Cost of College
Rising college costs has made major news this year especially since this past summer we saw Congress struggle to avert a deadline which would have resulted in the doubling of interest rates on new federal student loans for 7.4 million people. According to an article first published in August by the Huffington Post “the cost of a college degree in the United States has increased 12 fold over the past 30 years, far outpacing the price inflation of consumer goods, medical expenses and food.” With these huge increases in tuition, the slow job market, and the mounting $1 Trillion dollar national student loan debt many people are left wondering how to pay for a higher education and if the costs will outweigh the benefits.
According to Education Secretary Arne Duncan, “forty percent of states cut higher education spending last year, the most important factor in tuition increases.” The College Board finds that states have cut the amount of money they are giving to colleges by a total of $15.2 billion since 2007, or 17.4%. While at the same time, the number of students enrolled in college has risen 12%. That means the average public college gets a tax subsidy of only $6,600 per student, down from $9,300 just five years ago. But it’s not just cuts from the state that are contributing to these large increases in tuition. Some of the fastest rising costs on private college campuses are employee health care, insurance premiums and technology. These costs contribute greatly to a student’s tuition bill.
The Department of Education is working to make the real cost of college more accessible to students and their parents and in 2008, Congress passed a law that requires colleges to report their fees. The ”College Affordability and Transparency” lists were first published last year to fulfill part of this requirement. These lists track tuition and fees as well as the average net price at public, private and for-profit colleges and universities.
Another option to offset the costs of a traditional 4-year university are Community Colleges. As a whole, these colleges remain one of the most consistently affordable options for higher education. And despite some rises in the cost of tuition, students at most of these colleges seem to be receiving enough aid to cover most of their fees.
A recent discussion in the December issue of “Governing” magazine detailed how several states are working to reign in these spikes in tuition rates. Earlier this year, the state Legislature in Michigan set aside $9 million dollars to incentivize all public universities in the state to keep tuition increases under 4.1%. Fifteen universities across the state were eligible and everyone kept their increases below the cap. As a result, each university will receive $84,600 for every tenth of a percent their tuition hike was below the 4.1% rate. Central Michigan University kept its tuition increase at 2%, the lowest in the state, and therefore is receiving $1.8 million dollars of “bonus” money. Other states such as Iowa, Minnesota and New Hampshire have taken note of Michigan’s success and are looking at ways to tie their state aid to tuition rate guarantees or freezes.
“Reining in College Tuition” by Brian Peteritas; Governing Magazine; December 2012; p.67