The Truth About Affording The Rising Cost of College
Before you can even begin to consider the “will my child get in to her top choice college?” question, it’s impossible not to reflect on the cost of attending college. In fact, you have probably been thinking about this since she was in diapers and – hopefully–saving some money for that very occasion! So, when your child starts researching colleges, you should get online next to her and start your own research on the various costs of those institutions she loves. Better yet, come up with some comparable but less expensive colleges to add to her list. In this uncertain economy, I would wager that almost all of us could benefit from taking a hard look at the cost of college.
College costs are rising. This is no revelation and I sincerely hope you’re not shocked that college costs are escalating at more than twice the annual rate of inflation. This year alone the average cost of attending college has increased by more than six percent at both public and private colleges. According to the College Board, the average cost of attending a private four-year college is $23,712 (+6.3% from last year) and the cost of attending a public four-year college is $6,185 (+6.6% from last year). Regrettably, federal appropriations have not kept pace with the increasing cost of college. Over the past decade, they have declined from 66% to 58% of the total funds used to help finance a college education. Did you know that a college may spend one-fifth or more of its operating budget on student aid? Thus, many colleges have had to implement their own methods of paying for requisite research and financial aid and, in doing so, must increase tuition to make this possible. As a result, many students are turning to non-government loans to help pay for college; over the past decade, funding from private loans has increased from 3% to 12%.
To make matters worse, there are simply no incentives for colleges to cut costs, especially when considering the pressure from the public and other institutions to improve their students’ educational experiences. They have to keep up with the Joneses to remain competitive with other comparable colleges. So, college administrators must develop ways to improve facilities, programs and endowments. As I tour colleges across the country, many institutions are quick to flaunt new research facilities, residence halls, extended library and computer lab hours, and smaller classes with top-notch faculty. But very few schools mention anything about cutting costs or reducing tuition. Finally, as businesses, universities are not immune to the increasing costs of employees’ salaries, health care and retirement benefits, even fuel costs. The more they offer to students, faculty and employees, the more tuition will rise.
The aforementioned figures are alarming, to be sure. But before you reach for the Xanax, keep in mind that, according to the College Board, only 6% of students attend a college where tuition and fees are higher than $33,000. And 22% of students attend two-year public institutions where the average cost is only $2,361.
Any comprehensive college search website should note a university’s current tuition. The key, though, is not to get too comfortable with the university’s sticker price before taking a look at the total cost of applying to and attending college. It’s not just tuition, room and board.