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1 Why Is American Education Expensive Compared To Other Countries Name Institution Course Professor Date

2 Why Is American Education Expensive Compared To Other Countries Introduction The ripple effects of the 2008 recession are still widely visible worldwide, as evidenced by the high rates of inflation and distraught concerns in various supply chains (Heflin, 2019). The prices for most commodities have surged, including essential services such as education. Apart from the ramifications of inflation, the reduction of state funding and the changing perception of quality has increased the sticker price of education, mainly in colleges and universities in the United States. According to data are drawn from the OECD (2019) website, college and university education in the United States is the second most expensive compared to other countries in North America and Europe. Friedman and Friedman (2018) observed that learners spend $30,165 on averagely on a full-time session which is double the average cost compared to the $15,556 rich-world average. Luxembourg is the only country where education costs more than in the United States (Akinbobola, 2021). This discourse will expound on the factors influencing the ballooning cost of education in higher learning institutions. The paper will integrate other sources that aim to show the education system as an aggregate of factors such as generational shifts and cultural interferences. Overview of the Current State of the U.S. Higher Education A study conducted by Fisherman et al. (2018) on the state of education in the country highlighted that 68% of the population aged between 18 and above believed that the education system needed refining. The study's findings further highlight that 75% of the residents agreed that a college education guaranteed success. Data gathered by the U.S. Census Bureau (2004) indicate that at least 30% of the population possesses a bachelor's degree. The surge in demand

3 for college education has seen the cost increase eight times compared to wage growth (Bustamante, 2019). The research by Zerman (2021) indicates that the average total price for a 4- year course in local colleges will cost approximately $122,000, thus, prompting students to seek other means of financing as they are unable to because of the low wages. Consequently, this has resulted in at least 70% of undergraduates seeking financial help in the form of student loans (CollegeBoard.org, 2019). The high number of students applying for student loans to finance their education has led to a total student debt of 1.6 trillion (Friedman, 2020). The reason behind the Expensive Cost of Education Demand Demand is the principal reason higher education is expensive in the United States. According to Mishel (2015), the number of learners applying for higher education has more than doubled for both local and international admissions despite the stagnant wages. The high number of admissions has, in turn, influenced the surge in operational costs as more students apply for financial aid prompting institutions to increase their tuition fees (Dunn, 2021). Titlebaum and Barzani (2022) argued that the high tuition costs could be analyzed using the supply and demand cycle. According to data from the Department of Education, 19.9 million students applied for the 2019-2020 academic year, which is 5 million more than the applications received in the 2010- 2011 academic year (NCES, 2019). The high application and enrollment rates highlight that higher education advantages outweigh the cost, with the future looking dim as the wages remain stagnant coupled with high inflation rates. Reduction in State Funding

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4 Most states in America have limited financial assistance towards funding education significantly higher education institutions. Souza (2022) argued that this move had prompted institutions to increase their cost to cover their overhead costs. The findings of a survey conducted by the College Board (2019) echo these sentiments since as states cut on budgetary allocation, the cost of a college education rises. The 2015-2016 academic year witnessed an 11% cut in state funding, resulting in a 20% increase in tuition fees (Cadenas et al., 2022). However, a study by Hales (2021) highlighted the limited impact of state funding cuts in private higher learning institutions, which shows a more exclusive factor for students relying on grants and scholarships in public institutions. Rising Operation Costs and Inflation The education sector is highly labour-intensive, as it requires a considerable number of teaching, administrative and subordinate staff. Additionally, to gain recognition as the best, colleges must invest in competitive amenities and provide competitive salaries to their personnel (AAUP, 2012). The lack of complete automation due to suspicion makes the cost of operating higher education institutions higher than other organizations. Strategies to reduce the cost of operation, such as enrolling in large classes and reducing the level of personnel compensation, are negatively received in most colleges. The whole and part-time professors in the colleges and universities contribute to over 51% of the total personnel contributed to the cost burden (AAUP, 2018). Contemporary universities and colleges have evolved from their traditional outlook in the 1990s as they have become ecosystems. All universities and colleges have integrated available student services such as healthcare and counselling (Brush, 2021). The operation of such

5 facilities and functions drives the operational costs of the institution up, which is passed on to the student (Priestley, 2022). Other functional facilities include research, support and dormitories.

6 References AAUP (2012). Trends in Faculty Employment Status, 1975 ‐ 2011. Washington, DC: American Association of University Professors. AAUP. (2018). The Annual Report on the Economic Status of the Profession, 2017- 18. Washington, DC: American Association of University Professors. Akinbobola, B. A. (2021). A Narrative Literature Review Addressing the Relationship between Students Enrollment and Campus-Based Financial Aid in the United States of America. Brush, C. G. (2021). Entrepreneurship education ecosystems: the case of Babson College. In Innovation in Global Entrepreneurship Education . Edward Elgar Publishing. Bustamante, J. (2019a). Average Cost of College & Tuition. EducationData.org. Cadenas, G. A., Liu, L., Li, K. M., & Beachy, S. (2022). Promoting critical consciousness, academic performance, and persistence among graduate students experiencing class- based oppression. Journal of Diversity in Higher Education , 15 (1), 26. CollegeBoard.org. (2019). Trends in College Pricing. New York, NY: College Board. Dunn, D. (2021). Effective academic support practices to improve student retention and success at technical and community colleges. Friedman, H. H., & Friedman, L. W. (2018). Does growing the number of academic departments improve the quality of higher education? Friedman, HH & Friedman, LW (2018). Does growing the number of academic departments improve the quality of higher education , 96-114. Friedman, Z. (2020, January 6). Here is what 2020 presidential candidates think about your student loans Forbes . Hales, E. S. (2021). Determinants of the Student Loan Decision and Financial Well-Being: The Role of Financial Education, Financial Literacy, and Student Loan Characteristics (Doctoral dissertation, Utah State University). Heflin, Z. (2019). The new American Dream: Alleviating the student debt crisis. The New Center . Mishel, L. (2015). Causes of wage stagnation . Washington, DC: Economic Policy Institute. National Center for Education Statistics. (2019). Back to School Statistics. Washington, DC: NCES.

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7 Organization for Economic Co-operation and Development. (2019). Education at a Glance 2019 . Paris, France: OECD. https://doi.org/10.1787/f8d7880d-en Priestley, R. D. (2022). How Universities with Healthy Research Ecosystems Can Help Foster Greater Inclusivity. JACS Au , 2 (2), 259-260. Souza, K. (2022). How Can I Ever Repay You? The Borrower's Dilemma and a Tax-Based Solution to the Student Debt Problem. Hastings LJ , 73 , 129. Titlebaum, P. J., & Barzanti, D. (2022). Betting on College: Are You Leaving Money on the Table? In SAGE Business Cases . SAGE Publications: SAGE Business Cases Originals. U.S. Census Bureau (2004). Educational Attainment in the United States: 2003. Suitland, MD: Census.gov. Zerman, Z. (2021). Tuition Prices are through the Roof. .

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