College tuition

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When I graduated, or walked across the stage anyway, from a well-known regional four-year liberal arts college in 1994, tuition, room, and board was less than $13,000 annually. Graciously, because I did not qualify for financial aid, my father paid the tuition for me. I confess that he was a well-paid business professional; however, even at his income level, he would be hard-pressed today to come up with the $40,585 dollars annually for today’s tuition, room, and board at the same institution.

Using FAFSA‘s Federal Student Aid FAFSA4caster, today, given the same Federal AGI (Adjusted Gross Income) that my father earned in 1990 (which, if he were still working would be much higher) I would qualify for about $7000 in Federal Aid, including work-study, for which I did not qualify in 1990 either. The EFC (Expected Family Contribution) would be $14,319–$1500 dollars more than my father actually paid in 1990. That would leave an additional $19,000 for the first year alone–not to mention books, fees, recreational expenses, gas (which is nearly 4x higher per gallon than it was between 1989-2001)–and sure to be more in the ensuing four years. I can reasonably assure you that I would not have been able to attend the same college, and I don’t think it would make sense to if I had to leave with an $80,000 debt burden that I would likely carry for the rest of my working life!

Scenario #2: If my father had the same job, and his AGI were $58,000 more than it was in 1990 (very probable) I would still receive no financial aid; however, the burden on him would be 13% higher…27% of AGI as opposed to 14% in 1990. A lot to expect.

Using the Bureau of Labor Statistics (BLS) Consumer Price Index Calculator, I determined that my father’s income would have increased by about 40%, while the tuition at my alma mater has increased nearly 70%, and don’t forget the outrageous doubling of his anticipated contribution…nearly 30% of his AGI! Certainly, this would have hampered his ability to save for his retirement needs…especially at this time when Social Security can hardly be counted upon!

One must also consider that current wage increases barely cover the cost of inflation (see Matthew Scott, “The wages of recession: average 2010 raises will barely cover inflation,” Daily Finance, 2/9/10, Accessed 4/9/11.)  Additionally, if we consider median wages (because average wages are irrelevant) workers are earning nearly 7% less in 2009–the last year for which data is available–than they earned in 1990. (My methodology here was to use the CPI calculator to determine real buying power). It must also be noted that the ratio of “median” to “average” wage has declined over the years…an indicator that those at the top are earning more, a known fact, and everyone else is earning less…. In essence, students are paying substantially more for the privilege of earning less while compounding massive debt-loads in the process.

What does all of this have to do with the value of a college degree? For starters, one needs to consider why the U.S. Department of Education tells us that 70% of jobs in the future will require a college degree? Really? Really?! Most of the best paid jobs I have held required nothing more than a high school diploma, and if it is our goal to increase student performance in our primary and secondary schools–so students can go to college of course–won’t those same students be better prepared for the well-paid positions that don’t currently require a college degree? What purpose does it serve to insist that a route delivery person must first attain a college degree? A tractor-trailer driver? Bus driver? Elevator repairman? All of the preceding are relatively well-paid to well-paid positions; particularly when one considers that in 2009 that median income fore-mentioned (median can be considered “dead-center”: half the working population earns more and half the population earns less) was $26,261.29 according to the Social Security Administration. Having worked for two different vendors as a route salesperson, I can assure you that the typical vendor earns more than a typical teacher. Having worked as a city transit driver, I can assure you that at an hourly wage of $15.25, I was within the “top half” of wage earners. Why does a bus driver need a college degree? Over-the-road truck drivers, while they earn less in real dollars than they did in the early 1980’s not only outpace the median wage but earn more than the meaningless “average” wage, too. Why does a truck driver need a college degree? I have yet to determine from where this 70% figure originated, but it seems specious.

Now, don’t misunderstand me, I am glad that I earned a B.A. and an M.A. I am a better person for it, but what purpose does it serve to require a bachelor’s degree of employees when the bulk of job growth is in the service sector? Most service sector jobs pay substantially less than $26,261.29 annually, and with minimum wage now inflated to $7.25 per hour, I wouldn’t expect much increase in the pay-rate for service sector jobs. Couple this with the current national trend toward downsizing hourly government employees, and one can see an alarming trend towards privatization of a number of service-sector jobs, and with high unemployment, private business can pay “bottom-dollar”….

Again, I am not advocating that college is without merit; however, if a young person does not have a very clear picture of what he or she wants to do, it would be wise to determine a career path prior to entering college when the costs and the stakes are so high. Additionally, since we now know what the rental car companies seem to have known for decades–that the human brain is not fully developed until age 25–it probably wouldn’t be a bad idea to wait until one’s 20’s before entering college. At that point, a person will have a much better understanding of himself or herself and will be more apt to take college very seriously. If a young person has a clear idea of what he or she wishes to accomplish, then by all means, pursue that dream.

A college education is a good thing, but it really shouldn’t be required of every or even 70% of workers…especially not when the cost of attaining a degree, even from a public institution has become so prohibitive. We need to consider why we want or even need for more people to attend college if so doing may be more likely to hamper their future with debt than to actually increase wages. Food for thought. I would love to hear your comments!

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Comments
  1. Erik Hare says:

    There are many cross-currents here. One that immediately comes to mind is that if a High School diploma isn’t good enough, perhaps we should include more relevant things in the High School coursework – and no, I’m not advocating more seat time, but consideration of more alternatives that include a clear path to employment.

    Then again, as you point out, few know what they want to do in life until they are 25. If our world is indeed going to be one of constant education we need to think that through a bit – I believe that most adult ed is currently funded as a bennie for working at a big corporation, a situation that suggests the plugged-in will keep being more plugged in and that the pace of change will only leave more people behind.

    I do believe that most college is indeed over-rated. But making it worth what it takes can go in a lot of different directions if you start from the employment/productivity relevance angle and what that means to society as a whole. I think the potential fixes are vast and there will not be one single fix – especially not one that works for everyone!

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