College Tuition: Do You Get What You Pay For?
College tuition at most schools increases at a rate of 4-5% every year. These days, this steady increase in cost has resulted in an enormous financial burden for middle and lower income families. To provide equal educational opportunities for these families, colleges constantly strive to augment their financial aid budget and dole out thousands of generous financial aid packages each year. Meanwhile, those who do not qualify for financial aid have to shoulder the exorbitant cost that reflects the value of possessing a college degree in today’s job market. In other words, regardless of socioeconomic status, college tuition normally represents a significant chunk of a family’s income. And despite the many hackneyed expressions about education being priceless, there is in fact a price tag on higher education—and a big one at that. This article will examine higher education from a purely financial perspective.
Many parents, teachers, and college counselors will try to motivate high school students to do well in school so they can go to college and thereby increase their opportunities in life. Others take a more relaxed approach to grades and college admissions, passively believing that their students will find their own way in life. What many parents adhering to this latter philosophy do not realize, however, is that no matter what college a student attends, he/she will be hard-pressed to acquire a quality college education for less than $200 grand, or an investment equivalent to a quaint, two-bedroom home. The chart below illustrates this investment by highlighting the costs of schools in popular collegiate areas. Of course, there are fantastic public institutions for those who wish to remain in their home-states and pay slightly less, but even these tuitions are on the rise due to heavy budget cuts in government funding. Moreover, many would argue that, even among schools that surpass the $200K benchmark, there is a wide range of quality in educational programs. This arguable reality directly undercuts the age-old wisdom, “you get what you pay for,” when it comes to college education.