Wednesday, July 20, 2016

How much does it cost to provide a college education?

The price of college-level study varies widely. At the top end, Harvard charges some $47,000 in tuition and fees per year. At the low end, CCNY charges in-state residents $3165 per semester. Subsidies and prestige pricing abound in higher education, obscuring actual costs dramatically. But how much does it actually cost to provide a college education? Let's try for a ballpark figure.

A college education usually consists of four years of study, two semesters per year, with maybe five courses per semester. That's a total of 40 courses.

The main expense of running a college is the professors who teach the courses. Suppose each professor teaches four course sections a year, two per semester. That will leave him or her time for a bit of scholarship during the school year, as befits a scholar who is not purely an instructor. The loaded cost of a professor might be $150,000 per year, including benefits. And each course section has 100 students on average. That comes out to $150,000/(4*100) = $375 per course for each student.

40 courses per student at $375 each comes to $15,000. But that's just the cost for the instructor. Colleges also have libraries, lecture halls, labs, office space, recruiting expenses, and a hierarchy of supervisors and deans, all of which come under the heading of "overhead". How high might those costs be?

Colleges typically take 50% off the top of every research grant awarded to their faculty members for overhead expenses, which suggests a useful and simple ratio of 1:1 in primary costs to overhead. So the original $15,000 becomes $30,000. Of course, that $30,000 excludes quite a bit: room and board, text-books, and general living expenses for those who aren't still living at home. But that's our estimate: a bare-bones college education costs $30,000.

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