Is a college degree worth the cost?

With college costs rising faster than any other product or service in the economy, filmmaker Andrew Rossi asks if it’s worth it. His new film,”Ivory Tower,” pulls back the curtain on several colleges to reveal how changing business models have led to an expansion of building at the expense of a quality education.

College costs continue to rise year after year. (Credit: The Denver Post)

College costs continue to rise year after year. (Credit: The Denver Post)

Here we will discuss an education system at its breaking point and examine how we got to this point.

Cost of diploma skyrocketing

What’s really sad and chilling about soaring college costs is that it is happening at a time when employers are demanding more skilled workers. The need is there, but wages have been flat for years so loans are a necessity in bridging the gap in paying for college.

How did college become so expensive in just four decades? Claudio Sanchez revealed some telling reasons in his March 18, 2014, interview with NPR.org, “How The Cost Of College Went From Affordable To Sky-High.”

Providing some historical perspective on the issue of college costs, Sanchez cited John Thelin, a professor at the University of Kentucky and author of “A History of American Higher Education.”

In his book, Thelin explained how government programs such as the GI Bill and the National Defense Student Loan (NDSL) program, later called the Federal Perkins Loan program, helped to make college affordable for both veterans and civilians.

According to Thelin, the turning point began in 1970 when inflation reached double digits and the economy slowed.

“College tuition and fees climbed as much or more than the inflation rate. Private loans, heavily subsidized by the federal government, gradually replaced federal grants as the main source of money for both poor and middle-class college students,” Sanchez stated.

The reduction in public investment in education meant that schools had to secure their revenues from other sources. So as state funding fell, tuition charged directly to students began its steady rise.

College costs

Another exploration of college costs as well as a possible solution can be found in the book, Why Does College Cost So Much? by Robert B. Archibald and David H. Feldman.

Higher education costs in the U.S. have exploded because higher education is a personal service that relies on highly educated labor. According to Archibald and Feldman, the rise in education costs is due to economic growth itself.

The solution proposed by Archibald and Feldman changes the relationship between state funding and colleges by providing funds directly to the students.

“A system of direct student funding gives considerable independence to colleges and universities. For starters, it relieves them of the responsibility to go to the legislature every year to justify an increase in the school’s state appropriation,” Archibald and Feldman said.

Direct funding to students would increase competition among a state’s universities and clarify the costs and benefits that they offer.

Ivory Tower

Rossi, who also directed the film, “Page One: Inside the New York Times,” again focused his lens on an institution that is experiencing disruption and change. He spent two years traveling the country and visiting schools and colleges to find the many voices that create his story.

In a June 23, 2014, interview for PBSNewshour, “‘Ivory Tower’ explores why American higher education is so pricey,” Rossi explained a key finding.

Previous generations of college students were able to fund their college costs with summer jobs. Not anymore. College costs have risen by an astonishing 1,120 percent since 1978 according to the film. A primary reason for the extreme rise in tuition is due to a decrease in state funding, a 40 percent decrease since 1978.

“But what we’re really looking at is a business model in higher education that encourages a growth to become bigger and better, which allows universities to attract student loan dollars and is creating perverse incentives in the classroom, in addition to this terrible student debt crisis,” Rossi said.

Is a college degree worth it?

In order to achieve their dream of a university diploma, students and their parents are taking on mountains of debt that will affect them for the rest of their lives. Is it all still worth it? Statistics show that college graduates with a bachelor’s degree will earn about one million dollars more over their lifetime than someone without a degree.

Bottom line, Rossi still thinks that college is worth it.

Read more about issues related to education at Questia.

Are you concerned about the costs of college and your student loan debt? Let’s talk about it in the comments.

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