High tuition costs mostly stem from the Omnibus Budget Reconciliation Act 1993

This is only one piece of the puzzle. Another is the significant reduction in state funding to colleges.

In particular, funding cuts are somewhat cyclical, occuring during economic downturns. Higher Ed funding always looks like the low-hanging fruit to cut. Health and social services, corrections (prisons) and K-12 education are much more problematic from a political optics viewpoint. Higher Ed is, in some sense, still seen as "optional" in the sense that people can live without it and because colleges do have an alternative revenue stream.

I've seen colleges have funding for basic things like updating crumbling infrastructure pulled mid-summer when states finalize budgets and a 5-year infrastructure program from the state is cut off in year three. This makes it very difficult for budget planning, and it's not uncommon for schools to then have to put out a bond to finish funding things itself.

A third factor is a sort of toxic arms race between colleges to recruit new students. In the wake of revenue uncertainty colleges of course try to increase their their enrollment to boost revenue. It has turned into a negative sum game, a college builds shiny new dining or housing facilities to attract new students, and the school down the road loses enrollment & revenue as a result which means they need to spend money building such things just to not lose students. Meanwhile the old facilities were perfectly adequate though by no means luxurious. Students going through the recruitment meat grinder are then making choices based on whether or not the school has various food franchises on campus. Schools doesn't have a Starbucks or even a Dunkin Donuts? Can't go there!

I don't know the solution to that one. The first schools that did it gained a brief competitive advantage but now it's more of an equilibrium where all schools have to do it just to tread water.

Anyway, it's all much more complicated than simply changing the loan structure (which of course was a big part of things as well.)

> The money is going into a bottomless pit of administrative and bureaucratic overhead. Universities are caught up in a zero-sum competition for the top students (and athletes). To attract these students they invest in massive infrastructure projects (new buildings and renovations), often with the support of earmarked donations from wealthy alumni. These new facilities must then be staffed with administrators and maintenance workers. Along with the new facilities come new departments and schools of X and Y which also need their own administration.

> The short answer is: administrative bloat.

I don't get it -- you're saying it's "bloat" and bad that the competitive market for students is causing universities to invest in themselves?

You've actually convinced me that a large chunk of costs for nameless "administrators" might be going to useful purposes because investing in buildings and programs requires non-educational staff to keep things going.

The linked article doesn't say it's constant dollars, that's probably a far bigger change than it looks like.

Also, note that the relationship is non-linear: Suppose it really is constant dollars and constant costs and it really costs $10k/quarter/student and look at the numbers: $511/quarter in 1987, $2,848 in 2015--a 30% drop in funding leads to a 557% increase in tuition.

>where is that money going?

One place is that it is used to replace reductions in government support.

"the single most important factor associated with tuition increases was decreasing revenue from government appropriations, with state appropriations making up the majority of such revenue.[1] (this is an old study, but I believe the pattern still exists, and is even more exacerbated)

Another seems to be that administrative costs are growing disproportionately at the same time that public money has been getting smaller. This seems to be aligned politically, so it may need to be taken with a grain of salt but I can give one anecdote.

When I went to college, I was sent to see the veterans representative. At that time it was just a single person who had those duties tasked on top of her "real" role. Now, it's common for colleges to have entire admin teams to recruit and help veteran students. On one hand, this can be great for the colleges and students; if managed well, those students bring in "free" government money. On the other, it's probably hard to calculate the true ROI of such a team; for example, it may be hard to know how many of those student-veterans would have attended regardless if there was a full team to support them or not. But all those admin teams, across all the different groups and bureaucracies add up.

[1]https://nces.ed.gov/pubs2002/2002157.pdf

I'd like a variant on this:

X% of income *above the poverty line*, no time limit, disappears upon death. Administered through the IRS, it's a line on your tax return and thus automatically adjusted for income.

(And I'd do the same thing with child support--x% up to $y.)