Ric Edelman: The Real Reason College Is So Expensive

Ric Edelman: Ever wonder why college is so expensive? It's because pretty much every one of the best known public universities has been spending massive amounts of money for decades on new academic buildings and dorms, sports programs and massive numbers of new administrative staff.

A big analysis was just released by the Wall Street Journal. Over the past 20 years, the average flagship university has increased spending by 38%. The University of Kentucky has been spending $800,000 a day every day for the past 10 years. We're talking $3.7 billion over the past 12 years.

That included a student center, a 900-slot parking garage, a theater for video game competitions, dorms that feature full-size Tempur-Pedic mattresses, granite countertops and washer/dryers in every unit. Tuition there is $20,000 now for students who live in one of the poorest states in the country.

The University of Oklahoma spent $14 million to buy and renovate a 32,000 square foot monastery in Italy for its study abroad program. That monastery now has a landscaped garden and faculty apartments. The classrooms have painted frescoes and the school raised tuition for all of its students to cover that cost. Penn State has spent so much money that it's in a budget crisis. I'll tell you more about that in a minute.

Only one school The Wall Street Journal reviewed has spent less in the past 20 years. State schools get money from two places: state budgets and student tuition. Over the past 20 years, states have been cutting education budgets.

But for every dollar the schools have lost in state support, they raise tuition and fees by $2.40. And it's not always for improving education that money goes to. Colleges have expanded intramural sports. They built new dorms and stadiums. And during all this, the number of faculty is unchanged, but the number of administrators has skyrocketed.

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