[shakespear1]

College Tuition CRISIS
by bonddad
Mon Jul 4th, 2005 at 06:55:41 PDT

Every parent wants their children to have a better life. As a result, most parents will counsel their children to attend college. However, this is a diminishing possibility for more and more Americans as tuitions costs skyrocket in relation to median family income. Over the next few days, I will be posting some diaries on varies aspects of this problem. The overlying picture is not pretty. As with health care, the problems occur at numerous stages in the tuition payment system.

* Diaries ::
* bonddad's diary :: ::
*

According to the Education Commission of the States:

Nationwide, the percent of family income needed to pay for postsecondary education is 28.5% for public four-year college and 22.3% for public two-year colleges.

4-year college tuition consumes 28.5% of family income. That's a hefty number which would effectively bankrupt a family. It also indicates that families should save for tuition to help deal with the expense. However, the national savings rate is at an all-time low, indicating families are not saving. The cause of this low savings rate is topic for another discussion. However, for whatever reason, people are not saving.

While the average cost of college tuition rose by 110% between 1981 and 2001, median family income rose by only 27% during that period. (The College Board, Trends in College Pricing, 2001)

College tuition increased 5 times faster than average income over a 20-year period. That is a hefty increase. It indicates that college is slowly becoming more and more difficult for the median income family to afford. As a result, their children will have to borrow more of the their tuition. However, note these statistics:

Between 1981 and 2000, the amount of aid states allocated on the basis of need declined from 91% to 78%. (The College Board, Trends in Student Aid, 2002)

After adjusting for inflation, Pell Grant funds - the largest need-based financial aid program in the country - increased 6% between 2002-2003 and 2003-2204. This is smallest real increase since 1999-2000. (The College Board, Trends in Student Aid, 2004).

So, when families need more help, the government is providing less help. In other words, the average middle-class family is again losing ground on the American dream.



IS THERE Hope???

[PenultimateManStanding]

I wonder what the causes of this acute inflation in tuition are? Are they raising their prices because of increased demand? Who is jacking these prices up anyway? I doubt very much that the quality of the education is getting better, more likely worse. This is another one of those canary in the coal mine issues, I think.

[FoxV]

$this->bbcode_second_pass_quote('shakespear1', 'H')owever, the national savings rate is at an all-time low, indicating families are not saving. The cause of this low savings rate is topic for another discussion. However, for whatever reason, people are not saving.

[shakespear1]

When I read this information it really took me back. It is quite apparent that the country is turning into haves and have nots. I didn't realize the magnitude of the numbers. And we are dumping money into that death pit called Iraq without even winking.

When I went to college my parents helped me a bit and I worked in the summer. THAT WAS ENOUGH.

Now, it is apparent that this has all changed. This is what you learn by working overseas too long.

[I_Like_Plants]

If you can foist yourself off at African-American, Pacific Islander, or some other privelaged group, you'll get so much money thrown at you for college you won't know what to do with it.

This is one of the many things that make me happy Peak Oil is coming, because all those whites who had to settle for no college and become plumbers and bike mechanics and carpenters and swapmeet sellers will do better than some person-of-color with a PhD in H.R. who's lived in a world where things have been made artificially easy.

Makes me personally glad that living without a car, or a phone, or as much food as most people in the US are used to getting, and even having to do stuff like sew clothes for repair and for patching holes are kind of things that are "been there, done that" for me. The nonwhites never had to patch no clothes where I grew up. Seemed awfully well fed too.

[crzydmnd72]

Yet how many of us continually hear about funding crisis at state colleges? Costs are up, they are broke, someone is getting rich

[crzydmnd72]

$this->bbcode_second_pass_quote('I_Like_Plants', 'I')f you can foist yourself off at African-American, Pacific Islander, or some other privelaged group, you'll get so much money thrown at you for college you won't know what to do with it.

This is one of the many things that make me happy Peak Oil is coming, because all those whites who had to settle for no college and become plumbers and bike mechanics and carpenters and swapmeet sellers will do better than some person-of-color with a PhD in H.R. who's lived in a world where things have been made artificially easy.

Makes me personally glad that living without a car, or a phone, or as much food as most people in the US are used to getting, and even having to do stuff like sew clothes for repair and for patching holes are kind of things that are "been there, done that" for me. The nonwhites never had to patch no clothes where I grew up. Seemed awfully well fed too.

[shakespear1]

I have a MS but have and do work on a farm when I have time.

Come to think of it I enjoy it more than being in the office but it is tough work and Mother Nature can hit below the belt.

[MicroHydro]

Knowing what we know about peak oil, a college education is of dubious value. Look at surnames and you can see the occupations of the future:

Fletcher, Farrier, Furrier, Tailor, Cook, Weaver, Farmer, Cooper, Miller, Smith, Baker, Shoemaker, Shepherd, Butcher, Tanner, Hunter, Falconer...

[TheSupplyGuy]

Well ,what if you major in Forestry, lol?
Anyway, I got a notice 3 days ago that tuition would be rising 7.5% this year due to decreased state funding and building construction costs. Here in South Carolina, the lottery is a godsend, because you can easily qualify for $5000 a year, and the better students get $6700. I just hope the scholarship offer I got in the mail the other day will help offset the new cost.

[DomusAlbion]

MH, you forgot ...

Tinker, Tailor, Soldier, Spy

Oh and Brewer, ...

Wheeler
Cartright
Card
Archer

[I_Like_Plants]

Yep I have one of those trade-names myself!! In fact when I was a kid I thought my mom chose our name "Carter" because she was always making comments about "carting" around this and that and us kids......

[jaakkeli]

I really, <i>really</i> hope it doesn't come down to going back to those trades we're named after.

My family name comes from a torturer...

[shakespear1]

The Trades can be as rewarding as those desk jobs.

My favorite is Carpentry.

[pup55]

I had to comment on this.....because it is such an interesting question on several levels.

I will leave aside for a moment the idea of whether or not the parents should participate in the funding of some of this because it is a family finance decision that should be made individually, but one of the "pros" is that it is irresponsible of the parents to leave the kid with a stack of debt when he or she graduates because he or she is quite likely to end up not being able to afford a house and have to move back in with the family after graduation.

Here are some case studies:

a. A family in our neighborhood is sending their kid to the local commuter college. They have a $250,000 home full of nice furniture, 2 SUV's and a big bass boat. But in order to pay for Freshman year, they have taken out a $10K loan. The kid is a hellion, wrecks cars, and drinks heavily, so there is substantial chance of him to flunk out leaving mom and dad with the $10K bag with no college credit to show for it. He has yet to get a summer job to share in the fun.

Discussion:

Should the parents downsize the lifestyle to send this brat to school?
Should the parents make the kid take out the loan?
Should the parents take out a home equity loan to do this?
Should the parents kick the kid out of the house and let him sink or swim?
What does this tell you about the parents if they have this stuff around but cannot come up with $10K to pay for a year of college?

b. Tuition and fees at the local commuter college are about $4500 per year, and books are estimated at another $1000, so $5500. The local rate for a waiter at one of the local sitdown restaurants is $7.50 per hour for english speakers. At this rate, it would take 733 hours to pay for a year of college. 600 hours could be had in the summer working 8 hours a day for 75 days (six days a week) and the remaining could be done for 4 hours per week during the school year.

So, it's possible for a kid to live at home, brown bag their lunch, commute downtown using mass transit to the commuter college, have a part-time job on Saturday afternoon, and make it through college without taking out a loan.

If they choose to live in the dorm, it's another $5000 for the dorm rental and the meal plan, but this could also be managed with 20 hours a week at the pizza place during the school year, plus you get to eat cheap, so you would not necessarily need the meal plan.

Note that this does not include the trip to Cancun for spring break, a car, or other frivolity.

Discussion:

Should a kid have to work like a dog to get through school?
Is it worth sending the kid into debt so he or she can not work, and go to Cancun on spring break?
Is it better to work like a dog during the four years of college, rather than goof off, in order to avoid the debt after he or she graduates?


c. Another kid in the neighborhood passed up a generous in-state tuition break and an opportunity to go to nearby Football U and instead chose to go to Upper Crust U, a private college in a neighboring state.

There at UCU, she "studied" for two years, but decided that she hated going to school with snobs, and decided to transfer back to Football U to be with her friends. She incurred $30,000 in student debt, but, because UCU had some kind of innovative cirriculum designed to bring out the inner scholar, etc. none of her credits will transfer to Football U so she would be basically coming in as a freshman, with $30K in debt and no credits to show for it.

Discussion:
a. Is the difference in education (and earning potential in the labor force) between UCU and Football U worth it in the first place?
b. Should the kid have to go to the commuter college for a few years and work like a dog to get back on track.
c. Was any of the previous debt worth it?
d. Should she go into even more debt at Football U or be forced to work like a dog at the pizza place, per the above?
e. Should the parents have put a stop to the UCU experience before it started.
f. What does this tell you about the parents, who live in another $280,000 house in the neigborhood? Should they downsize their lifestyle to send the kid to school?

Moral of all this:

I do not feel too sorry for any of the above cases. It's possible to go to a cheap college, (working like a dog), and making it through without incurring the debt. It's irresponsible, in my opinion, for the parents to allow a kid to enter the real world with $120,000 in debt under just about any circumstances, and if they cannot afford to help, it's their fault for not downsizing their lifestyle in order to sock away enough money to send the kid to commuter college. If the kid wants to go to Football U instead of the commuter college, then he or she should have to participate, but with the idea that there be minimal debt afterward.

In all of these cases, going to college, and therefore deferring entering the labor force for 4 years , is a conscious life management decision, and the benefit should be the maximization of income after graduation. To incur the debt and thus end up minimizing disposable income will defeat the purpose of going to college in the first place, so it's pointless. Most people that take out this volume of student loan NEED to go to college to get smarter, because it is senseless to take on this debt (there are obviously some exceptions).

Surely the forum will share with us different opinions on this issue.

One more issue: The US Military apparently has a generous scholarship program, if you survive your tour of duty.

[Roy]

Working at a large state funded university, I can offer a little insight to the increasing costs.


I graduated from this university in 1992. My tuition started out at $600 per semester in 1987. When I graduated it had risen to over $1000 per semseter.

Now, the tuition is hovering at about $1700 per semester.

Seems like my employer is spending HUGE sums of money on providing high technology. At the demand of the academics. We are providing, for example, gigabit internet connections to nearly every desk on campus. Now the push is for 10 gig speeds. This costs money and the value of it to the average user is not justified by the costs IMO.

I was just assigned to work on the LONI (Louisiana Optical Network Initiative) project. The goal is to interconnect every university in Louisiana with a physical fiber optic network. It will cost millions. Many millions.

I guess the benefits of this project are outside the scope of my understanding. Its just a way to spend money, hire more people like myself, and enrich the outside contractors who get the job.

Its like a big welfare project for rich contractors almost. Kind of a micro-cosm or what's going on at the national level in Iraq.

I start on it this week and we must have it complete by August 30. The rush job will of course cost much more. No one cares. When I asked why the rush, I was told that "its a prestige project for the governor". Oh, ok.

Lets double the cost of theproject so we can make the governor look good.

And one more thing for good measure. Our university has decided that all new fleet vehicles must be either 3/4 ton crew cab pickups or full sized SUVs. The older minvans and small station wagons we used to have are being phased out in favor of Suburbans, Durangos, and Expedtions. Even the police dept is switching to Expeditions. I don't get it. IT sure isn't very forward thinking IMO.

Our dept has two vehicles for over 500 workers. Our student workers use a 3/4 ton Suburuban to carry a box of papers slightly more than a 1/4 mile, twice a day, AC blasting. Why they can't walk (OHMIGOD no way) is beyond me. ITs just wasteful. Again a microcosm of the big picture.

[shakespear1]

Thanks Roy for that inside look at what is going on here. I am still amazed as most of the educational process requires good educators and the facilities. If I had a super fast internet connection when I went to the univeristy I doubt it would have made an difference in my first 3 yrs. there. The course did not require any such speed.

Once you leave the U you will probable not even see such speeds in your work place.

AMAZING

[shakespear1]

Does anyone know if this is true --- > "The US Military apparently has a generous scholarship program"

I have heard just the opposite.

[pup55]

http://www.goarmy.com/benefits/education.jsp

Be all you can be!

[frankthetank]

Locally @ the UW(isconsin)-La Crosse they've had to cut enrollment because of cuts in state funding. Along with the enrollment cuts, the amount of kids trying to enter the college has risen dramatically making it harder to get excepted. I don't understand why they don't just jack the admission up 50% and let more of these kids that qualify in. (why is the state funding this?)

I went to this university, but didn't graduate and will say its a great school with a good reputation. I took out one loan for $1000 bucks and paid it off 6months after i was out of school (the day it began to accrue interest). My wife graduated from this school with 13K in loans. Having saved money during college and working hard after she was done, paid it off in less then a year!

One other thing...just because you have a degree doesn't mean your guaranteed a job! You still have to know someone or get lucky