Parents read things like, “the cost of college has been rising much faster than the rate of inflation,” but it’s hard to put that into context. However, it’s really instructive if we do.
In 1971, Harvard’s tuition was only $2,600. If inflation was the only factor contributing to the increase in tuition since then, today’s students would only be paying a bit more than $15,000 per year. The reality is, today’s Harvard students are paying more than $47,000 annually – just for tuition. That doesn’t include where they sleep (room), what they eat (board) or the necessary textbooks, supplies and other miscellaneous fees.
I don’t mean to pick on Harvard. Full time tuition at Auburn for a non-resident was $2,585 back in the 1985-1986 school year. Now it’s $28,040. Don’t you wish your 401k balance experienced the same compounded annual growth rate of 8.27% for decades and never saw a negative “market correction”?
According to Bloomberg, college tuition and fees have increased 1,120% since they began tracking this information in 1978. Every institution of higher education has participated in this escalating arms race. Higher education represents one of the largest unregulated industries in our economic universe. Of course, schools are going to promote the fact that they have the most reputable professors, modern and sleek student housing, a completely “wired” campus, the best climbing walls and espresso bars. They are competing for our hard-earned money. It makes sense that they double down on the sexy amenities like a five-star hotel would and pass the costs along to us.
The cost of college has accelerated farther and faster than any other category of spending we measure while wages have remained constant or declined. In plain English, college consumes more and more of our paychecks, and parents no longer have the luxury of “dealing with it when we get there.”
Source: Bureau of Labor Statistics (BLS); IPEDS
So, why on earth would we continue to feed into this madness? Because the only thing more expensive than a college education is NOT having a college education.\
We need to remember that college is a business. There is a strong money motive. We need to strap on our protective armor and be prepared to do battle with a consumer mentality, not just the heart of a parent.