College has always been a major life expense. However, it wasn't until relatively recently that paying for college became a perceived life sentence to student loan debt.
Over time, the economics of earning a college degree shifted. It moved from being a financially accessible credential for getting ahead, to becoming a financially burdensome necessity for getting by. And here’s why: college has become more expensive relative to income, meaning a larger chunk of your paycheck is needed to pay for your college costs.
Fortunately, there are steps you can take today to reduce those costs--but first, let’s get a better idea of the reality of college expenses.
A Catch-22 for Students
It’s not your imagination: The good old days of college costs really were the good old days. According to a recent article in the New York Times, “Tuition at a private university is now roughly three times as expensive as it was in 1974, costing an average of $31,000 a year; public tuition, at $9,000, has risen by nearly four times.”
And yet, though the relative expense of a college degree has risen, the need for a college degree to attain at least a middle class lifestyle has also risen, creating a Catch-22 for students.
Student Debt and Today’s College Student
Today, it has become far too common--and far too easy--for students to overextend their finances with student loans. According to the Wall Street Journal, 2015 college graduates are the most indebted ever, with the average student leaving school with more than $35k in student debt. According to that same article “Even adjusted for inflation, that’s still more than twice the amount borrowers had to pay back two decades earlier.”
Fortunately, students today have more options than ever before. With the rise of online learning, alternative credit providers, and competency-based education, new degree pathways have emerged that can dramatically reduce the cost--and time--it takes to earn a college degree. When students are empowered, the cost of college goes down.
Where You Go to College Matters
Where you go to college makes a sizable difference in your overall cost of college. Common sense might suggest that more expensive colleges with higher-than-average published tuition rates would cost more to attend than less expensive colleges with lower-than-average published tuition rates. Yet, that’s not always the case.
While it’s true that the published tuition costs of state colleges and universities tend to be lower than what you end up paying at a private college or university, the actual net price might be considerably less. The difference between what you actually pay for college and the published tuition prices comes down to this: financial aid. Without knowing your financial aid package, it can be challenging to know which school is your best economic choice.
Average Published College Tuition
The average published college tuition and fees rates for undergraduates for 2015-2016 is as follows:
- Public Two-Year (In-State): $3,435
- Public Four-Year (In-State): $9,410
- Private Nonprofit Four-Year: $32,405
To Avoid Added Debt, Graduate on Time
College tuition and fees continue to rise each year at both public and private universities. Comparing the published tuition and fees between 2014-2015 and 2015-2016, college costs have risen 2.9% for public four-year colleges and universities and 3.4% at private ones. According to the College Board, over the last two years (2014-2015 and 2015-2016), the average net price paid by full-time students enrolled in public four-year colleges rose considerably and the average net price has also increased for private nonprofit four-year students.
How might this affect you? Count on your cost of college to increase each year that you remain enrolled. To minimize student debt, it is in your best interest to graduate on time -- or early.
Plan for Rising Tuition Costs
Contributing significantly to rising tuition rates at public colleges and universities has been a decline in the total dollar amount states contribute to their public state colleges and university systems. In an era of state budget cuts to education, colleges are increasingly passing on the financial burden of these budget shortfalls to their students.
According to a 2014 Government Accountability Office report, researchers found that when comparing 2003 through 2012, “state funding for all public colleges decreased, while tuition rose. Specifically, state funding decreased by 12% overall while median tuition rose 55% across all public colleges.”
Because of this phenomenon, today’s student perception about the cost of college is often overwhelmingly negative. But before you press the panic button, understand that even with rising tuition, borrowing per student was actually 10% lower in 2015 than in 2011 because of grant aid. Here’s how that plays out by school type:
- Full-time students at public two-year colleges paid $1,140 less in tuition and fees in 2015-16 than a decade ago.
- At private nonprofit, net tuition and fee price is just 1% higher (2015-16) than a decade earlier.
- Public four-year college students, due to recent price increases, pay net prices of 38% more (on average) than 10 years ago
Research Your College Options
If you’d like some deeper insight into specific college costs, the National Center for Education Statistics provides a College Navigator which allows you to research individual schools. It evaluates a number of school-specific financial and student success rate data points, including estimated tuition and expenses for full-time undergraduate students, the number and percent of students receiving financial aid at that institution (including a breakdown of grants/scholarships versus loans), net price, degree programs, admissions, retention and graduation rates, as well as loan default rates.
You should also become informed about which schools make it easy to take advantage of alternative credit. A first step is to check out low-cost online course options available through StraighterLine (and guaranteed to transfer to accredited colleges and universities in its partner college network). Working adults looking to accelerate their time to degree should also check competency-based education programs, which allow you to move quickly through material you already know.
What Can You Do About the Rising Cost of College?
Before you enroll in college, take a step back. Evaluate all your options and you’ll find many convenient and affordable ways to earn your degree. Don’t let a fear of student debt stop you from taking a step forward. Can college be expensive? Yes. But earning your degree is still worth it.
By understanding why college is so expensive, you can take the steps necessary to mitigate your cost of college, graduate with fewer student loans, and make smart choices that can better lead to you reaching your education and career goals.