Do we need a czar for college tuition?

The Chronicle of Higher Education reports* that $50,000 is quickly becoming the typical cost for a year at one of the nation's elite colleges:

Fifty-eight private colleges now charge at least that much for tuition, fees, room, and board, a Chronicle analysis of College Board data shows. Last year only five colleges did.

Talk about sticker shock. Could it be time for Kenneth Feinberg to decide how much colleges are allowed to charge?

Members of what the Chronicle dubs the "$50K Club" include Sarah Lawrence ($55,788), Georgetown ($52,161), NYU ($51,993), Johns Hopkins ($51,690), Columbia ($51,544), Wesleyan ($51,432), Washington University in St. Louis ($51,329), Bates ($51,300), Vanderbilt ($51,228), Tufts ($51,088), University of Chicago ($51,078), Claremont McKenna ($51,035) and the University of Southern California ($50,732). Some universities you might expect to make the list—Harvard, Princeton, Stanford—don't.

Now, there are some caveats, including the fact that sticker price can be quite different from what a family winds up paying:

Many students receive need-based grants—often from the colleges themselves—or merit-based scholarships and other discounts... The Chronicle analyzed College Board data to calculate the average grant offered in 2008-9 by 42 colleges whose list price for tuition, fees, room, and board was more than $50,000 this year... Among the 42, the average grant per full-time student was just over $13,000. That means that the average bill last year for tuition, fees, room, and board, after grants, was about $36,000.

Although if what colleges are doing is jacking up the price and then jacking it back down for families who can't afford it, what we're left with is a tax on the rich—or on people who scrimped and saved every penny for 18 years in order to be prepared for this day. You decide if that's something you want colleges to do.

And even at $36,000, we're still talking major money. I could get into some fancy calculations about how the cost of a top-tier college has risen faster than costs in general, but it's more fun to share a rule of thumb that was used by people setting tuition before the 1980s: a year of private education should cost about the same as a new Chevrolet. Today, a year of college costs about the same as two or three Chevrolets.

What's behind the drastic change? It would be neat and clean to say supply and demand. After all, more and more high-school graduates go to college, and plenty has been written about the escalation in competition for slots at the most-elite universities, which aren't increasing as fast as the number of people wanting them.

But here's another idea: what if college costs more because students get more?

That's what education economist Caroline Hoxby finds to be the case in a paper in the Journal of Economic Perspectives. Jumping to the punchline:

Over the 1967 to 2007 period, the average annual growth rate of tuition paid was 6 percent at the most selective colleges, but the growth rate in their resources was 13 percent and the growth rate in their subsidies was 25 percent!

Those growing resources include instruction, student services, academic and institutional support, and "operation and maintenance of plant." Subsidies are simply the difference between money spent on students and the tuition they pay.

In other words, once you take into account what you get for your money, college is actually a better deal than it used to be. Ready to sign that $50,000 check now?

Okay, maybe not. Because whether or not you want everything you're paying for is a different question. State-of-the art classrooms and more professors for each student sound great—but are you interested in tossing in another $10K to pay to build luxury dorms and Olympic-quality athletic facilities? For $50,000, you get a whole lot more than an education.

Barbara!

*The Chronicle of Higher Education has managed to keep its pay-for-content model on the Web. Good for the future of quality journalism; bad for people who want to see the whole story without ponying up for a subscription. To look at a free copy, I suggest paying $50,000 to enroll in an elite university, which will almost surely have a copy in its library.