I vividly remember my first tuition bill in the University of Texas educational system. The reason it was memorable was that I transferred there from a private college where tuition was shockingly expensive. No one in line at the teller window could figure out why I was laughing at the $245 bill for twelve credit hours; my fellow travelers all thought I was crazy. Today what’s crazy is that tuition for an in-state college or university is more than double what I used to pay at a prestigious private college and there’s no end in sight for the price increases. Educational costs are now the second largest expense in household budgets after housing costs.
Pinning down exactly why tuition is rising significantly faster than inflation is difficult and quickly turns into an exercise in finger pointing. Administrators blame teacher salaries and overtime, teachers point the finger at bloated administrator salaries. Still others suggest it’s the cost of sports programs. The federal government says states are cutting what they spend on education and everyone blames easy access to student loans. States are cutting what they invest in education, called disinvestment, and tuition rates are rising faster than inflation and far outracing household income.
While we argue about the true cause of tuition hikes, the bills keep piling up for America’s young people. The average American salary is around $55,000, the cost of tuition at an in-state college or university is around $9,140 and that’s not counting room, board, fees, books, a meal plan or travel. You don’t have to be a financial wizard to see why average Americans are having an increasingly difficult time paying for college.
Nearly seven out of ten undergraduates are filling in the financial gaps with loans. Total student debt in the United States is a staggering $1.35 trillion dollars, with the average individual graduating $33,000 in debt.
Just Worth It
Most families still consider the sacrifice for education worth it and the lifetime earnings numbers seem to support that view. The numbers don’t work quite as well when it comes to for-profit colleges. The cautionary tale for those facing upcoming college expenses is that more than half of families report college costing more than they planned. Families should have clear discussions about how college is being funded because there’s a wide discrepancy between what families think they’re contributing and what students think their families are contributing. Making college age people more aware of the sacrifice involved in getting them through school would, at a minimum, reinforce the value the family puts on study and getting good grades.
Impacting The Poor
America prides itself on being a nation where opportunity is open to all but the cost of education is falling heaviest on the poorest families. Low income students are more likely to opt for community college than students with more wealthy parents. Most experts believe that impact will continue to creep up the income ladder in the days ahead.
Right now college is still worth it, even though we’re saddling young people with a decade of debt at the most productive time of their lives. But college costs don’t have to rise much higher before the math starts to change. Already the return on investment math has stopped working for many career fields and is steadily shifting toward higher paying jobs. It’s a sadly bleak future that our college age youth face and it’s hard not to feel like we’ve let them down.