MELISSA BLOCK, host:
Tomorrow on ALL THINGS CONSIDERED, helping students pay for college. And you can find expert advice on finding the right college, getting accepted and paying for it at our Web site, npr.org.
ROBERT SIEGEL, host:
Well, talk about paying for it, the price of a college education, especially at a private college or university, goes up and up. Right now, according to folks who survey these things, the most expensive price tag for a year of tuition and fees, room and board, starting this fall, is just over $50,000. And the leader of the pack, the George Washington University in Washington, D.C.
Joining us from his office is Stephen Joel Trachtenberg, who's the president of the George Washington University. Welcome to the program.
Mr. STEPHEN JOEL TRACHTENBERG (President, George Washington University): Thank you.
SIEGEL: And I really essentially have only one question that I'll artfully phrase in several different ways. But the question is: $50,000?
Mr. TRACHTENBERG: Yes. I think it's important to distinguish price from cost. The cost of the education exceeds $50,000. The price only covers a portion of it. At George Washington University, the tuition reflects the actual cost of the service provided at other institutions. Subsidies are provided by the taxpayers.
We don't have taxing power, and so ours is a more economically driven model.
SIEGEL: Let the record show that the Census Bureau puts the median household income as of 2005 at $46,300 and some. So you're above that.
Mr. TRACHTENBERG: This is true. On the other hand, on the other hand, we provide deep discounts to people who actually come to the university. So for example, while the posted price may be the number you cite, the actual price to individuals is dramatically lower. We provide over $120 million in financial aid to students, and a majority of the students at George Washington University receive subsidies to make it possible for them to actually pay and to keep our socioeconomic mix thorough, from people who are wealthy to people who are financially less fortunate.
SIEGEL: But can you explain -
Mr. TRACHTENBERG: It's worth noting - it's worth noting that we provide $120 million in financial aid, which is comparable to the $120 million provided at Harvard University, and they do it with a $30 billion endowment, and we do it with a $1 billion endowment. So I want to argue that GW is 30 times plus or minus more generous than Harvard.
SIEGEL: Well, in the 1986-87 academic year, the cost of tuition, room and board and fees at GW, George Washington, was $12,795. If that figure had risen by the rate of inflation until now, it would be about $23,000. Instead, it's $50,000. What is it about the cost of higher education that makes it inflate more than twice the rate of everything else?
Mr. TRACHTENBERG: Ours is a handmade service. Actual people craft the education we provide. It isn't manufactured on a machine. Now, in order to attract the very best faculty, we have to compete with industry, with commerce. People who join our business school are constantly being offered opportunities on Wall Street. And so it's daunting for us to keep the very best faculty here and compensate them appropriately. As it is, most of them are making financial sacrifices by comparison to what they could earn on the outside.
SIEGEL: Here's what somebody at the Chronicle of Higher Education wrote a couple of years ago. As costs were rising above $40,000 at some of the more expensive colleges, the writer said, colleges have the bricks and mortar costs of a retail chain, the labor expenses of an airline, the high-skilled employee costs of a law firm, and the rebate costs of American car manufacturers. Read tuition discount. Sound about right to you?
Mr. TRACHTENBERG: Yes. There's much truth to that. Let me just put it in contrast. I have a son who just graduated from law school. He is presently earning $170,000 a year. So let's look at the costs of services from his law firm. Presumably they're getting it back somehow.
I think the comparisons are daunting to make. I mean the economy all around us seems to be loaded with large sums of money. I think the universities by contrast have been careful with their budgets and thoughtful in their investments. The problem we've got is that we continue to run what I would argue are inefficient institutions. And if you were prepared to be more management oriented, you could run universities more economically.
SIEGEL: Yes, if you faced the choice of, say, a tuition increase or more hours teaching for everybody next year, which might be a corporate approach. I assume that you would have been retired even earlier than you are retiring right now…
Dr. TRACHTENBERG: Exactly.
SIEGEL: …from your position (unintelligible).
Dr. TRACHTENBERG: Exactly.
SIEGEL: Unacceptable to do that.
Dr. TRACHTENBERG: Unacceptable. That's right. And interestingly enough, faculty has frequently committed enough that they will reject additional money for the exchange of free time. I, for years, have been arguing with the faculty at GW that we should run a third semester. We could actually do that and increase our enrollment, bring in more money and be able to charge a lower tuition across the board.
The faculty with whom I must do these things cooperatively have consistently disdained that proposal.
SIEGEL: Well, Stephen Joe Trachtenberg, thank you very much for talking with us.
Dr. TRACHTENBERG: Pleasure is mine. Thank you very much. You have a lovely day.
SIEGEL: Stephen Joe Trachtenberg is the president of the George Washington University in Washington, D.C., which at the moment is at the top of the charts in cost for a year of tuition, room and board fees. It's over $50,000.
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