All TCU. All the time.

TCU 360

TCU 360

All TCU. All the time.

TCU 360

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Your View: Tuition increase indicative of real world

John Parker, a junior entrepreneurial management and finance major posed some excellent questions of TCU in his letter printed Feb. 10. I’m not an official voice for the university, but I can shed some light on a few of the issues he raised.”I am very supportive of all the initiatives the university is taking to enhance the value and quality of education, but I am not benefiting from any of it – so why am I having to pay for it?” Parker said.

It’s true Parker will not directly benefit from improvements TCU is making right now. But his TCU experience has been considerably enhanced by previously implemented improvements paid for by students who were here long before him. One example is the University Recreation Center, which drove Campus Recreation to expand its staff and program offerings. Another example is the entrepreneurial studies program in which Parker participates. Past students paid to implement these things so that current students can enjoy them.

On the surface it may sound unfair, but it’s the way the real world works. Property owners who have no school-aged children (or no children at all) still have to pay property taxes to support public schools. Car owners who don’t drive on interstate freeways (such as my elderly mother-in-law) still have to pay vehicle taxes for freeway upkeep and improvement.

Many things in life work that way. Sometimes you just have to regard the cost as your contribution to something larger than yourself and move past the question, “What’s in it for me?” Parker’s question wasn’t raised in that kind of self-absorbed spirit. The context of his letter makes it obvious he was looking at the bigger picture. I would just challenge him to look a little further.

“As a business owner, if I raised my prices for goods or services without providing any direct value to the customer I would go out of business very quickly. TCU doesn’t play by the rules of most businesses,” Parker said.

Parker is absolutely right, TCU doesn’t play by the typical rules of business. In fact, higher education in general doesn’t. This is best explained by Dr. Gordon Winston, Emeritus Orrin Sage Professor of Economics at Williams College, an expert on the economics of higher education:

“A normal, for-profit business sells its goods at a price greater than the cost of production. Colleges and universities sell education at a price substantially less than the cost of production. Every student – every ‘customer’ – is subsidized by his college. His tuition doesn’t even come close to paying the full cost of producing his education … It’s as if the Taurus that cost your Ford dealer $20,000 to put on the showroom floor were sold for less than $7,000 – regularly and routinely. Clearly, no ordinary Ford dealer would survive.”

At TCU, even if you pay full tuition, you’re still getting a 40 percent discount on the cost of your education. If you receive any kind of financial aid, the price is discounted even further. When all discounts are factored in, the average student at a private university pays just 32 cents on the dollar toward the actual cost of education. At public universities, that price falls to 13 cents on the dollar.

Dennis Alexander is the Director of Foundation Relations at TCU

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