Partly the case, but not the whole story. Part of the problem is that universities (public and private) are spending far too much money on adding to their campus (new buildings, dorms, etc) and trying to make themselves research institutions and paying professors and administration ever increasing pay and benefits. And why not, if you can jack up tuition at 7% year in and year out.
I partly agree with this, but also disagree. Points of agreement: 1) as the shift to loans happened and state funding was dramatically decreased in many areas, schools became more dependent on tuition and students became viewed more as "customers." In the late 1990s early 2000s there seems to have been an increasing competition to please these 18 year olds with the things they would like (e.g., fancy gyms, more apartment-like dorms) in order to compete. The thing was, this paid off. If you could make yourself desirable to 18 year olds you had enrollment levels that made it less likely you would need large tuition hikes.
But this trend has been dying out somewhat in the past 5 years or so --maybe because students became more savvy or it became harder to differentiate a place with luxuries when everyone has them.
2) Administration has higher growth in salaries-and the gap between administration pay and faculty pay is wider than ever before. Adminstrators are more like executives now than scholars and they are often evaluated more on their fundraising than support for academic quality. There is a strong pressure towards constant growth rather than stability.
Points of disagreement:
1) On average in the past decade multiple large studies have shown decreased relative salaries for professors (Chronicle of Higher Education published a review of a couple of large scale decade long studies that documented this extensively--being a professor has become dramatically more competitive with less real financial compensation in salary and benefits). Professors are relatively poorly paid compared to their own past and to the present considering the level of education required (and foregone salary to get it) and how much is expected of them. To become a professor at the associate level at a Research I institution you are typically expected to be bringing in grant funding that is often 5x your salary on an annual basis , conducting significant research--and mentoring doctoral students to do research-- publishing, earning top teaching ratings etc., mentoring a large group of graduate students and teaching undergrads. The demands on professors have increased and the rewards have decreased. They are not reaping the benefits of high cost education.
2) Research funding generally improves the value for students and lowers the real costs (and also provides the second most important public good of a university after education). A sizeable percentage of funds goes for supporting university operations. The issue is that schools need to make honest assessments of whether their investments to be competitive in research are paying off adequately. Many ones are---but others are investing in research with the hopes that they can continue to grow despite loss of state funds but without reasonable payout in terms of research funding (especially as federal, corporate and private sources dwindle) and the costs get born by the students in tuition hikes, and faculty/staff in stagnant wages, increased responsibilities, and greater use of very cheap adjunct faculty--PHds who essentially make near minimum wage teaching a course if you count the real hours involved.
In my view we need to be more imaginative: for instance, get more public support for colleges at the state level maybe in exchange for some percentages etc. on the benefits of research (e.g. patents, highly trained workers in needed areas) --the business/research collaboratives in higher ed are making incredible gains in some fields, but private companies are often siphoning off the gains from the investment made in research to higher ed. Our current way of thinking through this is wrong. If a public institution invests in expensive biomedical research gets the basic research done in a wide range and then a private industry can patent a product that involves just doing one step beyond the most commercially profitable aspect of the research, then there's a huge loss for the university. We haven't yet figured out good models of balancing the public model of open-shared research with the business model of proprietary information.
2) on the teaching side,maybe decide that some institutions--and not just liberal arts colleges--are going to be kickass, highly competitive schools known for their teaching. Using all that we know about cognitive science, pedagogy, assessment--really ensure that students learn both broad skills like critical and complex thinking in a range of domains and specialized skills in a discipline. Professors would be assessed on their ability to keep current on and understand the research in their field and teach it to others--rather than publishing in a narrow area. This is not as expensive as gambling on turning your institution into a research institution--and students could be sent to research 1 institutions for their more hands-on work with research. And many more generalist scholars might prefer to be able to read broadly, synthesize etc. than becoming the increasingly specialized folks the academic market demands.
Ok...off my higher ed soapbox...
