ABSTRACT
Opinions differ about many of the Spellings Commission’s conclusions, but few informed observers contest its fi nding that for decades, the cost of higher education has increased faster than infl ation or family incomes (Spellings Commission, 2006). For example, Vedder (2004, p. 6) reports the mean annual increase in tuition exceeded the mean annual rise in the consumer price index by 3.6 percentage points. Similar conclusions apply, on average across institutions and over time, with respect to instructional cost per student. Financial aid has held down net tuition increases for some segments of the population, but, for most, net as well as gross tuition has been rising. The purpose of this chapter is not to detail or decry what most observers agree is a pervasive phenomenon, but to examine its causes (Detailed descriptions can be found in McPherson, et al., 1993; Hoenack & Collins, 1990; Ehrenberg, 2000; Clotfelter, 1996.) It is only by understanding causes that one can craft meaningful policy recommendations.
