College Cost Break Down: Why College is So Expensive? Part Two (Page 2)
Fortunately, you have complete control over a couple of these factors (college major and career path), and to a certain extent you do have control over how much you choose to pay for college (what college you decide to go to, taking online college courses before enrolling in college) and how much student loan debt you are willing to take on.
While you may not be able to easily change (or necessarily want to change) where you live, you do have access to location-neutral options due to the growth of online education. Thanks to the availability of low-cost, high-quality online college courses, and credit-by-exam programs, you can mitigate the financial factors resulting from where you live and maximize the ROI on your college degree. Taking advantage of online college course providers like StraighterLine allows you to take college classes anywhere, anytime for remarkably low costs, accumulate a portfolio of college courses – and transfer those courses for college credit when you are ready. The number of semesters it takes for you to graduate, after all, has a huge impact on how much you pay or need to borrow for college. Fewer semesters, less cost.
You Can’t Hear It, Feel It, or Touch It – Why does a College Degree Cost So Much?
It’s true, a college education is something you can’t feel, see, hear, or touch. Once you graduate from college, you are able to call yourself a college graduate, but what do you really own? You might have a diploma printed out on a fancy piece of paper. You might have even framed that diploma and hung it on your wall. As you pay your monthly student loan payments, however, you might find yourself wondering why that college degree was so expensive to obtain.
Below, we’ll breakdown the common costs of college, and see where your tuition and fees go.
College Cost Break Down
1 - Employees5
On average, 75% of the total costs associated with a college degree are employee wages, benefits, and etc. College employees include faculty, administration, and staff.
Faculty and Staff Salaries: Higher education is a service industry. It’s all about people teaching people. Faculty salaries are expensive, and are particularly expensive in competitive subject areas like STEM (Science, Technology, Engineering, and Math) where for-profit industries compete for the same skills and talent. Colleges also try to lure faculty with certain types of expertise to teach at their schools with benefits beyond pay, such as access to labs tricked out with the latest tools and technologies and other asset investments, which can also be extremely capital-intensive.
Limited Institutional-Based Control Over Contracts: In many public educational settings, rules regarding pay rates and benefits are negotiated on a state-wide basis for public employees (such as faculty unions). This can limit individual colleges' control over personnel costs.
5Dickeson, Robert, The Secretary of Education’s Commission on the Future of Higher Education, Issue Paper, Frequently Asked Questions About College Costs, p.1