View the introduction, summary, press release, and key points.

The traditional argument for government subsidies is that a college education provides not only the private benefit of a higher income and a more abundant life but also the social benefit of a more productive and educated citizenry. Maybe, but Mr. Vedder ingeniously shows that the states that have spent the most on higher education in the past 25 years have experienced the least economic growth.”

—The Wall Street Journal

The dramatic rise in university tuition costs is placing a greater financial burden on millions of college-bound Americans and their families. Yet only a fraction of the additional money colleges are collecting—twenty-one cents on the dollar—goes toward instruction. And, by many measures, colleges are doing a worse job of educating Americans. Why are we spending more—and getting less? In Going Broke by Degree, economist Richard Vedder examines the causes of the college tuition crisis. He warns that exorbitant tuition hikes are not sustainable, and explores ways to reverse this alarming trend.

Vedder's research demonstrates that America’s universities have become less productive, less efficient, and more likely to use tuition money and state and federal grants to subsidize noninstructional activities such as athletics. These factors combine to produce dramatic hikes in tuition, making it more difficult for Americans to afford college.

Vedder believes that competition from for-profit universities (the fastest growing sector in higher education), computer-based distance learning, and nonuniversity certification of skills can be a powerful force for needed change. He suggests that possible solutions to the tuition crisis include modifying tenure, increasing teaching loads, paring administrative staffs, increasing distance learning, and cutting costly noneducational programs. He also suggests even more dramatic changes, including transforming state grants to universities into student voucher programs, as well as other steps to increase privatization of state universities. [more...]

Richard Vedder is distinguished professor of economics at Ohio University and an adjunct scholar at the American Enterprise Institute. Trained as an economic historian, much of his work has dealt with the history of American labor markets and issues such as immigration, internal migration, slavery, and unemployment. After serving as an economist with the Joint Economic Committee of Congress, Mr. Vedder focused on public policy issues dealing with labor markets and governmental budgetary policy. In the past decade he has worked on issues relating to education at both the primary/secondary and university levels.

Mr. Vedder’s previous books include The American Economy in Historical Perspective, Unemployment and Government in Twentieth-Century America (with Lowell Gallaway), and Can Teachers Own Their Own Schools? He has authored over two hundred scholarly papers, which have appeared in The Journal of Economic History, Agricultural History, Explorations in Economic History, and numerous other academic journals. His writing has appeared in the Wall Street Journal, USA Today, Investor’s Business Daily, the Christian Science Monitor, and the Washington Post. The winner of numerous teaching awards, Mr. Vedder is a popular public speaker, having lectured on public policy issues across the country and in Europe and Asia. He has advised numerous political leaders on tax and fiscal policy or education issues. Mr. Vedder is a graduate of Northwestern University and the University of Illinois.