Why college costs aren't as dire as you think
University educations are getting more expensive, but at an exaggerated rate when financial aid isn't considered.
If there were a class called "College Costs 101," the first thing parents might learn is that the sticker price isn't the last word on tuition.
With financial aid thrown into the equation, the rise in the "actual cost" of a college education is far from the dire situation many believe, The New York Times reports.
The annual, inflation-adjusted, actual average increase for a private college is then just 1.6% above inflation, or about 4% per year, during the past two decades, The Times notes. At public colleges, it's a slightly higher 5% per year, given state budget cuts. Two-year community colleges have actually seen actual costs decline compared to inflation, at an annual rate of 0.3%.
The increases don't include the impact of loans on a student's tuition and room and board, The Times adds.
Still, rising college costs are alarming the middle class, and many feel that the price of a university education has bounded out of reach. After all, while college costs have continued to rise, median household income has not: Americans still earn less than before the recession started in 2007.
At the same time, students are taking on more loans. The class of 2011 is graduating with average debt of $26,600, a rise of 5.3% from a year earlier, according to the Project on Student Debt.
President Barack Obama is asking colleges to take steps to hold down costs. "We can’t price the middle class and everybody working to get into the middle class out of college," he said at a speech on Thursday at the University of Buffalo.
Drilling down into the numbers illustrates that those increases aren't shared equally by all students. The bottom line is that the richest students, who get the least aid, are shouldering the burden of college price hikes, according to the public policy organization Demos, citing data from the College Board.
For the poorest students, the annual cost of college rose just $307 from 1992 to 2007, or 3.4%. But the cost of tuition and room and board jumped by $3,305, or 24.4%, for the richest students.
As Demos points out, because wealthier families are more politically connected than poorer ones, they're likely to create a louder backlash. In the end, that might help everyone if it leads to higher subsidies for public colleges.
Follow Aimee Picchi on Twitter at @aimeepicchi.
You just can't fix stupid.
"President Barack Obama is asking colleges to take steps to hold down costs."
I bet this will be just as effective as his job creation. The moron has no plan or any idea of how to do anything.
"In the end, that might help everyone if it leads to higher subsidies for public colleges."
Because subsidizing inefficient things makes them efficient, right? Because throwing more money at something that is overpriced makes the price go down, right? Because governmental subsidies are free money, right?
At any cost, what do we get? They can text, stare at Facebook all day, and, feel sorry for themselves.
Most need to study, spelling, speech and ambition 101---then go to work ANYWHERE, just to get a start in life. Sorry, but you don't get a job as an art history,sports journalism, social sciences major starting at $90,000, full benefits, 4 weeks vacation and company car.
College has become a 4-6 year party with no good result to society. Colleges are self-sustaining entities that raise money just to keep this "system" going with no good result.
Learn a trade and do something for the world.
Big Bad student loans are primarily Big Bad decisions.
My daughter and 3 grandchildren (so far) have college degrees and no BIG BAD loans not because we have a lot of money but because we make good decisions. Live home, community schools, on line courses, etc.
The whole debate about costs of college is absurd. Drop government subsidies and easy loan policy for students studying non employable curriculums for which there are no jobs. Make loans difficult to get, promote community colleges, trade schools and limit the amount a student may borrow indexed to projected income. A Phd in mediveal literature and music, knowing they are most likely to wind up in a fast food job, should get very little in loans.
Oh well, they can live with their parents, stay on their parents insurance, get disability for chronic depression, food stamps and have their loan fogiven. Some approach to education for the 21st century. I am sure the Chinese are watching.
We'll know shortly, Aimee... I suspect there will be a lot of no-shows on campus who worked hard to get there but fell short, and tons of deadbeats on dole from Obama who bring groups, hatred, bigotry and a lack of commonsense with them. What's the number one ticket in college today: Sports. What isn't a viable or likely career course in the world today: Sports. They don't even teach Self-Employment or Enterprise in college... it's the most likely career option for everyone now.
Hey Barrack... resign, we just can't take any more of your Change everyone can believe in. I can't believe how much America has changed for the worse since you took your Oath.
For the poorest students, the annual cost of college rose just $307 from 1992 to 2007, or 3.4%. But the cost of tuition and room and board jumped by $3,305, or 24.4%, for the richest students."
I find it hard to believe the cost only went up $307 for the poorest students since '92. The rest has been covered by increased grants and scholarships? And the cost of tuition and room and board only jumped $3,305 for the richest students? Middle Class students didn't see a similar jump?
Costs going up 4%/year for the last 20 years is too much, especially when Americans are making less than they were making in 2007. College students can join a gym if they want Pilates or a rock climbing wall. Colleges don't need to supply them. Colleges need to tighten the belt and stop trying to be Club Med for the college crowd.
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