10 Reasons College Costs So Much

Dysfunctional Governance
Students visit the financial aid office at Northeastern University in Boston. The competing interests of the individual colleges often prevent a university from making necessary budget cuts. © Rick Friedman/Corbis

Colleges and universities have dozens of academic departments, often across several schools, plus multimillion-dollar athletic programs, student services, research divisions and much more. Can you imagine what it takes to govern such a sprawling modern institution?

The typical American college operates under the principle of shared governance, under which the various schools and departments each have their own deans and department heads that coordinate with a central authority of top-level deans, the president and the board of trustees. But often those separate entities don't share the same priorities. The board of trustees might want to cut an expensive program, but the faculty and academic deans will argue the importance of the program to research and attracting grant money. The faculty might want to cut back on expensive athletic programs, but the president relies on donations from alumni who love the football team. The result: Nothing gets cut.

When it comes to the tuition crisis, it also appears that the folks in charge aren't getting the message. According to a 2012 report by the Association of Governing Boards of Universities and Colleges, most board members (55 percent) recognized that college was becoming too expensive, but 62 percent also believed that the price of their particular institution was just fine [source: AGB]. Oh, the irony.