[ericabiz]

"Where does all the money go to?"

Pensions: http://www.businessweek.com/ap/2012-06-19/university-of-cali... (That's one article about one university system, but most others face similar issues.)

I've said it before and I'll say it again: College has become the most effective means of wealth transfer from Generation Y kids to the Baby Boomers...financed by the government, of course.

[_delirium]

The University of California system has actually decreased its per-student spending in real terms by around 25% over the past 20 years, so there isn't really a case of where the money has gone there (they never got it!). It's true that there are likely to be future problems with pensions, but they don't at all explain the current increases in tuition. Those are due to state funding cuts.

More specifically, if you take the total UC system budget and divide by the total student population, the result for 1990 (inflation-adjusted) was $21,000 spent per student. The result today is $16,500 spent per student.

Tuition has gone up anyway, because taxpayers stopped funding it faster than that rate of per-student cost decline. In 1990, state funding amounted to $16,000 per student (inflation-adjusted) out of the $21,000 total cost, leaving $5000 to be made up by tuition, donations, and other sources of income. Today the state contributes only $9,500 per student, and is in the process of cutting that to $8,500. So even with a more frugal $16,500-per-student cost, that now leaves $8000 to be funded out of non-state funds. So it's not surprising that tuition has gone up significantly.

[anothermachine]

No, Social Security wins that title.