[ music ] This program is brought to you by the members of WCNY.

Thank you.

[ music ] [ music ] KATKO: Welcome America to "Balancing Act," the show that aims to tame the political circus of two-party politics.

I'm John Katko.

This week, the high cost of higher education-are the costs justified, or should the government step in?

In the center ring, we'll ask Mark Kantrowitz, college financial aid expert, Professor of Education Robert Kelchen, and Economics Professor Chad Barber to debate the issue on the trapeze.

Plus, I'll give you my take, and from Bloomberg News, Michelle Michelle Jamrisko is here with what's happening next week in Washington.

But first, let's walk the tightrope.

[ music ] It doesn't take a degree in economics or rocket science to realize that the cost of a college education in the US is out of this world.

According to bestcolleges.com, the average cost of attendance-tuition, fees, housing, food, supplies, and transportation-at a public in-state, four-year university is roughly $29,900 a year.

For a private institution, it jumps to about $63,000.

Among the most expensive schools, Pepperdine in Malibu, California, comes in at a staggering $93,500 a year.

Yes, financial aid can drastically reduce those numbers, but you get the idea.

It wasn't always this way.

Higher education in America began almost 400 years ago when schools like Harvard were founded to train ministers and civic leaders.

For centuries, college was limited to a very small, elite portion of society.

That changed with two big turning points.

First, in the 1800s, college expanded beyond the privileged few when the Morrill Land Grant Acts helped create public universities focused on agriculture, science, and engineering.

Second, after World War II, the GI Bill paid tuition and living costs for returning veterans.

Public universities boomed, community colleges multiplied, and tuition stayed low.

In the 1960s and '70s, many students could pay for a year at public college with just a good summer job, but starting in the 1980s, things began to change.

According to Forbes, the average cost jumped 169% since 1980, when the typical private college cost around $5,000 a year.

Why the increase?

More campus amenities, larger-some say bloated-administrative staffs, expanded student services, and cutting-edge technology were some of the reasons.

And importantly, less state funding to help carry the load.

So how do U.S.

colleges compare to those around the world?

On cost, well, we're failing.

A global review shows American colleges are among the most expensive anywhere, but on quality, we make the grade.

According to the 2025 Key West World University rankings, four of the top 10 universities in the world are in America, including Caltech, Harvard, Stanford, and coming in at number one, MIT.

Supporters argue that is what you're paying for-world-class research, opportunity, and networks you can't get anywhere else.

Critics say, sure, but only if you can afford the price of admission, and the public is taking notice.

A 2024 Pew survey found that only 22% of Americans believe a four-year degree is worth the cost if loans are required.

Nearly half say it's only worth it if you can avoid borrowing, and 29% say it isn't worth it.

So how do we maintain world-class universities without bankrupting our students?

Maybe we can learn a lesson or two from our expert in the center ring.

[ music ] KATKO: Joining me in the center ring is Mark Kantrowitz.

Welcome, Mark, and let's get right into it.

The development over time as to the cost associated with college tuition-could you set the table for us with that?

KANTROWITZ: Well, most recently, the full cost of attendance, which includes not just tuition and fees, but also room and board, books, supplies, and equipment, transportation, is $55,000 on average at a nonprofit four-year college and a little bit less than half that, $31,000, at an in-state public four-year college.

But there are some colleges that are charging more than $100,000 for the first time.

So costs have definitely gone up.

Over the long term, the tuition at a public four-year college in-state has doubled over the last 30 years.

So college costs go up; they rarely go down.

KATKO: So, Mark, what are the factors going into this rapid increase in college costs, which I presume-or I've read-it's gone up much higher than the rate of inflation.

Why is that?

KANTROWITZ: Well, the college costs are based on a mix of factors that are different than the consumer price index, which is based on what people pay for food, housing, clothing, medical care.

College costs are much more reliant on faculty and staff salaries, the facility costs of buildings, the energy costs, and the equipment costs, and all of those factors tend to go up faster than the consumer inflation rate.

KATKO: So, Mark, let's talk about a couple of those things.

Professors and the cost of professors to start with and then the arms race, if you will, with respect to amenities and facilities for students.

KANTROWITZ: So the cost of faculty salaries varies significantly by the type of college.

Many colleges have cut back on faculty salaries by hiring adjunct and part-time faculty who don't get benefits and who are paid much less than the faculty at the most prestigious institutions.

In many cases, much less than six figures.

So your cheapest option is usually going to be at that in-state public college or even a community college.

And you get just as good quality education at a four-year public college as you would get at most of the private nonprofit four-year colleges.

But the staffing has increased in part because of lots of mandates or things that the colleges need to provide to improve the outcomes for the students.

And that keeps on going up, and the salaries keep on going up.

Many faculty could make more money going into private industry than they make at a four-year college.

KATKO: So what about the amenities component?

It seems like colleges nowadays are much more higher-scale living conditions for the students.

And when I was in school, that's for sure.

KANTROWITZ: Well, I mean, it tends to be exaggerated.

I mean, certainly there are these lazy river swimming pools at a handful of colleges, but many of these colleges don't even have air conditioning in the dorm rooms.

So they may have it in the dining halls, but not in the dorm rooms.

So it's not exactly luxury living.

You usually have communal bathrooms instead of private bathrooms, and your dorm room, if you are lucky enough to get a single room as opposed to having two, three, or four roommates, is the size of a box stall.

So, and the beds are these weird, very narrow beds that if you happen to be very tall or you move around when you sleep, you'll fall off of the bed.

KATKO: Yeah, my parents called that character building when I was there and complaining of those things.

Listen, let's talk more about what you're really well-versed in and that is the resources available.

So you may think college costs are X, but what's an actual cost for most students and what are the different types of loans and financial aid that are available to them?

KANTROWITZ: So there are three main types of financial aid.

There are grants and scholarships, otherwise known as gift aid.

It's money that doesn't need to be repaid.

Then there is student employment, like Federal Work-Study, where you work a number of hours and get some money to help you pay for your college or pay for walking-around expenses.

And then there are student loans, which have to be repaid, usually with interest.

And that's combined to provide financial aid.

Most students, the majority of students, pay full freight.

It's only at the most generous colleges, like MIT and Harvard, where if your family earns less than $100,000, you're getting a free ride and if they earn less than $200,000, you're getting free tuition.

At most colleges, the financial aid is very limited, usually just federal and state aid.

Sometimes the colleges provide a discount, especially at the higher-cost colleges.

They have a high-cost, high-aid model where they charge you a lot, but they also give you around half of that back in the form of financial aid.

But you're still paying more than at an in-state public college.

So the total number of scholarships that are awarded by private organizations is about 2 million a year, about $6 billion total, which is a drop in the bucket compared with the over $100 billion cost of college education.

In some cases, you could actually count it as several hundred billion dollars cost, so you end up having to pay a lot.

Families pay for college through a combination of past, present, and future income.

Past income is savings.

Current income and financial aid is about a third of the cost, and student loans are future income.

And the more you save, the less you have to borrow.

The more you win in scholarships, the less you have to borrow.

But most students will not be able to avoid graduating with student debt.

The average student debt is over $30,000 for a bachelor's degree recipient.

KATKO: So, Mark, we got about 30 seconds left, and I want to ask, just from a comparison standpoint, the net cost of a college education in the U.S.

compared to most of the industrialized nations - how do we compare?

KANTROWITZ: It's more expensive.

There are two dozen countries where they don't charge tuition at all.

I mean, you still have to pay for room and board, but you don't have to pay for tuition.

And some of them even provide free tuition to U.S.

students, not just their local students.

KATKO: Mark Kantrowitz, college financial aid expert.

Thanks so much, and now it's time to take this to the trapeze.

[ music ].

On the trapeze this week, a professor of education at UT Knoxville, Robert Kelchen, and professor of economics at Colgate University, Chad Barber.

Welcome, gentlemen, and let's get right into it.

Robert, I want to start with you first.

What are the main contributors to the rise in costs of college education?

KELCHEN: A lot of it is driven by people.

When students go to college, they want to have classes with faculty, they want to have supports available, things like advising, library, and all the things that go into the college experience.

And students don't really want things like larger class sizes.

They don't want fewer services, and we're personnel-driven.

People are expensive, and even if they aren't getting pay raises, things like health insurance costs are going up.

Maintenance costs are going up.

And all those are driving up the operating costs of running a college or university.

At the same time, tuition increases that largely went unchecked for decades really started getting checked about a decade ago.

And that's what puts colleges in a difficult financial squeeze.

KATKO: Chad, your take?

BARBER: Yeah, I mean, when you think about how technology affects the market, you know, technology really hasn't replaced, as Robert said, this need for interaction between people.

Complicated ideas require face-to-face communication for idea exchange.

And so, whereas in some sectors of the economy, technology has decreased the cost of operation, in a lot of ways, technology hasn't replaced the need for professors and so forth.

And so that's added to some of the costs.

A lot of people, I think, would also propose that costs are rising because of the explosion in student services, and that's a much more complicated issue.

Frankly, a lot of people actually support some of those services.

KATKO: It seems like parents and students are expecting more amenities and more of the creature comforts.

Is that contributing to the rising costs?

KELCHEN: It's a component at the most selective, wealthiest universities.

It's a larger driver than at many smaller colleges.

But when I went to college, air conditioning wasn't a thing.

And when students and families look around, they look for things like that, especially those students who have greater ability to pay closer to full sticker price.

And that forces institutions to try to compete on amenities as well as on academics.

KATKO: So, yeah, let's get into that from a value standpoint, I think we can all agree college costs have risen exponentially since the '80s, but what's the value component?

Why should people still be going to college?

What's the incentive for that?

BARBER: Well, the incentive is the same that it's always been, is that, you know, it is a pathway toward better economic opportunities.

You know, that might vary depending on the quality of the institution you go to and the quality of the major that you choose to major in.

But, you know, I'm more or less a first-generation student myself and used nine years of college education to get a PhD and advance my socioeconomic status.

That American dream is still very much alive, and a college education is still the pathway to that.

KELCHEN: Yeah, the college education by and large pays off.

The challenge is it pays off a lot more if you finish your degree, and the benefits do vary somewhat based on what field of study you choose.

But the problem we have is that those benefits accrue over a lifetime, while you're paying the costs either upfront or you're taking out student loans that you'll pay out over 10 to 20 years.

And that increase in the price that happened largely between the '80s and mid-2010s really did strain students' and families' budgets.

KATKO: Yeah, it does seem like it's gone up.

In fact, the statistics show that it has gone up much higher than the rate of inflation over the last several decades.

So that does have a long-term effect.

So the question I have is, do you have any sort of solutions as to how to address this?

I mean, we noted in an earlier segment that one of the universities in this country is close to $100,000 a year to go to school.

How do we address trying to keep the costs under control?

Are there proposals out there that make sense?

KELCHEN: That's a challenge because in order to bend that cost curve-and we face the same issue with something like healthcare-it's either someone else is paying for you, or you're giving up services, amenities, or quality.

If we wanted to reduce the price of tuition, we could dramatically increase government funding, or we could do things like drastically increase class sizes to where students pay less, but then they'd be just one person in a 400-student lecture hall all the time.

And that's where things get challenging, because everyone wants a really high-quality experience, and they would prefer that someone else pay for it.

BARBER: I'm a big fan of the transparency argument, that effectively, students and their families don't really know the true cost of a college education or the true benefits of a college degree until after the admissions process, the admissions decision, and after enrollment.

And so the better equipped those students and families are to understand the true costs and benefits before making the decision to enroll at a university, the more that these universities will be competing on price to attract students.

KATKO: So, Chad, there have been some proposals-in fact, I think some states have implemented, as we noted earlier-caps on how much tuition can grow in a given year.

What do you think about that?

BARBER: Economists, whether you're left, right, or center, are almost universally against price controls because they distort signals in the economy about what consumers want to buy and how much it costs to provide those services.

So to get on board with something like that, you'd really have to argue that universities are operating in something like a monopoly-type condition, and that other solutions aren't available.

And to that end, you might be able to argue that universities have near-monopoly power once a student enrolls.

But again, that's why I say if you increase transparency so that students know what the costs and benefits are before they choose to commit to a university, we'd be in much better shape.

KATKO: So, Robert, what do you think about using caps?

>> About 30 states already do so for public colleges and universities, and they've done a little bit to help keep tuition increases down.

The challenge then becomes where do colleges find the money they need to operate?

Do they try to find more out-of-state or international students paying full price?

Do they try to cut costs?

Do they just borrow money from different sources?

And it's also worth noting that the Trump administration, in their proposed higher education compact, is trying to get all the institutions to freeze tuition for five years without providing a revenue source to do things like pay for health insurance when that keeps going up.

KATKO: See, Robert, I want to stay on that thread for a minute.

The funding that colleges get from the federal and state governments as a component of keeping the costs down-has that increased, decreased, or remained static over the last few years?

KELCHEN: Federal funding for students has been fairly steady in terms of inflation over the past several decades.

But it's been down over the last decade, as we've seen fewer students go.

State funding is at about a 20-year high right now, and that's likely to go down as states face tighter budgets.

So there are a lot of complaints about the government not funding higher education, and that was true at some point, but it's less true now.

KATKO: And, Chad, let me follow this up with you as well.

Are you confident, given our structure and our increasing costs, that we can still compete on the world stage with other universities who seem to have costs better under control?

BARBER: Yeah, I'm confident about our ability to compete.

On that question, I'm more worried about federal-level decisions to sort of discourage foreign students from entering our universities.

I think that our university system is one of our country's greatest strengths.

And so to turn people away, to basically close off education as an export industry, is kind of shooting ourselves in the foot.

KATKO: Yeah, of course, if they don't come here, they end up competing against us back home, right?

So we don't want that either.

BARBER: 100%.

KATKO: So, Robert, are there any alternative paths to economic success?

I mean, can you get there without college?

KELCHEN: You can.

The best options tend to be in the skilled trades, doing an apprenticeship, which is a great idea, but there aren't that many spots.

And if you want to go be an expert in something like welding or construction, in many cases, the way to do that is through one of our community and technical colleges.

Not everyone necessarily has to have a four-year degree, but some kind of training after high school, whether it's through a college, a technical institute, or through, say, an apprenticeship, is crucial to economic advancement.

KATKO: Robert Kelchin, Chad Barber, thanks so much.

There's an old saying that college just isn't for everyone.

That may be true, but one reason shouldn't be its astronomical price tag.

While Washington debates national fixes, the smartest solutions are often happening closer to home.

In Tennessee, for example, state funding is tied to graduation and job placement, so more students finish on time without tuition blowing up.

Maryland caps annual tuition hikes to prevent sticker shock, and Western Governors University uses a flat-rate model to take all the courses you can, finish faster, pay less.

That is important because America needs a well-educated society to compete on a world stage.

Loan forgiveness would help many people, for sure, but is it fair to those who already paid back their loans, or those who skipped college entirely because it was too expensive?

And let's tap the brakes on the campus resort trend.

Students don't need a lazy river.

They need an affordable path to a good job.

Washington has a role, but the real breakthroughs are happening state by state, campus by campus, and that should be encouraged to a greater degree.

And that's my take.

[ MUSIC ] KATKO: To get educated on what's happening next week in Washington, we turn to Bloomberg's White House and National Security editor, Michelle Jamrisko.

Welcome, Michelle, and tell us what's going on next week?

JAMRISKO: Thanks, John.

We'll continue to track a number of geopolitical fires across the landscape next week.

Foremost, ongoing developments in Venezuela, where dozens of U.S.

boat strikes could escalate into more land action there that we are expecting has been threatened somewhat in order to sort of forcibly remove the Venezuelan leader, Nicolas Maduro, from the regime.

We'll see where that takes us.

At the same time, we're also tracking developments in the Middle East, where there's a fragile negotiation to keep the Gaza ceasefire on track.

It's going to get even more sticky going forward.

And in Ukraine, we're at somewhat of a stalemate with the negotiations to end Russia's war there.

Trump is openly dissatisfied with both leaders and seems to have been pushing more pressure on Zelensky to make a deal to end that war recently.

So all this, though, John, to steal the name of your show, is an impossible balancing act for Trump, who has self-branded as the president of peace.

He's pushed this sort of Reagan-esque "peace through strength" strategy for the military.

And at the same time, his MAGA base especially is shouting back, "Focus inward, look back at your America First slogan, look at domestic priorities like affordability, the cost of living," things that have hammered Trump politically in the past month or so, especially with those elections early November that kind of showed where the American voters are at and criticizing where Trump's focus is at this point.

So all that kind of coming to a head this week where we saw the President start some more domestic trips to kind of campaign on what he's touting as a solid economy.

We'll see if the voters hear that, but at the same time, you can't stop these fires from raging geopolitically.

KATKO: Yeah, it seems like with respect to Ukraine, at least, that Trump is either going to force Zelensky to take a bad deal or no deal.

It seems like a no-win situation there.

But, you know, I want to talk for a second about Venezuela because not as many Americans really appreciate what's happening there.

Can the president start a war there?

Can he start an incursion there without approval from Congress?

JAMRISKO: Well, you know, the legality questions certainly have come up time and again during this and the previous Trump administration, really, but more so this year.

And so, John, I mean, I would just say, nothing is impossible right now.

I mean, certainly a lot of the actions that have been taken thus far, especially with regard to Venezuela, have come up as, you know, potentially illegal, but certainly questionable.

And lawmakers, where you used to reside on the Hill, are certainly questioning that and pushing back, even members of Trump's own party, including Senator Rand Paul.

So it's unclear whether that will go forward and whether it will stand the test of legality, but certainly a lot of questions swirling on the Hill to that effect.

KATKO: Michelle Jamriski, Bloomberg News.

Thanks so much, my friend.

That's all for this week, folks.

To send in your comments for the show, or to see "Balancing Act" Extras and exclusives, follow us on social media or go to BalancingActWithJohnKatko.com.

Thank you for joining us, and remember, in the circus that is politics, there's always a Balancing Act I'm John Katko.

We'll see you next week, America.