昼夜英文翻译格式范本

2021年1月15日发(作者：臧坤)
张紫瑶 1320110628 13会计（ACCA方向）01班
英文资料翻译
Rigging the Price for Higher Education

John S. Barry

There is no question that the cost of a college degree is increasing rapidly. An oft-cited 1996
study by the General Accounting Office found that tuition and fees at public institutions have
increased some 234 percent since 1980 while family income and the general inflation rate have
increased only about 80 percent over the same at private college and universities
have fared little better, increasing more than 220 percent.
Many reasons have been given for the increasing costs of higher edition. Some of the most
persuasive include the increased demand for colleges degrees, higher overhead costs associated
with increased faculty research, rcent reductions in state support of public institutions,and federal
student aid programs that indirectly subsidize schools. These all are important factors that
increase costs; however, there is another reason not. often mentioned. Colleges and universities,
particularly elite private universities exercise a certain degree of monopoly power that allows
them to charge each individual student a higher price than would be the case otherwise.
This article addresses each of the reasons for increased costs. However, the emphasis is placed
on the last one, the monopolistic power of schools.

The Reasons for Increasing Costs
Increased value of a college degree. The most important reason college costs have escalated is
that the value of a college education has increased. In fact, according to the General Accounting
Office the average college graduate earned about 43 percent more than the average high school
graduate did in1980. Today, the difference in earnings between these same two groups is more
than 70 percent. Therefore, more and more families are finding it necessary to succeed in the,job
market. At the same time，the college age population in general has increased. This increased
demand for higher education has driven up the price of college just as increased demand for any
commodity drives up the price if that demand is not met with a sufficiently increased supply.
Increased research at universities. Another factor affecting tuition costs at many colleges and
universities is an increased emphasis on research. The prestige of a college or university today is

1
张紫瑶 1320110628 13会计（ACCA方向）01班
英文资料翻译
largely a function of the publishing prowess of the institution's professors. Publishing requires
research, which requires time. This means that professors are doing less teaching and more
research. Fewer hours at the lectern for each professor means either that course and class
selection are reduced, which forces students to take longer to finish a degree, or that more
professors are required on staff, which forces the institution to spend more for salaries. Charles
Sykes made this point in his excellent 1988 book, Pro/scam. Either way, the result is higher fixed
or overhead costs, which typically are passed on to students and parents through higher tuition
and fees.
Reduced state funding for public institutions. In addition, the current era of fiscal austerity in
government has meant slower growth in state budgets, which often has meant slower growth in
financial support of public ing to Dpartment of Education statistics,state
government funds accounted for 46.3 percent of public institution revenues in 1980. By 1993
that figure had dropped to 36.8 percent. Increased tuition has been the only recourse for public
institutions simultaneously faced with increased demand and shrinking state support.
Federal programs that facilitate family debt. Federal programs meant to assist students facing
steep college costs have themselves added to the rise in tuition. Starting with passage of the
Higher Education Act of 1965, the federal government has guaranteed student loans extended by
private Student Loan Marketing Association (Sallie Mae) was established in 1972 as a
government- sponsored enterprise to establish a secondary market in stu dent loans. In addition, a
limited direct government loan program was estab lished in 1993. These loan programs not only
facilitate indebtedness, but also boost the scale of that indebtedness by encouraging steeper
tuition in creases. As Thomas Donlan recently wrote in Barron’s magazine, ulty and staff
can vote themselves higher salaries and more resources if the only consequence is that students
and parents just have to sign on the dotted line to borrow some more money.
assistance so readily available, schools have no incentive to control the costs of education.
Schools as monopolists. Increased demand, increased research, and reduced state funding all
affect the price of a college degree-the advertised tuition that a school charges.
However, federal programs (and to a lesser extent private scholarships and institutional aid) that
subsidize students directly affect not only the sticker price of college but also the actual price
paid by a student and his family. Most students and their families do not pay the full sticker price

2
张紫瑶 1320110628 13会计（ACCA方向）01班
英文资料翻译
just as few people pay the full sticker price for a new automobile. In fact, thanks to subsidized
loans, institutional scholarships, state subsidies, and federal grants, schools can usually get away
with charging each student a different price. Thus, the same education typically costs every
student a different amount.
The ability to charge different students different prices is known in economic terms as price
discrimination. Only firms with monopolistic power are able to engage in price discrimination.
The result of price discrimination is that colleges are able to charge each student exactly as much
as he or she is willing to pay. While this may seem fair and financial aid is often touted as

even those with low incomes. To understand this important first to understand the basis of every
economic transaction takes place in the marketplace.
Everyone who takes part in any economic transaction does so because he believes he will be
better off after the deal than he before. Why otherwise should engage in the trade? For example,
if you, the student, decide a semester of classes at a particular school for$$10,000 then decision
that at present that semester of classes is worth more to you than holding on to the$$10,000. If this
were not the case then you would be better off holding on to the cash or making another purchase.
The extra value you receive from that transaction-above and beyond the$$10,000 paid-is known
as your consumer surplus.
The university is making exactly the same calculation on the other side of the the
transaction transpires then the school has obviously decided that the$$10,000 in cash is more
valuable than not spending the time and resources to offer the classes. The excess value on this
side of the ledger is known in economic terms as producer surplus. This example helps illustrate
that a transaction will transpire only when both the purchaser and the seller receive some surplus
value from the deal and conversely, an economic trans action will always occur if there is a
surplus to be gained by both the consumer and the producer.
Of course, the actual amount of surplus enjoyed by the consumer or producer is difficult if not
impossible to measure in most individual market transactions. However, it generally is true that a
consumer will receive a greater surplus in a competitive market (one served by many
producers) ,than in a monopolistic market (one serverd by a small number of producers) and a
prducer will enjoy a larger surplus in a monopolistic market. This is because in a competitive

3
张紫瑶 1320110628 13会计（ACCA方向）01班
英文资料翻译
market the consumer can switch from one producer to another if he is unhappy with the level of
surplus he is receiving. Competition among producers lowers prices and thus increases consumer
surplus at the expense of producer surplus. Firms that have monopolistic power, however, need
not compete with other producers as much and are able to retain a larger surplus for themselves.
In short, monopolistic producers have the luxury of determining exactly how much an individual
will pay for their services and charging precisely that amount. Consumers have little choice but
to pay the monopolist's price.
What, then, is the lesson for higher education? Colleges and universities have greater
monopolistic power today than ever before. This fact came to the forefront in 1991 when a group
of Ivy League schools were investigated by the Department of justice for collusion in setting
their tuition prices. In short, these schools agreed that they would no longer offer merit-based
scholarships and would offer financial aid on the basis of need only. Thus, the schools involved
agreed to end economic competition for talented students. The Department of justice broke up
the Ivy League cartel. However, this has not put an end to the exercise of monopolistic power by
schools of higher learning.
In fact, the power of the monopoly has spread beyond a small number of elite institutions and
has been widely adopted by more ordinary colleges and universities. In part, this expansion is
attributable to a failure to meet the increased demand for higher education with a commensurate
increase in supply. It is difficult to build a new college or university. And so the same number of
schools is serving an increasing number of students. This will eventually even out as new
colleges are created and gain a reputation in the marketplace, but that will take time.
More directly and concern is that federal student aid has enabled monopolistic by schools.
Colleges and universities are able to increase the sticker price beyond the reach of most students
and then reduce the actual price charged individual students by offering them various bundles of
financial aid. Thus, each student is offered a different price that matches almost exactly what he
or she is willing to pay. The result is that the student's (consumer) surplus is decreased and the
school's (producer) surplus is increased. In the end, students will benefit less from the education
because colleges and universities have captured more of their consumer surplus. This
consumer surplusmay be a greater percentage of the family's income than would have been
paid under competitive circumstances. Or, it may mean that the student receives a lower- value

4
张紫瑶 1320110628 13会计（ACCA方向）01班
英文资料翻译
education (from his or her perspective). For example. the student may have to endure large class
sizes or more graduate student led classes.
Additional producer surplus means that schools may engage in activities that would not be
possible in a competitive market. For example, schools may be able to operate academic
programs that advance a certain political agenda favored by the school's administrators even if
that agenda has been discredited in the real world. The existence of an educational monopoly
may thus help explain why so many schools continue to preach the benefits of communism
despite that political and economic system's complete failure in the former Soviet Union.
Similarly, unreal are the lavish remuneration and perquisites that schools offer certain
administrators and tenured faculty. In a less manipulated system,competition would discourage
such excesses. All of these activities benefit the school establishment at the expense of students.
Despite the obvious fact that more students will be worseof given the monopolistic power of
universities, some believe that a system of tiign sticker price and redistributive financial aid is
socially beneficial because it helps those students from low income families. However appealing
this may sound, it is simply untrue. Remember that the nature of any monopoly (in this case
colleges and universities) is to reduce the consumer surplus of all customers not just the wealthy.
This hypothesis has been borne out by the data. David C. Rose and Robert L. Sorensen in a
1992 article in the Southern Economic Journal found “that while institutions that appear to inf
late their tuition do make larger aid awards, their awards are not large enough to reduce the
average net price paid by needy students.” What is more, the University of St. Louis economists
found that revenues from high tuition rates are actually expended on increased administrative
overhead, faculty salaries, and stipends for graduate students, rather than lower tuition costs for
needy students. Again, the beneficiary of monopoly power is the school and not student.

Implications and Conclusions
Most of the factors driving up college costs are natural market forces and, left to themselves,
they will produce the most efficient and socially beneficial outcome. The value of a college
degree that has led to increased demand for higher education eventually will be met by increased
supply. When that happens we can expect to see tuition prices fall naturally.
Similarly, an overemphasis by universities on research will be corrected as students seek out

5