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.
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.
http://www.ecs.org/ecsmain.asp?page=/html/issue.asp?issueID=199
great info, and I was wondering about it. Thanks for keeping us updated.
I firmly beleive, it is in their agenda to do what is being done, in becoming the total elite with only the wealthy having any advantage. Slavery is NOT dead.
I believe that the escalating costs of college are detrimental to public high schools. I work in a poor, urban district where probably (just guessing here) 60% of my students have a job. I can’t tell you how many try to sleep in class because they worked late the night before.
I am sure that many would prefer to work, because they see the money as good, and being teenagers, usually don’t have the foresight to see how their jobs have prevented them from playing sports, getting involved in activities, or getting better grades. Many of them don’t even see college as a realistic option.
Reading your latest here makes me wonder what the cumulative costs of living are. You’ve written about (among other things) % costs for medical and now college, so I wonder what level of income is “middle class”? Family of four w/one college and one teen, both at home.
Average cost of housing here in the Central Valley in California runs close to 1000/mo. for a decent two-bedroom apartment.
It really depends on the area. For example, LA would have a complete different and higher median income than Butte, Montana.
Understood. A national median is a relatively useless number unless adjusted by percentage by region. Like your cites to college tuition, the numbers will vary by type of college/university and State. So what do economists use for a baseline middle class income?
Jeez…you can’t even get a nice 1BR for 1000 here in Boston…and to think I had a spacious 2BR (with fireplace) for about 600 in rural MN.
I remember reading a couple years ago that a living wage (not sure exactly how that was defined) for a family of 4 in Boston is around $40,000.
Try here: LivingWage
It’s also worth noting that, during this same time period, the number of entry-level jobs requiring a college degree appears to have increased.
The idiot daughter of an old friend of mine, without telling anyone, just quit college and joined the Army. She couldn’t afford to finish her last 2 years and the family couldn’t afford to help her. So now she is in basic training. The Army paid her a whopping sign-up bonus and a whopping bonus to sign-up to be a truck driver after basic.
The combination gives her enough money to pay off all her previous loans and to get her undergraduate degree.
If she survives, of course.
The Army met its recruitment goals in May and I’m sitting here wondering how many of those recruits where in the same situation as the idiot daughter. (I love her; but … she’s an idiot.) These rotten pr!cks are eliminating student loans and turning around and giving money away to boost military recruitment.
How much clearer could the priorities of this administration and the GOP be?
Well, I was just here reading a diary that sent me here where I found out that the Army reached its May quota by moving the target.
Why do I never learn the MSM spreads the BS nice & thick?
Tuition is rising in many state universities, in response to the financial crunch of state funding.
In Michigan (my state), our Republican legislature is taking large funding amounts away from the two universities that serve the poorest students (in the Upper Peninsula and in Detroit), and re-directed that funding to universities in two of the wealthier counties in the state. If our governor vetos the bill, it will likely pass over her veto.
The funding cuts were quite severe: services to students will drop, and tuition increases will be inevitable. Programs that favor money-making occupations will get more money, regular, educate-the-citizenry areas will get the minimal level of funding. Faculty and staff salaries will be frozen and salary cuts are not unthinkable. Pell grants from the federal government have become harder to get, as scholarship money becomes rarer.
Lovely. Yes, we have an oversupply of college educated citizens, don’t we?
Ditto in the once-great university system of Wisconsin, where we used to say we were state-supported.
Now we say we’re state-located.
Actual costs of educating a college student have not gone up much. Faculty salaries actually have gone down in real dollars (and in reality, with only a 1 percent raise in several years, while we’re being ordered to pay more into our pension fund — despite state statutes otherwise — and much, much more for our health insurance). The major cost has been to campus physical infrastructure and equipment, with constant computer upgrades (hardware and software) and the necessary rewiring of old buildings.
So it’s not that actual costs have gone up much — it’s that tuition has had to increase to make up for public funding, which has gone down a lot under Republicans. For example, the University of Wisconsin-Madison now gets only 11 percent of its operating costs from taxes. It used to get about a third. That means almost 20 percent of the costs have had to be covered by tuition increases.
The only bright spot in the last quarter of a century since the “conservative revolution” have been the Clinton years, when he reinstated the tax deductions for interest repaid on student loans — after graduation. Of course, the Repugs keep cutting the loan funds.
There is no question that at my urban, working-class campus, the alternative for many students has been joining the National Guard and the reserves.
And I just heard of another who died in Iraq.
I just went and checked the tuition and fees for the University of Texas, from which I obtained 2 degrees.
When I graduated from high school in 1966, it never occurred to me that I couldn’t go to college, even though I could expect not one penny from my parents – for anything – after I turned 18. LBJ, the Great Society. We knew that if we had what it took academically, and were willing to do the work, we could go to college. That simple.
First I had a scholarship from a private foundation that paid tuition at a private college. When I transferred to UT in 1970, I paid $50 for tuition and fees. Another $50 for books and all I had to worry about was living expenses after that.
Today? Here are the figures for one year of tuition and fees only (no books, living expenses, etc. just tuition and fees – at a public, state “supported” university): Texas Resident $7,438, Non-resident $17,474.
Federal tax cuts squeeze the state budgets. Our republican governor and legislature have only one goal – lower taxes for the rich. Result: Look at the numbers above. What the hell happened to investing in our future?
I have often thought that the Republican motto should be “Penny wise, pound foolish.”
Got my doctorate at UT in 1988. My tuition and fees maxed out at $350 per year – simply unbelievable now. Since then, of course, Bush as gov. got the untouchable PUF (Permanent University Fund) into private hands for management (his cronies are managing – no big surprise there), and they lost money hand over fist, during years when the economy was doing quite well. Quite a feat. When I think of privatization of Social Security, I think of the PUF fund.
So tuition, one of the great boons to young adults in the state, went up and up. That’s where the real long-term damage will be – a much less educated citizenry.
Ph.D. at UT in 1988 that is. We probably walked past each other on Speedway a time or two. I was in Patterson Labs trying to figure out how cells move. Where were you?
I teach at ACC now. It just kills me when I see how my students struggle to pay for community college, and I wonder how they’re going to manage to pay for their next two years at a four year college. Many won’t. Most of the ones who do will graduate with so much debt that it will seriously limit their options in life.
Considered the economic damage to our country of not only all of the bright, talented people who won’t get the education that would allow them to make the most of their potential, but of the debt burden on the ones who do manage to get a degree. First homes not bought or postponed until middle age, investments not made, jobs taken that don’t make the most of talent but are necessary to pay off the loans. And how do they build up a college fund for their own children when they’re still paying for their own college? A friend who is a veterinarian graduated from A&M with $40,000 in debt.
I was in Belize last October and someone was explaining their way. Students pay tuition only for the first year of college. After that, it’s free. What a sane idea. Show you’re serious (by paying for it) and that you can do the work for a year and then we’ll pay for the rest.
I was in Psychology, Mezes & elsewhere, before they built the big new extravaganza psych building on whatever street they’ve renamed Keeton. I’m in Michigan now, teaching at WayneSU. Most of my students work, too, many – too many – full time. They are struggling to pay for college and its not getting any easier.
Spent a summer back in the Pleistocene babysitting Devendra Singh’s rats while he was in India. (This was probably the paper that resulted: Singh, D. (1974) Role of preoperative experience on reaction to quinine taste in hypothalamic hyperphagic rats. Journal of Comparative and Physiological Psychology, 86, 674-678.)
He’s an . . . interesting . . . guy. Great cook. Told some of the funniest stories I ever heard. I still dine out on them.
Pell Grants: Weren’t they severely cut or even eliminated in the most recent Bush budget? I recall some discussions about that.
Quite a few people who had been eligible for Pell Grants in the past are now no longer eligible. They re-set the eligibility factors in a way that cut off a lot of lower middle class students. Family incomes was reset to require contributing more without full consideration of local tax burdens, for example, though local taxes have risen in many cases. National estimates are than over half of Pell recipients will be required to contribute hundreds more to their college expenses than in the past.
Yes, my daughter lost her Pell grant this year. We are right on the cusp.
Making things more difficult is the fact that we have another child entering college & will be paying for both.
One thing I wanted to add to this discussion is that if you’re lucky enough to have a kid who can get into a good private college — one that is well-endowed — scholarship aid can be very generous to those in the lower middleclass (ie families near median national income).
For us that made private colleges more affordable than the state university system, even though the state tuition,board and fees are about 15,000 compared to nearly 40,000 per year for private college.
Because the state system has raised fees to the point that they surpass nominal “tuition,” even with free tuition (for high academic achievement, which both our kids qualified for), the cost would have been prohibitive.
For young women, the old seven sisters are very good bets. They are terrific schools.
Yes, you are right about private schools. I went to a small liberal arts college, one of the nationally ranked ones. They practice “Need Blind” admission. That is, they admit students without reference to their funding needs. And once admitted, they provide whatever students need to pay the cost, even though that cost was quite high compared to state university tuition.
I left college with one loan of a bit less than $5000, no interest or payments while I continued to go to school, half of which was forgiveable with certain kinds of work – teaching, public service of some sort, e.g. working for a non-profit, legal services, health services, etc. A very very good thing, and cheaper than the cost of my brother’s state university degree.
Here in SE PA, my college tuition for my doctorate has risen from $770 per credit hour in 2003 to $999 per credit hours in 2005. Luckily, I am more than halfway through, but I realize that I may have to delay my completion of the program for financial reasons (I don’t want to have to get any loans because I only have a few years before my kids are in college).
In comparison, my undergraduate degree cost me a total of $500 per fulltime semester, because I got a great deal of financial aid.
I am worried about how in the world I’ll be able to pay for the kids education (even if they help pay for it), because I can see that the public funding for higher education is going to be cut more and more severely if we don’t have a significant shft in the direction this country is heading politically.
…goes to people who don’t need it. Too many parents have made the decision to buy a beach house, four SUVs, a McMansion, and loads of other stuff, and then apply for financial aid for their little princess because their cash is all tied up.
And they usually get it, because their suburban kids are just what colleges are looking for to ‘raise the profile’. They come from competitive schools, they have decent SATs, they have loads of community service.
Schools give out much more money nowadays as merit scholarships. The truly needy, kids from less-highly-ranked schools who are working nights to finance their lunch and dinner, don’t have a chance at that money.
To reward bad behavior? To reward good behavior? To punish bad behavior? To let virtue be its own reward?
The scams people run to get more inflationary dollars from the government are mind boggling. Should the government actively punish the scammers, or passively withhold money?
Should hard working, capable students be given merit scholarships? Should hard working, but non-academic types be given money for college or something else?
You can’t please everybody.
I see government’s role as trying very hard to provide a level playing field for all of its citizens. Providing educational opportunity is neither reward nor punishment – it is a good investment.
I believe that it is in everyone’s best interest to have a well-educated citizenry. SO MANY of our problems are caused by lack of education – including higher crime rates, outsourcing of jobs due to lack of qualified workers, ignorance of the consequences of environmental policy decisions, and more – that the government should attempt to provide equal educational opportunity for all, based on an individual’s abilities and performance. If children are given REAL opportunities to succeed at the lower levels, they can then be held accountable at the college level and higher, and afforded the opportunity for higher education according to their skills and talents. And yes, higher education should include opportunities to learn a trade.
Nothing less than an educational “Apollo Project” would do at this point, so I’m not holding my breath for reform. But again I say that providing educational opportunity is not punishment or reward, but prudent investment.
I like it!
It took Sputnik to get a big infusion of federal support into education (especially science and math).
Unfortunately, I don’t see 9/11 producing the same sort of emphasis. Although one grants administrator did ask me if I couldn’t do some sort of terrorism research with children, and get some of that “Niagara” of money related to fighting terrorism. Somehow everything I think of doesn’t quite seem like it would pass the political screen of this day.
I’m caught up in it myself. My grad school tuition is skyrocketing and I can’t seem to get the same amount in student loans as I once did.
Interestingly enough, the students over here in Germany are protesting. Until recently, higher education was free. Now there is a proposal to charge them 650 euro for tuition. They’re protesting, for one they’ve camped out on main campus in tents for three weeks now…kinda a fun protest in the evenings.
At first, in regards to my tuition costs, it was hard for me to have sympathy. Then I realized that they have no financial aid system to help…no scholarships, grants, or loans. There was never a need before and now it’s becoming a mess. Still, I prefer the “welfare state” as I think it is a great idea to have free education, so I support the students.
-besides, they grill great bratwurst at their protests!
I have no problem with merit scholarships. However, when public funds are spend on scholarships, I would set some strong priorities on which meritorious students get the scholarships. First priority would be students of high merit who are poor. In addition to family income (where lower income relative to expenses gets higher priority), I’d add in factors such as being a first generation college student, the student having worked and demonstrably saved money for college while in high school, having attended an impoverished school district, etc. It would be hard to come up with a formula, but I think it could be done.
In Michigan, a little known college scholarship fund for kids who were on public assistance before high school was closed down, and funds were shifted to provide scholarships to students scoring highest on the state MEAP test (our current NCLB) test. Of course, almost all of the MEAP scholarships have gone to students in the better, wealthier school systems.
I work for a small private university in California in the business office. In tracking comparable size schools and nearby state colleges and universities we have found that tuition and housing costs are averaging 7-9% increases over the last 5 years.
At the private college level this type percentage increase becomes quickly prohibitive as financial aid is not increasing at the same rate. Our university contributes on average 35% of the overall tuition back as scholarships. This covers the cost of classes but not the high cost of housing in the Bay Area.
Recently a seminar I attended went over the continuing decline in need based financial aid provided by the State of California. With the ongoing budget crisis in the state there may not be cuts, but a lack of increases in aid will have the same effect based on skyrocketing tuition costs.