The True Cost of Higher Education

For years now, we have heard how the cost of college has been increasing dramatically.  Higher education costs have risen far higher than virtually every other sector in our economy (aside from healthcare), with increasing easily outpacing raises, cost-of-living adjustments, or savings interest rates for the average family.

Based on the annual college price increases, Eduflack estimated it would cost more than $125,000 a year to send eduson to Stanford University for his undergraduate education (following in his mother’s footsteps).  This, of course, recognizing that in addition to tuition and fees, he may need to buy a book or two, find shelter for his head, and eat the occasional meal.  (It doesn’t account for the costs associated with the extracurriculars, the frats, the girls, and the spring break trips, though.)  Thank goodness I’m planning on edudaughter to head down to daddy’s alma mater at the University of Virginia, her first step to becoming governor of our fair Commonwealth and ultimately the senior senator from the Old Dominion.
In today’s USA Today, Mary Beth Marklein takes a closer look at college costs for the current academic year, a year when virtually every family is worried about where the dollars will come from to afford college this year and next.  Marklein looks at just tuition and fees (just the first of many line items in the cost of college), and finds the average private four-year college now costs $25,143 a year, up 5.9% from last year.  The average public four-year (for in-state students) clocks in at $6,585 a year, up 6.4% from last year.  And the average public two-year is $2402, up 4.7%.  Every number reflects an increase after adjusting for inflation, except for our average community college.
The full story can be found here — <a href="http://www.usatoday.com/news/education/2008-10-29-college-costs_N.htm
Of”>www.usatoday.com/news/education/2008-10-29-college-costs_N.htm
Of course, USA Today is looking at College Board numbers on sticker prices, released this time every year.  What we need is a closer look on the actual purchase price.  Eduflack has never met an alum who actually paid sticker at Boston University, for instance, knowing that BU offers a Harvard sticker with a sizable markdown for those willing to drive off in a BU education today.
As we’ve noted throughout the week, the common drumbeat in education is that every student needs some form of postsecondary education if they are to succeed in the 21st century economy.  But what is it saying when such an education requires home mortgage-sized debt?  What does it say when, as Marklein notes, that except for the wealthiest of families, family income over the past 30 years has not kept pace with tuition increases?  
As part of his education platform, Obama pledges to make $4,000 a year available for every family to make college possible.  A noble idea, yes, but does it solve the problem?  Some would say it creates a deeper class system, where those who qualify for the federal assistance can only manage to attend their local public institution.  (Not that there is anything wrong with that.)  But it still puts private institutions or out-of-state public institutions far out of reach for far too many families.
When Eduflack has discussed the cost of college in the past, he’s often heard, as ridiculous as it sounds, that the simple fact is that college is still TOO affordable.  The economic model follows that there is great demand for seats at colleges and universities throughout the nation.  As long as applications outnumber enrollments, the price is still too low.  Demand outweighs supply, thus price can and should be increased.
I’m not going to redebate what a silly notion that is.  Yes, there will always be people who will pay $50,000 a year this year to go to Harvard, or $125,000 a year in 2024 to attend Stanford.  But if our goal is universal postsecondary education, we need to get our hands around costs and affordability.  It isn’t an issue of making college cheaper, it is an issue of putting college costs on par with the earnings of an average family and what is reasonable when it comes to family contributions, scholarships, loans, and work study.  Its an issue of colleges making cost savings that get passed on to the actual student, instead of simply getting absorbed by the administrative infrastructure.  It is about impacting the bottom line for the customer, and not for the seller.
And all of this is an issue of understanding where higher education dollars are going.  How is that $25K a year at the average private college being spent, particularly if most undergraduate courses are being taught by graduate assistants?  How many tuition dollars are going to support non-academic issues, such as athletics?  And what are the benefits of top publics, like my alma mater U.Va., are making due as a public institution receiving less than 8% of funding from the state government they were constructed to serve?
If we truly believe that every student needs postsecondary education to succeed, we need to provide them with multiple clear paths to high-quality postsecondary education.  And those paths require real choices and real options.  Is it too bold to say that every student, if they work hard, meet the requirements, and gain admission should be able to attend the college of their choice?  Is it too bold to ask that students — the true customers of higher education — fully understand the return on their investment?  I think not.  

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