Believe it or not, there are prominent economists who argue that there is no affordability crisis in higher education. First, let's define "affordable." Technically, college is affordable if the money left over after you pay tuition and fees is enough to cover your other expenses.
Let's look at net price, the amount students actually pay after scholarships, grants and tuition discounts reduce the sticker price seen on the college's Web site. If you look at the net price of a year at a public, four-year college during two different periods — 1990-92 and 2003-05 — the true cost rose 37 percent. That's a monster increase, but the numbers themselves are shockingly low: a modest bump from $1,529 to $2,089 [source: Archibald].
Now let's look at the rise in household income over that same time period. A family in the 40th percentile of American households — solidly middle class — saw their incomes rise from $41,072 to $44,834, only a 9 percent increase. At first, that looks like an affordability crisis: the cost of college outpacing income 37 percent to 9 percent. But when you apply the affordability formula, you get a surprising result.
In the 1990-92 time period, a family could pay for college and have $39,543 left over. In 2003-05, they would have $42,754 left over. By the standard of affordability, the modest rise in income more than covered the seemingly dramatic increase in college costs [source: Archibald].
Fine, but on what planet is the net price of a college education only $2,000 a year? Surprisingly, the average public college for 2011-2012 had a net price of $2,490, not including room and board. (The average private school's net price was $13,000) [source: Goldstein]. Maybe college is not so out of reach, after all.
Author's Note: 10 Reasons Why College Costs So Much
When my 8-year-old daughter is applying to college a decade from now, what will her options look like? What about our 6-year-old and 3-year-old? When I was a senior in high school, my parents had saved enough to allow me to apply wherever I wanted. It was a generous reward for getting good grades, but it's a gift that I can't imagine offering to our own children. Not that we don't want to help them pay for college; there's just no way that our modest savings will cover more than a few semesters at the private college my wife and I attended. Our best hopes are merit scholarships, need-based grants or a radical overhaul of higher education by way of MOOCs and other low-cost online models. I still believe in the value of a college degree, not only for the academics, but for the experience of living on your own and forging an identity within a supportive and fun community. Heck, if I didn't go to college, I wouldn't have met my wife. And that's priceless.
- Archibald, Robert B. and Feldman, David H. "College Costs, the Sequel." The New York Times. Nov. 22, 2010 (Feb. 12, 2014) http://opinionator.blogs.nytimes.com/2010/11/22/college-costs-the-sequel/
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- The Economist. "An incurable disease." Sept. 29, 2012 (Feb. 12, 2014) http://www.economist.com/node/21563714
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- Lewin, Tamar. "Financing for Colleges Declines and Costs Rise." The New York Times. March 6, 2013 (Feb. 12, 2014) http://www.nytimes.com/2013/03/06/education/aid-for-higher-education-declines-as-costs-rise.html?_r=0
- Malcolm, Hadley and McMinn, Sean. "Sagging state funding jacks up tuition." USA Today. Sept. 3, 2013 (Feb. 12, 2014) http://www.usatoday.com/story/money/personalfinance/2013/09/02/state-funding-declines-raise-tuition/2707837/
- Martin, Robert E. "College Costs Too Much Because Faculty Lack Power." Chronicle of Higher Education. Aug. 5, 2012 (Feb. 12, 2014) http://chronicle.com/article/College-Costs-Too-Much-Because/133357/
- Michigan State University. "Yakeley Dining" (Feb. 11, 2014) http://eatatstate.com/menus/yakeley
- Smith, Matt. "Happy Birthday, Mac! Remembering the Original Personal Computer 30 Years Later." Digital Trends. Jan. 24, 2014 (Feb. 12, 2014) http://www.digitaltrends.com/computing/apple-macintosh-turns-30-mac-turns-30-bday-30th-bday-mac-apple/
- Ulrich, Karl. "Why Does College Cost So Much? Not All Colleges are Expensive." The Wall Street Journal. Oct. 14, 2013 (Feb. 12, 2014) http://online.wsj.com/news/articles/SB10001424052702304561004579135293814151928
- U.S. Department of Education. "College Ratings and Paying for Performance" (Feb. 12, 2014) http://www.ed.gov/college-affordability/college-ratings-and-paying-performance
- Weissmann, Jordan. "Does It Matter Where You Go to College?" The Atlantic. May 17, 2012 (Feb. 12, 2014) http://www.theatlantic.com/business/archive/2012/05/does-it-matter-where-you-go-to-college/257227/
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