.

There has been a lot of research diagnosing the problem, but a relative lack of scholarship on its cause. Instead, many have simply pointed the finger of blame at state budgets cuts as the predominant reason for higher tuition costs. For instance, the liberal Demos argued that, “Because education and related expenses are funded nearly entirely by tuition and state monies, declining state support has caused a dramatic shift in the share of these expenses paid for by students and the government.” That position has also been adopted by the New York Times, USA Today, the Washington Post, and dozens of others.

But is it true? A report from the left-leaning Brookings Institute suggests the answer is a clear “no.”

The problem, explains Brookings’ Jason Delisle, is that proponents of the state disinvestment theory of tuition increases are simply putting “changes in tuition at public universities side-by-side with changes in state appropriations in a table” and then assuming higher tuition must necessarily be caused by reductions in funding.

“[I}t assumes that a causal relationship already exists, that it is dollar-for-dollar, and that no other factor could explain the changes in tuition,” writes Delisle.

This, as it turns out, runs directly contrary to the evidence. Forbes’ Preston Cooper ran the numbers on per-student change in state appropriation against their change in tuition revenue and found that every dollar of reduction in appropriations was associated with a 2.3 cent increase in tuition revenue. Other studies on the issue have found effects ranging from six cents of every dollar to 19 cents, which means that other, potentially larger, factors must be at work to fuel rising college costs.

“[T]he available research suggests that if state lawmakers increased appropriations for public colleges and universities, it would be unlikely to have an effect as large as advocates assume,” Delisle concludes. “More state funding appears to buy pennies on the dollar in lower tuition. That makes increasing appropriates for public colleges and universities an ineffective—even wasteful—policy for keeping tuition low.”

Unfortunately, the lack of scientific rigor employed by advocates of increased government spending is unsurprising. After all, it flies in direct contrast to the core tenet of their philosophy – that greater expenditures of taxpayer funds inevitably results in improved outcomes.

Conservatives must be similarly cautious in their conclusions. These studies do not suggest that Republican legislatures should go on cutting spree in the belief that it will have a relatively negligible impact on college costs. Here again, no causal link has been established. But what it does suggest is that more scholarship is needed. Ever-higher tuition rates is having a tremendously negative effect on on an entire generation of borrowers who are being economically weighed down by hundreds of billions of dollars in debt.

Whatever the ultimate answer is – whether it is administrative bloat, or exorbitant campus amenities, or needless classes, or the “cost disease” that results from being labor intensive, or the distortionary impact of student aid – students deserve to know. The left must no longer assume, merely because it is politically convenient, that reductions in appropriations is the explanation for higher costs. We need policy solutions, and to arrive at them we need the better data that flows from simple intellectual curiosity.