Third Way: The Real Cost Of Expensive Universities
DBenitostock
The cost of a higher education has skyrocketed in the last few years. Currently, the average person pays $28,000 annually for a public education, while the average person pays $40,000 annually for private.
These high prices have not kept up with inflation or workers’ wages, making it harder for people to afford it. As fewer and fewer people have been able to attend university, less people see the value in a degree.
This is problematic because the American economy requires large numbers of college graduates to fill jobs and bolster local economies through spending and taxes. Colleges must work to be more transparent in prices and aid available to ensure good economic growth.
Rising Costs
The cost of college has not matched the economy. In 1980, the average college cost $10,000. Now it’s around $28,000. This is a 180% increase in just 40 years. Due to these prices, more than 50% of college grads graduate with at least $28,000 in debt.
Once they graduate, however, it is believed the earning potential is much higher than a high school degree. While that is true, their starting salaries are so low, it is often years before their debt is paid off, with one study finding college graduates on average make $48,000 in the first year of post-grad, despite expecting around $60,000.
Since 1980, 22–27 workers’ wages have only increased by 19%, not keeping up with college prices. 70% of college seniors say their debt will determine what job they select and more than 1/3 expect to take on an additional job just to cover the costs of their debt. 41% of college graduates are underemployed or working in a job that does not require a college degree, and 11% are unemployed.
Some studies even show having a bachelor’s degree does not guarantee an additional income, especially depending on the type of degree earned. The cost of college has risen exponentially, resulting in high debt that cannot be paid off from the low incomes received after graduation.
Reliance On Higher Tuition
Why then has college become so expensive? One reason is the additional resources and services provided to students from universities. There are far more services and resources provided now as universities have become more competitive with each other to attract students.
Further, college is not a sector that can be made to be more productive. Prices have increased, but universities still need to pay their professors and house their students. In other words, there is only so much that can be cut from the budget while still providing an education and housing resources to these students.
Additionally, over the years, state funding for universities has plummeted. Between 2020-2021, state funding for higher education in 37 states fell by 6%. State funding had been used to mitigate the costs of universities. Once that declined, these schools then needed to rely on more tuition to afford what they previously could afford.
Perceptions Of Higher Education
Due to these rising costs, the perception of higher education and the belief in the necessity of a college degree has declined. In a Gallup poll taken in 2023, Americans’ confidence in college was at a measly 36%, a 20-point decrease from 8 years prior. Another survey found the likelihood of attending a 4-year college was just at 53%, down from 71%.
Further, more than 50% of people in that survey believed they could achieve professional success with 3 years or less of college. Fewer than 1 in 4 currently enrolled students believe that all or most Americans have access to quality, affordable education after high school if they want it. Americans increasingly see these institutions as out of reach and therefore, not worth it.
The Need For College Grads
Secondary education, however, is essential for the economy. College graduates have a lifetime potential earning of 2.9 million, as opposed to 1.5 million of high school grads. Beyond college graduates’ own earning potential, they contribute in a very necessary way to the economy. The average college degree holder contributes $278,000 more to the local economies than the average high school degree holder over their lifetime.
College grads also contribute $44,000 more in local and state taxes that advance civil service, infrastructure, and fund public schools. Further, more and more jobs require college degrees. Therefore, a decline in college graduates hurts local economies, creates a worker shortage, and decreases tax dollars needed for improvements.
Making College More Accessible
How can colleges become more affordable for the masses without cutting services to students? Some recommendations have been to simplify the FAFSA, double the maximum pell grant award amount and adjust it for inflation, increase funding for federal work study, support affordable textbooks and simplify loan repayment options.
“Some observers say all colleges need to be transparent about the real cost of attendance versus the sticker price, as well as the options available for aid, like college Promise programs. These programs, usually offered by local school districts or states, offer scholarships to eligible high school graduates in certain areas, often covering up to 100% of tuition and fees at local community colleges or universities.”
In other words, if universities need to continue to charge the same tuition, then they need to make it easier for prospective students to understand their options when it comes to tuition assistance. While it is unlikely colleges while decrease their tuition anytime soon, they can provide more aid for students and assist in ensuring it’s a more accessible avenue.
Regardless of how colleges choose to make their tuition more affordable, the fact is clear; they must work to make secondary education far more accessible than it currently is. Outrageous costs that do not align with workers’ pay makes for an increasingly elitist and out of touch institution. It is already affecting public perceptions of the necessity of a college degree and has resulted in declined enrollment rates.
College degrees are essential for the economy and there are paths to fixing these issues. Universities must be more transparent about costs and aid options to ensure this remains a viable option for all in the future.