I know first-hand that this is not how pricing decisions work at regional private colleges/universities. The process regional private colleges go through is as follows:
1. List a set of "peer institutions", usually with the primary input coming from admissions. Here, "peer" means "competes for the same set of students we're after". Almost always the region's public colleges and universities will be on this list.
2. Set prices relative to these "peer institutions".
If Local State College charges $X, then most (read: non-elite) regional private colleges can get away with charging after-discount-factor $(X+Y) for some relatively modest Y < X.
Increasing $X also increases $(X+Y).
Cutting state subsidies will lead to higher prices and private institutions. 100% probability. I've seen the exact process by which it happens.
Yes, this is a great summary, and exactly what is going on.
Interestingly, it hasn't seemed to have much change on the spending side. Colleges are charging more to the median student, but are using a lot of it to subsidize less well-off students. It's not showing up in huge increases in faculty salaries, or administrative costs.
> It's not showing up in huge increases in faculty salaries, or administrative costs.
Not in faculty salaries, but often in faculty headcount. Lots of colleges and universities have added a lot of faculty while keeping student headcount constant. Mostly because they can't fire their tenured humanities faculty but need to hire people who can prepare students for something other than the Barista life.
IMO: tenure should be used very sparingly and should be viewed as part of a competitive compensation package. E.g., if the CS PhDs you want to recruit all have $300K offers in industry and the best you can do is $70K-$80K even with salary inversion, then you absolutely do need to offer tenure. It's part of the comp package and you simply will not recruit good people without offsetting such significant pay gaps.
But tenure for humanities borders on fiduciary irresponsibility. The job market for humanities PhDs is such that you can hire truly top-tier candidates without committing to having another head in the Philosophy or English department 40+ years. The $50K three-year contract is a competitive offer in the humanities. No need for tenure.
> Colleges are charging more to the median student, but are using a lot of it to subsidize less well-off students.
Certainly some of that too. I expect this will be the leading cause through 2030.
> Not in faculty salaries, but often in faculty headcount. Lots of colleges and universities have added a lot of faculty while keeping student headcount constant.
Do you have a citation for that? The message in the industry is that colleges have been reducing faculty headcounts, and relying on adjuncts to cover class loads, not that there are too many faculty.
> tenure should be used very sparingly and should be viewed as part of a competitive compensation package.
I don't think you're going to get very far with this argument in most universities, where faculty see themselves as part of the governance of the university. There's quite a bit of collective action between faculty, and I think even if you could get faculty in some departments without tenure, the STEM faculty would not want to create a two tiered system.
Reductions in faculty headcount are recent. As in, pretty much only this past year. I’m talking about the last 10 or 20 years. Replacing tenured with ad juncts or instructors is not a headcount reduction.
There already is a two-tiered system. Ad juncts and instructors are treated and paid horribly. Stripping tenure but otherwise leaving positions unchanged is downright humane by comparison.
Tbh, faculty governance is pretty dead at most places.
I'm not ignoring this at all. I'm merely explaining the mechanism by which public university pricing effects private university pricing. Of course access to credit increases the ceiling! But also, when public universities receive less funding, private universities increase their prices. These two facts are not mutually exclusive.
