A new study argues that skyrocketing college costs are a result of university leadership not prioritizing college affordability over profit.
The report by the American Council of Trustees and Alumni (ACTA), which looked at data from more than 1,500 four-year public and private, nonprofit colleges and universities, found that even though institutional spending has risen over the years alongside tuition, four-year graduation rates have not kept up.
"The spending habits of higher education have gotten us very poor results," ACTA President Michael B. Poliakoff told Yahoo Finance Live (video above). "We are taking a system of higher education that has been called 'the envy of the world' into a situation in which it seems to be engineering its own meltdown."
Poliakoff added that colleges were not financially strapped due to diminishing state and federal funding, but rather due to the "investment in bloated administration and student services programs that keep ratcheting up the price of tuition while not increasing that most important outcome, which is completion of the degree."
Tuition inflation in the 21st century has led to heavy borrowing and a student debt crisis that some lawmakers are urging the White House to address through broad cancellation of some federally-backed debt. Some schools are even leveraging federal funding from coronavirus relief packages to cancel debt owed by their students.