Housing. Gas. Medical insurance. Food. What do all of these have in common? Their prices have all risen over the last decade thanks to inflation. And while we think that’s par for the course given the ebbs and flows of the economy, many of us have been shellshocked by the rate at which the price of a college education has risen.
We’re going to take a look at some of the catalysts behind the skyrocketing costs of college tuition. But don’t worry, at the end of this article, we’re also going to share 5 ways you can bring the cost of earning your degree way down!
Why is Higher Education So Expensive?
Before we get into the WHYs, let’s take a look at some actual numbers. Since 1985, the cost of a college education has surged more than 538% according to Bloomberg! Consider that, in comparison, medical costs have jumped “only” 286% while the consumer price index has risen a “mere” 121%. Doing some quick math, it’s clear that higher education is almost 4.5 times as expensive as it was just 30 years ago.
Let’s look at some more numbers:
Between 1994 and 2014, tuition fees at a four-year public university rose 110%, and all indicators suggest this trend will continue. In 2015, a four-year tuition to a private school was $134,600. Based on the current rate of inflation, in 18 years, that same tuition could cost as much as $323,900!
And before you assume that a public education offers an affordable education, experts predict that a four-year, in-state education will increase from $39,400 to $94,000. Think relying obtaining your degree from a two-year school is the silver bullet to this tuition monster? Think again. That tuition is expected to rise from $77,400 to $186,400 in the same timeframe.
So, across the board, in less than 20 years, we can expect to see another jump of almost 140%. Not many people have the kind of money it’s going to take to earn their degree!
Just What is Going On?
How is it that the cost of a college education, which once rose at a snail’s pace, is now rising faster than almost every other consumer service? What exactly is causing these skyrocketing prices and what can consumers do to save money?
We’ll get to the saving part in just a bit.
But first, here are some of the primary reasons college tuition is going up, and up, and up.
Same Supply – More Demand
There was a time in this country when going to a four-year college to obtain a degree was considered a luxury. For most of the population, a high school diploma was all they needed to enter the job market and earn a decent salary to support a family and build the American dream.
But times have changed, and the typical American dream now includes a 4-year college education. And so now more and more people are relying on a finite resource.
Consider the fact that back in 1950, only 7.3% of the male population and 5.2% of the female population had completed four or more years of college. Fast forward to 2016, and those numbers have climbed to 33.2% of males and 33.7% of females.
So what changed? Why did something that was once considered a luxury only for the elite class become a commodity everyone wanted a piece of?
Well, it’s not so much that people want a college education, it’s more that in today’s competitive job market, a degree is basically mandatory to reach any level of success.
So, as with any basic supply and demand model, when demand goes up and supply can’t stay apace, you have a situation where colleges and universities can charge whatever tuition fees they see fit, knowing large pools of students will still clamor to get their foot in the door.
But Wouldn’t Competition Force Universities to Lower Costs?
Usually in a free market, more demand causes more competition, forcing prices lower, not higher. So what gives?
Well, it’s true that universities are competing with one another, but ironically it’s this competition that is helping the cost of tuition to rise. Times have changed, and landing a student these days takes more than just being a parent’s alma mater.
Modern universities have learned that in order to get the attention of students, particularly elite students, they have to offer more than a handful of buildings cobbled together around a quad. To lure top talent, schools must now offer attractive amenities.
What kind of amenities, you may ask? Here’s what Seton Hall professor Robert Kelchen had to say about it, “Schools are all going after a fairly small pool of students who are high achieving and high income and able to pay much of their own way to college. They’re trying to build more amenities—so you hear about the rock climbing walls and the lazy rivers.”
In this way modern colleges are not so different from hotels and resorts. Offer someone a clean room with a bed and shower and you can charge X amount. Offer that same person Egyptian cotton sheets, flat screen televisions, an on-site gym and three on-site restaurants and you can charge them quite a bit more.
Is Student Financial Aid Also to Blame?
According to a study from the National Bureau of Economic Research, the availability of federal student aid my also be to blame for the rising cost of a college education. Their paper suggests that the more money students can borrow, the more students will throw their hat into the higher education ring, and the more that colleges can then charge.
It’s an interesting theory and one that may hold some merit.
Over the past few decades, the amount of aid available to students has increased dramatically. Not only have subsidized loans expanded but unsubsidized loan programs have also made their debut. But has all of this financial “help” really helped students offset the costs of their education?
The researchers from the National Bureau of Economic Research say no. They point out that with this financial help, colleges have increased their tuition even more. Why? Because they know that financial aid can cover the difference.
“You’ve got to somehow tie aid to lowered tuition if you want to give money to students,” said Grey Gordon, an assistant professor at Indiana University and co-author of the paper. “You have to somehow structure it so colleges can’t just increase tuition and capture that money.”
Faculty and Staff Salaries Have Also Risen
Beyond rock walls and lazy rivers, to be competitive, universities need to attract and retain the best staff and faculty possible. This inevitably translates into rising personnel costs for salaries and benefits.
There is also the fact that at many of the country’s top schools, the presidents are now paid like CEOs of Fortune 500 companies. Here’s what a report by the Chronicle of Higher Education found: 180 presidents at private colleges earned more than $500,000 in 2011. In 2004, that number was only 50 presidents earning that much. Perhaps even more startling is the fact that the top two highest paid presidents each received more than $3 million as their yearly salary.
Is Anything Else Causing Such Steep Tuition Hikes?
As a matter of fact, there are some other catalysts behind the continually rising cost of higher education, and some of them may surprise you.
Ask any business owner about the costs of keeping up with the times and he or she will likely tell you they can be expensive! Colleges are also businesses that must try and keep pace of the ever-changing technology landscape.
For instance, just when colleges became hard wired for the internet, wireless technology became all the rage. These days, if a coffee shop, let alone a college campus, doesn’t offer WiFi, heads will roll!
Of course, all of this constant upgrade of technology comes with a price tag – and these costs are passed along to the student body.
An Upgrade to College Housing
Back in the day, college housing was basically a few big, ugly buildings where two roommates shared a dorm room that may or may not have smelled like beer and dirty socks. But housing like this no longer exists.
Students demand more, and to remain competitive, colleges are now offering other types of living arrangements like “residential facilities” or “apartment suites.” As you can imagine, this type of housing can be far more expensive than the traditional 10 X 10 dorm room with one window and a hot plate.
More Student Services
But it’s not just housing that’s getting an upgrade. As students demand more services, colleges are forced to meet those demands, regardless of expense. This is why you will find more and better dining options as well as more robust health and fitness centers on many campuses across the country.
The costs can really add up.
Many colleges in this country have been around for 100 years or more. And many of these older buildings, over the years, have been built and fixed with material such as lead paint and asbestos. These are obvious health risks to the students and faculty.
Removing these hazardous materials often comes with a hefty price tag, and many institutions choose to build new buildings, regardless of the fact it can lead to higher short-term costs.
5 Ways to Save on College Tuition
So the bad news is, a college education costs almost 5 times what it did just a few decades ago, and experts agree this economic trend is only going to continue.
Now this news can be hard to hear for traditional students right out of high school, and their parents. But rising education costs can be downright devastating for an adult student, who may have a family and other big financial responsibilities. For these adult students, taking on massive amounts of debt is just not an option.
Well don’t worry! Here are some ways adult students can save a lot of money toward their degree.
1. Choose an Online Education
As we mentioned earlier, housing costs have really skyrocketed on college campuses around the country. Part of what makes an online education so affordable is the fact that there is no need to move halfway across the country to study in a traditional college campus setting. You learn from the comfort of your own home. This one fact alone can save you THOUSANDS toward your college education.
2. Tuition Discounts
When you hear the phrase “tuition discounts,” do you automatically think grants and scholarships? Those aren’t the only ways to save. In fact, when you look at the time it takes to apply for all of these and how many applicants are actually awarded, you quickly see the math just doesn’t add up.
OnlineDegree.com has a mission to make college more affordable for adult students. One of the ways we’ve done this is by organizing numerous discounts at colleges and universities across the country.
Simply put, you could save between up to 25% depending on the school you choose. This can equate to a huge amount of savings. And the best part? You don’t have to spend hours applying for these tuition discounts, they are all available to you when you register.
3. CLEP Exams
The College-Level Examination Program (CLEP) helps students earn college credit for what they already know. These credits are accepted by 2,900 colleges and universities across the country.
Essentially, CLEP allows adult students to demonstrate mastery of college-level material so they may earn college credits. By earning these credits, you can save thousands of dollars in tuition expenses, student-loan fees, and book costs. Consider that taking the CLEP exam only costs $85 while the average cost of a traditional college course is more than $900.
4. Take Advantage of the Armed Forces’ Military Tuition Assistance Program
If you have always wanted to serve your country and join the Air Force, Army, Coast Guard, Marines, National Guard, Navy or Reserve, you can do so AND get a free education at the same time! Through the Armed Forces’ Military Tuition Assistance Program, students can get up to 100% of their college tuition covered. Serve your country AND avoid the common trap of racking up a bunch of student loan debt? That sounds like a win/win to me!
5. Free Courses for Credit
And speaking of earning college credits to help you save BIG…
OnlineDegree.com invites you to take as many free online courses as you’d like from the comfort of your own home. You can learn about marketing, computer programming, psychology, education, and much more from excellent professors around the country.
We’ve gone ahead and built relationships with universities around the country that can give you credit for the free courses you’ve finished. Not only does this give you the ability to save thousands on your degree, it also allows you to potentially earn your degree sooner.
6. Adult-Friendly Schools Usually More Affordable
Not long ago, you would never have heard the phrase “adult-friendly” or “age-friendly” university. But now there are dozens of colleges and universities around the world.
The fact is, more and more older adults are heading back to school to earn their degree, and this has caused institutions to take notice and cater to this group of deserving students. Recognizing the importance of an affordable education, many adult-friendly schools offer nontraditional learning platforms, such as online curriculums or hybrid learning, that allows adult students to save and earn their degree in a shorter amount of time.
OnlineDegree.com is proud to have partnered with many colleges who share our mission of making college affordable to adult students.
Are You Ready to Go Back to School?
Now that you know you can go back to school and earn your degree without breaking your bank, what are you waiting for? Enroll with OnlineDegree.com and get started with pursuing your dreams!
To your success!
*Image attribution: TonyTheTiger [CC BY-SA (https://creativecommons.org/licenses/by-sa/3.0)]
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