The Cost of College: Are We Paying Too Much?
The rising cost of college in the United States is leaving families across the country steeped in debts thousands and thousands of dollars deep. And for the country as a whole, that hole is just about $1.5 trillion deep. That’s right, student loans make up the largest chunk of U.S. non-housing debt, surpassing even credit cards or auto loans. Since the 1980s, the price of attending college has been increasing. In the 2015-2016 academic year, the average yearly tuition for a public four-year university was just over $19,000, says the National Center for Education Statistics. This figure jumps to an average of almost $40,000 for private universities. Overall, the average annual cost for all four-year institutions is $26,120, bringing the total cost of attendance to an enormous $104,480 over four years. In 1989, the average total cost for the same four-year degree was $26,902, or $52,892 adjusted for inflation. This means that between 1988-1989 and 2015-2016 academic years, the average cost for a four-year degree has more than doubled, even after inflation.
Well, the cost of college tuition has doubled, but haven’t wages gone up too since the 1980s? Yes, but only by a mere 0.3% per year, compared to college tuition’s average annual 2.6% growth rate. The cost of college is increasing nearly eight times faster than wages are, leaving each successive group of graduates worse off than the last. This massive disconnect between the rising costs of education and the nearly static wage growth is only making it harder for graduates to make ends meet while paying back drowning amounts of student loans.
So why is college so expensive, and why does its cost keep rising? In a country where a college degree is seen as the basic requirement for any decent, professional job, the demand for higher education keeps increasing. According to the Department of Education, U.S. colleges expected a total of 20.4 million enrollees in fall of 2017, about 5.1 million more than in fall of 2000. The more students who want to go to college, the more the cost of college increases. There is a certain degree of fear among students regarding what will happen if they don’t go to college, while the realities of what can happen if you do go to college can be just as frightful. Not getting a college degree can put workers at a major disadvantage in the job market, but at the same time, starting a career with mountains of debt in student loans is equally as damaging. Many young professionals are forced to choose between saving for retirement or repaying their loans: it’s no surprise that savings rates are nearing all-time lows. All of this makes it easy to see why the advantage of getting a college degree today is less than it was ten years ago.
The grim story told by these data leaves us with the question of whether attending college is even worth it. And if it is, what strategies should students and their families use to go about receiving a degree? It no longer makes sense to begin a college education studying liberal arts at a private university, unless you have a very clear idea of what you are going to do with that degree. More and more people are beginning to favor public universities or even online colleges over private institutions. Many have begun to consider spending a few years at a community college before transferring to a university. Another possibility is to work for a couple of years before going to college to save some money and better understand the huge investment of pursuing a college degree. As more and more young students dive headfirst into the promising but increasingly suffocating hole that is a college education, it is necessary to take a step back and carefully consider whether it is really worth it, and how to smartly get a degree while carrying away as little debt as possible.