What does it cost to get a college degree?
The job market has always been competitive, and in the current strained economy, it is even more so today. A job seeker needs every edge possible to leap to the top of the resume pile, and a college degree might just be your ticket to rising above the competition.
Studies show that, even in today’s tough job market, college graduates consistently earn more than their non-degreed counterparts. However, the cost of getting a degree has risen steadily, making many potential college students wonder if going into debt is worth a better paying job.
The Rising Costs
Why does the cost of education continue to go up anyways? According to the article “Enrollment Management & Financial Aid: a Multi-part Series,” “at most institutions the enrollment goals are the revenue goals; successful enrollment management requires the management of financial aid in such a way that the number, mix and profile of enrolled students produces the desired net revenue after aid. There’s no question that at an increasing number of institutions, the management of financial aid has become so tightly intertwined with the concept and the practice of enrollment management that the two are essentially indistinguishable.”
Over the past decade, college tuition has gone up an average of 51% at public four-year institutions. However, median family income has increased by only 14% during this same period.
The 2010-2011 academic year alone saw a jump in the number of colleges charging $50,000 or more per year for tuition and fees, including room and board. One of these schools, the University of California, Berkeley, was the first public institution to make the list by charging $50,649 for nonresidents—California residents will pay $27,770 to attend.
According to L. Troy Niskey, author of “The Critical State of College Access and Affordability in the United States,” there are many impediments to cutting the cost of higher education including, “healthcare, energy, and technology…” Niskey goes on to say that “another related issue is that colleges compete for the brightest students, in part by investing substantial funds in their facilities and services to make them as attractive to their customers (students and their parents) as possible. And yet none of these factors contributes to a higher quality education.”
Finding Affordable Programs
Based on the dramatic increase in education costs, individuals may feel like a degree is completely out of reach. However, parents and students can search for affordable degree programs. One place to begin is at The College Board Advocacy and Policy Center. Every year, The Board conducts a survey of colleges, gathering information on tuition, fees and financial aid. The Board organizes its findings into a categorized report that includes data on published and net prices.
Sometimes called the “sticker price,” published prices include tuition, fees, and room and board costs posted by colleges. In other words, this is the price you’ll pay if you have no financial aid. According to The Board’s report, about one-third of all full-time students pay the published price; however, many may qualify for tax credits and deductions to help offset costs. The net price is what students pay after subtracting any aid money they receive from the published price.
During the 2010-2011 academic year, published prices averaged $7,605 for in-state tuition and $16,140 for in-state tuition that included fees, room and board at public four-year institutions. Out-of-state students paid, on average, $19,595 and $28,130 in comparison. Published fees at private non-profit four-year institutions averaged $27,293 for tuition and $36,993 for tuition that included fees, room and board.
Federal Aid Softens the Blow
Fortunately, the effects of rising tuition have also helped to raise the amount of federal aid available for students. The Board report for 2009-2010 showed a 64% increase in grant aid, from $25.2 billion to $41.3 billion. The Pell Grant program alone, which serves low-income and military students, increased its spending by 58%. This increase in the maximum grant amount opened the way for an additional 1.5 million students to qualify for grants.
The Good News
Published prices have increased by as much as 24% at public four-year institutions in the past five years. However, after adjusting for inflation, the average net price paid by full-time students has declined, largely due to the increase in federal grant aid and tax benefits.
Generally, a college freshman will find the most affordable tuition at a public two-year college, where the average cost for tuition and fees is $2,713. Many two-year schools don’t offer housing, however. When considering a four-year college, don’t dismiss a private institution thinking that you can’t afford the higher costs. The private college of your choice may receive a large endowment or grant aid that can offset your total costs and bring them in line with similar public institutions. Therefore, researching a variety of different colleges and financial aid options may end up being time well spent.
Trends in College Pricing 2010