Inflation: A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. – American Heritage Dictionary
In 1966, gasoline at the pump was 33 cents.
A new Ford car was about $2,800, and so was a Chevy.
A gallon of milk cost 99 cents.
Tuition at Northern State College was $9.50 per credit hour.
Today, gasoline is less than $2 but it won’t last. Adjusted for inflation since 1966, the price at the pump would be $2.41, and it will be again, and more.
That Ford or Chevy is somewhat higher than the Consumer Price Index adjusted $20,800, but you can still buy a new car for that price.
Adjusted for inflation, milk would be $7.24, so at $3, it’s a great bargain.
And tuition at NSC today is $139 per credit hour; adjusted for inflation, it should only be $69.50. And that’s just half of the story. Fees, virtually non-existent in 1966, are nearly equal to tuition.
Salaries are up, as are course offerings, but that’s only part of the puzzle. Wesley Tschetter, VP/finance at South Dakota State University, has been looking at the numbers for decades.
His take: Universities have taken on costs that weren’t even contemplated in 1966. Examples: State employee health insurance, Title IX in athletics, requiring equal treatment for women; handicapped accessibility, self-insured buildings for fire and other events, disability services, affirmative action and minority services, student and accounting systems on computers to keep up with federal law, energy costs that reflect design inefficiencies of 50 years ago, and retirement systems that today require 6 percent of payroll to match employee 6 percent contribution to the state.
University of South Dakota President James Abbott thinks a key factor has been the shift in funding.
“If my memory is correct, 50 years ago, the state of South Dakota funded 60-65 percent of the cost of a college education and the students paid 35-40 percent. The situation is now reversed. Approximately 28 percent of our budget comes from the state of South Dakota. And, while federal and other sources of funds have increased over the years, the student is now responsible for the majority of the cost.”
Northern State University President James Smith concurs: “As state funds decline, students must pay more. Our operating costs, like any household in South Dakota, do not get less expensive to run annually; actually, the opposite is almost always true.”
Tuition for in-state students used to be less than in surrounding states. That is no longer true.
Feb. 10, 2016