A recent study among faculty and students asked if the cost of higher education is a major issue. Surprisingly, nearly half of the faculty strongly agreed, while less than a third of the students strongly agreed.

The explanation for the large difference was probably due to the way we fund higher education. While learned professors understand the value of money, young students mostly do not. More importantly, students don’t believe that they will pay the advertised price. And of course they are right.

From the student’s standpoint, the university states the price. Then the college or university offer a series of discounts, usually in the form of scholarships, depending on their view of how well the student would fit in at the school. If a student was a star quarterback, for instance, he would fit well at any school with a football program.

Depending on the school athletic department’s judgement of the contribution the student would make to the team, his discount is determined. It could be as high as 100%.

Other more typical students are judged by their academic achievements and other activities that show something about the character of the student. This helps the University ensure a cohesive student body.

Then universities get information about the parent’s ability to pay. With that information, and considering the availability of government money, the university calculates the final bill.

This is the number the student sees. In the end, for many students, their parents are paying some of the cost, the federal government is paying some of the cost, and the school discounts the price to cover some of the cost. Even the final number should never be a burden because the federal government will lend whatever is needed.

It’s no wonder that smaller numbers of students are overly concerned about the cost of college. They are, however, concerned about the value they are receiving.

Many 18-year-olds are questioning the value of higher education. It seems the benefit is not as great as expected and those papers the student signed prior to admission means they are stuck with paying $600 per month for the next 10 years.

I think there are three major problems. One is how we fund education. Two is the quality of education and third is the overall cost to the student.

I don’t think that the way schools evaluate scholarship decisions is a problem. Essentially, they are saying that they value the accomplishments that each student has achieved. Seeing this, they believe that with their education the student will be very successful in life. The school will do what they can to offer enough scholarships.

Except for about two dozen schools like Hillsdale College, all schools accept funding from the federal government. That means taxpayers are partially funding higher education although they seem to have very little control over how the schools use the money. Some taxpayers argue many schools are teaching things taxpayers don’t want taught.

Even at the most elite universities, the quality of the education seems to be lacking. Students are taking curriculums that offer little job opportunities because there is little market demand for those graduates. While the schools generally emphasize the value of well-rounded students, many courses taken simply have no value in the job market.

Even with the combination of discounts and convoluted funding sources, many students graduate with significant debt. Over 60% of students seeking a bachelor’s degree have at least some debt. The average debt, depending on the student’s choice of a public versus private college ranges from $32,000 to $48,000.

It is no wonder that college enrollments are declining. Although part of the reason is due to declining birth rates in the early 2000s, it is this lack of value that is the primary cause of the declining enrollments.

Value is usually defined as the perceived benefit divided by the cost. To improve the value, higher education must figure out how to reduce the cost and how to deliver degrees to students that are valuable. Already tuition is falling at many schools.

There is no doubt that higher education is an excellent investment. With proper course selection the average earning power of college graduates is at least $1 million to $1.5 million greater than for non-college graduates. In addition, the quality of life is higher for college grads mostly because the critical thinking skills learned will lead to better and more rewarding decision making.

We need to fix this low enrollment problem quickly.

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Michael Busler is a public policy analyst and a professor of finance at Stockton University in Galloway, New Jersey, where he teaches undergraduate and graduate courses in finance and economics. He has written op-ed columns in major newspapers for more than 35 years.