Why is college tuition in the US rising so much faster than the rate of inflation?

For a bunch of reasons. Name-brand schools like Harvard can charge whatever they want. There will always be plenty of people willing to pay whatever Harvard charges, because they value the school’s cache so highly. At the same time, there’s little price competition among traditional colleges and universities; because there is no objective measure of quality in higher education, cost becomes a proxy for quality, and schools with higher tuitions are assumed to be better than less-expensive ones (online colleges are competing on price, and it will be interesting to see how far they push traditional bricks-and-mortar campuses to respond). There has also been an expensive arms race among colleges trying to lure students with fancy sports facilities and dorms that could pass for high-end hotels, and schools pass the bulk of these costs on to students. And there has been a big increase in the number of counselors and other support and managerial staff on many campuses, while faculty productivity is low: most teach only a couple of classes a semester. But for many students, the price of college is less daunting than it may seem: many colleges and universities offer discounts from their sticker prices to athletes, musicians, kids with high grade-point-averages and other students that they want on their campuses.

You’ve criticized the American tendency to rank colleges more by factors stemming from their wealth and prestige (like alumni giving rates) than on how well they teach students — to the point that colleges refuse to make public their rankings in a study that measures learning. Why, in a supposed meritocracy, is there no clamoring to change this?

There are several reasons. The fact that cost is a proxy for quality in the minds of many consumers weakens consumers’ demand for evidence of how well colleges and universities educate their students. The college rankings published by U.S. News and World Report and other organizations that have set the standard for consumer information in college admissions don’t focus on teaching and learning. And we’re still not as much as a meritocracy as one might hope. That said, calls for greater accountability in American higher education have begun to radiate from public policy experts.

A decade ago, the US was tied for first place in the world for the percentage of 25-34-year-olds holding at least a bachelor’s degree, according to the Strong American Schools. By 2005, we’d dropped to seventh. Is our educational system getting worse, or is it just that the rest of the world is catching up?

The rest of the world is catching up. World-wide enrollment in higher education increased from 24 million to 136 million between 1970 and 2005, but the proportion of the world’s students attending U.S. colleges and universities decreased from 29 percent to 13 percent during that period.

Just about everything in American life, even our healthcare, for better or worse, is for-profit. What have you got against for-profit schools?

Nothing, as long as they are accountable to public authorities if they take public monies. There has been a for-profit presence in American higher education for a long time. Originally it served mostly students looking for vocational training. They relied heavily on federal student aid program to pay tuition and there was a lot of fraud and abuse by schools more interested in pocketing the federal tuition monies than educating students. More recently, for-profits have become major players in the online education movement.

If you could give the Obama administration a grade on its education policy performance so far, what would it be?

An “A.” Secretary of Education Arne Duncan has been one of the early stars of the Obama administration. He has generated a lot of momentum for reform on both the public education and higher education front. And with $100 billion in stimulus money, he has a lot of leverage with cash-hungry state and local leaders. The next couple of years are going to be eventful on the reform front.