Since 1978, the cost of going to college has increased around four times faster than the rate of inflation. Even President Obama couldn’t ignore this dramatic rise. Earlier this year, he took a strong stance on the issue by threatening to withhold federal aid from colleges that weren’t a good value and raised tuition “too fast.”
Penn certainly comes at a good value even though it’s charging students $39,088 in tuition this academic year. Tuition only covers 70 percent of the direct cost of educating students. Direct cost. This doesn’t take into account the money the University spends on facilities and technology for students to enjoy. Think Penn Park, Huntsman Hall and Shoemaker Green — we didn’t have to pay a dime for these.
Penn provides an incredible education and should be charging more. At a minimum, tuition should be raised to cover the direct cost of education — but I think we need to go a step further. The University should double its tuition.
In fiscal year 2011, revenue from tuition and fees amounted to $747.4 million — about an eighth of the University’s operating revenue. Doubling tuition won’t double revenue since more students would become eligible for financial aid. But it’s safe to assume that annual revenue would increase by at least 50 percent or a cool $375 million.
Penn could use this money to grow its faculty, invest in new facilities, fund more graduate students and provide more funding for research.
In addition, the University could be more generous with its financial aid. Currently, admission is only need-blind for United States citizens and permanent residents. Doubling tuition would allow the University to do the same for international students.
Of course, this radical change will come at a cost, and students who currently pay full tuition will be affected disproportionally. Although some of these students would qualify for financial aid under Penn’s new price tag, it’s likely that talented students will be priced out of Penn and be forced to go elsewhere.
Students who are currently on financial aid, however, have nothing to worry about. They won’t be seeing any increase in their bills since the financial aid office determines how much their family contributes.
Some might think this idea goes too far, but students already keep price tags in mind when deciding between schools. By charging $39,088 a year, Penn is already more expensive than many comparable institutions. Every year, the University loses students to the top state schools with much lower tuitions.
When I was deciding where to go as an undergrad, for example, I chose to attend the University of Virginia instead of Duke University or Johns Hopkins University because I didn’t think it was worth paying an extra $100,000 over four years.
Doubling tuition will definitely be hugely unpopular, but it’s still worth considering. In 2002, while I was studying abroad at Cambridge University, tens of thousands of students took to London’s streets to protest government proposals that would triple tuition by raising it from 1,000 to 3,000 pounds.
In order to find out how a hypothetical increase in tuition might play out at Penn, I contacted Student Financial Services and the Office of Admissions. I got the run around — administrators I spoke to at each office referred me to the other for an answer.
Maybe you think I want to soak the rich. Nothing could be further from the truth. Just think: if Apple took a 30 percent loss on every iPhone it sold, would it be soaking the rich if it doubled its price?
Students who pay full tuition aren’t wild about my idea. Virtually everyone in this situation who I’ve proposed my idea to in the last two weeks has indicated that they don’t think it’s “fair.” But, at the same time, is it “fair” that they were born into a family in the top five percent of the income distribution?
“Sticker shock” — a problem that Penn is already worried about — could get worse. Low-income students, who would theoretically qualify for financial aid, may be deterred from applying. Admissions and SFS have tried to combat this by informing “prospective students and families of Penn’s generous financial aid program,” Marlene Bruno, the director of Communications at SFS, explained to me in an email. However, it’s unclear how effective these efforts are.
Penn is not a business, but it is leaving money on the table — money that could be used to enrich academics and expand access. So let’s double down.
Kurt Mitman is a 6th-year doctoral student from McLean, Va. His email address is firstname.lastname@example.org. Follow him @SorryToBeKurt. “Sorry To Be Kurt” appears every other Thursday.