Rising Tuition

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EH 102
11 March 2013
College Tuition: Why is the Tuition Continuously Rising?
Most people have heard an elder complain about rising prices saying, “When I was your age I could go to the store with a quarter and buy a bag of chips, a few pieces of candy, some cookies, a drink and still have change left over.” Although the prices from decades ago are ideal, the concept of inflation and the decrease in the value of money have been accepted. Inflation affects the price of everything like milk, clothing, medical care, gas, and especially college tuition. According to the Bureau of Labor and Statistics, college tuition prices have increased at the highest rate compared to any consumer item, medical care, or even gas. In fact, college tuition and fees, as of 2012, are 600% of the tuition and fees in 1985 (Rampell 4). This statistic poses the question of why the cost to obtain higher education is steadily rising. A simple explanation can be found in the key economic principle that demand drives prices up, but the issue goes much deeper than that. The structure of the financial aid system, additional accommodations offered by colleges, and most of all the decrease in government funding toward higher education are the causes directly correlated to the continuous rise in tuition.

Firstly, the structure of the financial aid system is a contributing factor to the steady increase in college tuition. Dr. Joshua Robinson, an economics professor at the University of Alabama at Birmingham, explained that it is often argued that the increase in federal aid simply leads colleges to raise their tuition costs to reflect the financial aid in hopes that it will buffer the increase. This idea represents the Bennett Hypothesis, which was created by U.S. Secretary of Education, William J. Bennett (Robinson). There is much argument over this hypothesis, but there have been many credible findings that support this idea. Title IV deals with the federal student aid programs. According...
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