College tuition has jumped by 500% since 1985

That pace easily beats both the rate of inflation and the rising cost of health care over the period.

By Jason Notte Aug 27, 2013 2:05PM
Image: Money jar (© Big Cheese Photo/PictureQuest)For all of the older college graduates in the U.S. who can't quite understand what the big fuss over student loans is all about, let's make it abundantly clear: It's more than 500% more expensive to enroll in college now than it was in 1985.

As Bloomberg points out, the rising cost of college tuition far outpaced the growth of medical costs (286%) and overall inflation (121%) during the same span. Even if you earned your diploma in the late '90s, you still got a bargain by comparison. Tuition rates kept pace with health care costs in the early '90s, but spiked from a relatively paltry 200% of their 1985 average in the early 2000s.


Michelle Cooper, president of the Washington, D.C.-based Institute for Higher Education Policy, told Bloomberg the skyrocketing tuition drives income inequality by depriving those of less means of schooling. And that may derail the "prestige and status" of U.S. higher education. Sorry, Michelle, but you're a little late to that deeply indebted graduation party.


College graduates are making $3,200 less than they did in 2000. Both art school and business school grads are swimming in debt: Total U.S. student loan debt adds up to $1.1 trillion. Cash-poor doctorate recipients are seeking food stamps in increasing numbers. Roughly 284,000 college graduates are making the minimum wage.


Even when graduates get a job, their debt doesn't get any less onerous. The Center For College Affordability and Productivity reported that nearly half of the college graduates from the class of 2010 are in jobs that don't require a bachelor's degree. A full 38% have taken jobs that don't even require a high school education.


That combination of loans and low wages is keeping recent and not-so-recent college grads out of the housing market entirely. Just about the only folks to really profit from college education within the last decade have been in Washington, where the government pulled in $100 billion in student loan interest.


Although President Barack Obama and Congress recently hammered out legislation capping student loan rates, even a proposal to tie loans and grants to a college ranking system based on costs and benefits is facing skepticism. Even worse, the current Higher Education Act expires this year and requires the Republican-controlled House and Democrat-led Senate to craft a new one next year.


As staggering as the rapid pace of college tuition increases has been, the equal and opposite glacial attempts by the federal government to do anything about it have been similarly stunning.


More on moneyNOW

52Comments
Aug 27, 2013 3:07PM
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College is no longer about teaching kids, it is about professors doing research and write papers for other professors to read, and then pat each other on the back.  You don't get raises and promotions by producing good students, you get raises and promotions by writing papers that other professors want to read.  Most professors spend only 50-25% of their time teaching.

 

Students are funding this research.

Aug 27, 2013 3:23PM
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I always wondered why few complained when tuition increases were two or three times the rate of inflation. This went on for years.
Aug 27, 2013 3:35PM
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Too much easy money out there. Same reason healthcare has gone up so much.
Aug 27, 2013 8:59PM
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The reason for the expenses is that 4-year colleges shifted, beginning in the 80's, from competing with each other for students by academic reputation to competing by offering country-club amenities.

Let me give you a great comparison: a community college and a 4-year college I considered attending back in the late 60's.  I picked the 4-year college because the tuitions were about the same then.

Anne Arundel Community College, AACC, had a tuition of $689 in 1970.  University of Maryland Baltimore County, UMBC, had a tuition of $756.  Both had the typical grab-a-tray and choose-from-a-few-items commuter cafeteria.

Today, AACC has the same commuter cafeteria with the addition of a sub station.  It's tuition is $4000 per year.  UMBC's tuition today is $10,000.  How did they diverge.  UMBC's cafeteria a typical example.  Today's commuter cafeteria is a high-ceiling, skylighted, adventure with live potted plants and little decks with well-separated tables with padded chairs.  There are stations with knockoffs of KFC, Subway, McD's, Pizza Hut, etc.

If you check out the labs (I majored in Chemistry at UMBC and took refresher courses in the 90's in Calculus and Physics at AACC) they both accomplish the same thing, but UMBC's labs have more expensive plumbing, sinks, etc.  UMBC's classrooms often have expensive wooden desks with plexiglass top so you can put a laptop under it yet take notes above it.  The gym now has an indoor track that circles the gym halfway up the rows of seats.

All nice things, but nice things that mean the Middle Class kids either can't go there or must assume a lot of debt to do so: working your way through college simply isn't possible anymore unless you have a sweetheart of a part-time job.

Since UMBC was originally established primarily as a public commuter college to service Baby Boomers from the Baltimore Area, it has betrayed it's commitment to that constituency.  As have the vast majority of 4-year state colleges in the USA.  To me, who taught hundreds of gifted and talented students who did not go to college because the price was too high for their parents to tolerate, it's as big a crime as someone who robs a bank: because those responsible to today's situations robbed millions of kids nationwide out of their futures or saddled them with high debt.

Aug 27, 2013 8:15PM
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The only way the price will come down is if we stop insisting that EVERY kid go to college. It is NOT supposed to be high school part 2. Supply and demand people, basic economics. When we push push push kids to get degrees they do not need and will not use they increase the demand. This drives up costs. It would be better and cheaper for there to be a 13th grade where students could explore some career interests, maybe do volunteering or unpaid internships in certain fields (like at a hospital to explore healthcare jobs, or at a farm to explore agriculture, a homeless shelter to explore social work, a school to explore education, etc) the kids would then have a much greater understanding of where they  should study, be it vocational, business, liberal arts, etc.
Aug 28, 2013 4:35AM
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Let me see - 38% of college grads got the jobs that do not require a college degree. I wonder where the prices would be if the demand suddenly dropped 38% - and all the idiots got the gob straight out of high-school? I betcha you'll see a price freeze and then a nice price drop. I am just wondering when are we going to rememeber about personal responsibility, and stop looking for the government to solve problem it has created in the first place?

Aug 27, 2013 7:24PM
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"College is no longer about teaching kids, it is about professors doing research and write papers for other professors to read, and then pat each other on the back. You don't get raises and promotions by producing good students, you get raises and promotions by writing papers that other professors want to read. Most professors spend only 50-25% of their time teaching." I didn't write this, I got it from the comments section of this story but I completely agree. A college education is about indoctrinating young people into a godless world view ( even at many "Christian" colleges). Don't major in anything that includes the word "studies" or in communications, general business or psychology. Get a degree in something; accounting, finance, economics, or one of the hard sciences. About a third of all the people seeking a liberal arts degree are really only there to play sports and them are almost certainly doomed to disappointment. If the federal aid to these colleges were cut in half you wouldn't have all these huge price increases. A lot of evil is being underwritten in the name of education and these young adults are paying for it with a gloomy future.
Aug 27, 2013 8:08PM
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Glad I took advantage of the Fortune 500 generous tuition reimbursement plan in the 70's and 80's - worked during the day and went to night school for 8 years; picked up 3 degrees
on my own, despite the fact my parents were part of the 1%.   Greatest lesson my
father taught me is to be self sufficient.  Books in my hey day were between 3-8 dollars.
Now if you pay in gold bullion you might get a decent graduate degree.

Aug 28, 2013 6:49AM
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I have told my kids, nieces, nephews and anyone else for years now that they can be anything they want when they grow up.  But they have to want to be at least ten things (and a dinosaur does not count).  That way they can be something they want to be and still find something that will allow them to make a living. 

I went to college (got BSN) after retiring from the Navy and watched sooo many young adults getting degrees in fields that have no jobs at all.  Its criminal the way colleges take money for training in nonexistent jobs.

Aug 27, 2013 11:31PM
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A very wise professor of mine once said, "the number one job of a college is to make money".  So true, everything that people buy has been priced to the max.  Especially things that are financed like cars, houses and college.  Cheap money has made these things go up.
Aug 28, 2013 12:42AM
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You want to fix the problem? Easy.

ALLOW STUDENT LOAN DEBT TO BE DISCHARGEABLE THROUGH BANKRUPTCY.

No, I don't advocate not paying your debts, but you have to at least make these monster think twice before lending $200,000 to a C student for an art history degree. Of course - it will never happen. Too many people are making too much money,

The death of America.

Aug 28, 2013 10:01AM
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One might infer from the article that:

 

-We are creating  college graduates faster than we are creating jobs for college graduates. 

-It may not make economic sense to borrow money to finance certain types of degrees.

-Colleges & Universities have lost control of costs.

-The federal government is a participant in the issue by encouraging students to make economically risky loans which  in turn encourage immense inflationary costs in our institutions of higher learner.

 

Once again the feds enter a market with  (hopefully) the best intentions & get sandbagged with unintended consequences.   

 

Aug 28, 2013 12:34PM
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The debt that many students accumulate getting their education, enslaves them to the banks for years, and carries with them into a job market that is more demanding than ever. Higher Education has become a major part of Corporate Profit.
Aug 28, 2013 4:41PM
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"Just about the only folks to really profit from college education within the last decade have been in Washington, where the government pulled in $100 billion in student loan interest."

Nonsense. The universities have pulled in record tuition, enabling them to expand their operations, upgrade their facilities and hire a ton of new administrative staff. (e.g., diversity coordinators)
Aug 29, 2013 11:34AM
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Yes, but has PRICE tracked well to VALUE?  Is a college education now worth 500% what it was to me when I graduated undergrad in 1984 and then graduate school in 1986?   NO WAY!  The typical institution of "higher" education is continually lowering their value bar while raising the price.  I have been a professor for over 20 years - saw it all the time.  Colleges and universities bending steadily to the pressure exerted by increasingly apathetic students.  YUCK!  Raise the bars back up, colleges and universities, raise them back up so the VALUE starts tracking once again to the price. Please ....
Aug 28, 2013 10:54AM
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Why doesn't anyone investigate what these colleges are spending on that money on? We just keep accepting the increases and funneling in the money without question.

 

I also put some blame on corporate HR departments. They have a knee jerk need to require a college degree for many jobs that simply do not need one, so it forces you into the college system if you have any hope of getting anything but a part time retail job.

Aug 28, 2013 10:07PM
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How much salary has jumped  since 1985 ?
Aug 29, 2013 3:58AM
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Some compelling stats here. With the advent of Massive Open Online Courses, we may see some disruption here. Many colleges are now working online courses into standard curriculum. According to a recent study 29% of college students (6.7M students) will taken an online course this year and not necessarily in a MOOC. Both universities and parents, are realizing the cost savings in putting their classes online. 
Aug 30, 2013 1:12PM
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AND WHO RAISED THE RATES FOR TUITION TO BE SO EXPENSIVE?????

THE DEMOCRAPS! The Republicans tried to leave the rates where they were, and were outvoted, by who again?? naturally the DEMOCRAPS! nuff said.

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I can't help but wonder why our activist president, who sticks his nose into every local issue, doesn't bloviate on this topic.  He is happy to pick on "greedy corporations" because they have the audacity to make a profit but says little about the colleges who raise tuition by double digits each year and leave students with little alternative but to take out student loans that now exceed one trillion dollars.  This is a national crisis.  However, these same colleges push the leftist socialist agenda on young minds who must actually find a job and earn an income before they learn that much of the social justice blabber they learn from their over paid professors is just that.  But they can't find jobs!!!!!
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