Tuition Rising: Why College Costs So Much (review)

In Tuition Rising, Ronald G. Ehrenberg provides a valuable resource for scholars in the field of higher education. His explanation for the causes of rising prices is concise, but it does not add new substance to the policy debates about college costs, given that it draws from other research. However, Ehrenberg's book should interest scholars in our field because, after discussing this issue, he explores the intersection of governance and finance in great depth. After providing a brief summary of the book, this review focuses on some of the implications of this book for scholars in higher education.

The book covers a full range of issues related to finance. Part 1 sets the stage for the book and introduces faculty and the public to the complexity of budgeting in universities. Part 2 describes how faculty preferences influence development policies, the quest for program rankings, and prestige pricing. Part 3 examines the primacy of science over other fields, revealing why economic rationales of cost-benefit analysis and efficiency have little sway in the budgeting process. Part 4, "The Faculty," gets at the core issue and distinguishes Ehrenberg's book from other books on the economics of higher education or academic governance. Parts 5-8 address the roles of governance in budgeting for space, administration, and student life. The concluding chapter addresses some fundamental policy issues, arguing for adequate funding of student financial aid and institutional subsidies. In the process of covering this broad waterfront, Ehrenberg's book raises a number of issues that merit thoughtful reflection.

First, the discussion of the primacy of science over economics reveals the influence of the science disciplines in the budget process. Cornell's Physical Science and Engineering programs are highly ranked. Maintaining these rankings has a high price tag. The economic rationales of cost-benefit analysis and efficiency have little sway in the budgeting process. These economic rationales are still widely espoused in the policy and finance literatures but have little influence on budget decisions in some universities. It is important for faculty in other disciplines to ponder the monetary implications of the primacy of science. It brings substance to the concept of "making humanities count" (Solow, Oakley, Franklin, D'Arms, & Jones, 2002). However, the primacy of science and other high-demand fields, including economics, will not wane because of such reflections. Rather such reflections can inform us about the governance of universities.

Second, Ehrenberg reveals how the decline in public funding has influenced the privatization of public higher education. Since Cornell is partially a state institution, Ehrenberg is able to share his experience about the adjustments universities make to the decline in public funding as well. His discussion is thoughtful and merits consideration by policy analysts and faculty members who are interested in budgeting. The text also raises broader issues about privatization, but does so differently from other widely reviewed texts (e.g., Bok, 2003; Slaughter & Leslie, 1997). Indeed, his book merits review by scholars interested in privatization (i.e., the shift from public to private funding) and commercialization (i.e., increased money-making efforts).

Third, his discussion explores how faculty interests and preferences influence budgets and rising college costs. He describes how the quest for prestige intersects with the faculty star system to influence growth in endowed professorships. He also explores how internal and external forces drive up faculty salaries. His discussions of the end of mandatory retirement and of budgeting strategies that encourage transitions at the end of careers are thoughtful and analytic. Clearly faculty have an interest in having their institutions spend more, especially on salaries, a force that can drive costs higher. Ehrenberg provides insight into the consequences of this vested self-interest.

Finally, Ehrenberg also illuminates how the quest for prestige subverts pricing and student aid. Economists have long argued that colleges and...