The Growing Cost of A College Education

I’m sure that by this point everyone is aware of the increasing amount of student debt that college graduates in the United States are racking up. However, have you ever stopped to wonder, just how did this number get to be so high? Why are so many students unable to pay off their loans following graduation?

IOWA CITY–College tuition across the country has been increasing two-fold over the last decade. What used to seem to at least be affordable has now increased by epic proportions, making tuition difficult for students and parents to afford. Little did we know at the turn of the century what we would inevitably end up paying for tuition.

But just how did we get here? When did attending college turn into buying an education–and at a steep cost, no less.

How Did We Get Where We are Now?

According to the report The College Tuition Spiral: An Examination of Why Charges are Increasing, there are six explanations behind the large spike in college tuition and fees.The first is that colleges themselves are experiencing increasing fees. Colleges are also offering expanded services, which they use student tuition to fund. Non-tuition revenue sources are contracting. More students are applying for student aid, which allows institutions to increase their charges. The competition between schools has led to increases in tuition. The decline in the standard college-age group may be a factor.

In Tuition Rising: Why College Costs So Much, Ronald Ehrenberg discusses several of his own ideas for increased tuition rates. The first is that we live in a winner-take-all society, where each institution wants to be the best they can in every aspect and be better than the next college or university, which requires more funding. The second factor is shared governance, where at a public institution, trustees often do not have power over the cost of tuition or other fees. Ehrenberg also cites that certain government policies make it necessary for schools to increase tuition.

Current Status

As we all know, tuition is at an all-time high right now. In the last ten years alone, tuition at the University of Iowa has doubled from $4,191 in the 2002-2003 academic year, to the current 2012-2013 tuition of $8,057.

“I just can’t believe that ten years ago I would have been paying half of what I am currently paying to attend college,” said Ashlee Venema, a junior at the University of Iowa. “It’s absolutely shocking that tuition could grow that much in just ten years. It’s kind of sickening to think about.”

The average amount of student debt in the United States increased by nearly $7,000 in just ten years.

Nationwide, tuition at colleges and universities is the highest it’s ever been. The cost of attending college has reached epic proportions, and unfortunately, it appears that the increases won’t be stopping any time soon.

The Effects

How do these sharp increases affect college students paying for their education, or more likely, their parents who are funding it?

“It’s a lot of added pressure. When my two boys were attending college ten years ago, we only had to pay half of the amount that we’re paying to send Jenna to the University,” said Debbie Lenmeyer. “But we want Jenna to be able to receive a quality education, so what choice do we have?”

Debbie, like a lot of other parents, feel trapped by college costs that they cannot escape. It’s tough when parents want to be able to pay for their children’s education, but at the same time they are adding extra stress on their finances.

On the other hand, some parents feel that their child’s education isn’t theirs to pay for.

“My husband and I feel as though our children should pay for their education themselves. It’s not that we don’t help them out with any of their other expenses, but we feel that it teaches our girls more responsibility and really helps teach them to be smart with their money,” said Lisa Roth, mother of a two graduates and a current student of the University.

Lauren Shake, a sophomore at the University, feels bad for the financial burden placed upon her parents.

“I got a job and began working a few hours a week because it’s not fair to my parents that they pay for my tuition and living while I just sit around doing nothing. I feel bad that they have to pay so much for me to get an education, so working is my small contribution so that they don’t always have to give me handouts.”

In a society where higher education is almost always a necessity in scoring a job, it doesn’t appear that college enrollment is going to decrease anytime soon. With that, we can make the educated guess that as long as enrollment is up, tuition will go nowhere but up.

Why Do You Work?

The majority of college students on campus work some kind of job. That job might be so that they can pay for rent, tuition, bills, etc, or it may just be so that they can have a little extra spending money.

Many students agree, their parents shouldn’t have to be taking on all of the financial burden themselves. Students like Jerrica Adair and Jinxiao Zeng work campus jobs so that they can have personal cash that their parents need not provide them.

Other students, like Lauren Shake and Ellie Smith, say that they think it it unfair that all financial aspects of their life be paid by their parents. They work so that they can have a little extra spending cash, but also to pay for odds and ins that their parents won’t have to cover.

Chart

Click here for a chart comparing tuition increases at schools in different regions over the years. No state is spared in the increasing battle against tuition. We can see this through the comparison of three schools located in different regions. While some states, such as Florida,  may have cheaper tuition than states like Michigan, they are still experiencing the increases felt nationwide. If these trends continue, college tuition prices will be nearly $16,000 in ten years!

Tuition Growth at the University of Iowa

Have you ever wondered why student debt has increased to the point where post-grads can’t keep up on their payments. Perhaps it’s because since 2000, tuition has more than doubled. In 2000-01, tuition at the University of Iowa was $3,204 dollars for residents and $10,966 for nonresidents, according to the Office of the Registrar. Now, in the 2012-13 academic year, tuition has more than doubled to $8,057 for residents and $26,279 for nonresidents.

Click here for charts illustrating tuition growth at the University of Iowa for residents and nonresidents since 2000.

It is no wonder that people can’t keep up with their loan payments after college. A four-year college student racks up a debt of $32,228, and that’s just if they are a resident of the state. A nonresident student who spends four years in their undergrad ends up with a debt of $105,116!

Don’t ever let anyone tell you that education comes free…in fact, education doesn’t even come cheap when you look at the final outcome. These high debts are the reason why people can’t keep up with loan payments and take years and years to pay off their student loans.

If tuition continues to increase at the rate that it has, our kids will be paying somewhere around, or over, $20,000, and that’s only if they choose a school in the state that they reside in! Ouch, makes me rethink the whole kid idea.

“Help me, I’m Poor”

As a college student who is off of their parent’s dime, it can often feel as though “poor” is an understatement. I feel as though all i do is spend, spend, spend. It often seems that the money I make at work doesn’t even reach my pocket before I have to turn around and spend it. However, I think that a lot of students would say the same thing. Often times it seems that there is no end to spending money.

Have you ever wondered how you can save up a little cash? This How To gives some helpful tips on ways that you can save money. Keeping track of your spending on a monthly basis allows you to see what things you are spending money on that you could eliminate to save more money. Setting a monthly budget also limits your unnecessary spending.

Debt? No Thanks

According to American Student Assistance, nearly 20 million Americans attend college each year, and of those 20 million people, nearly 60% of them borrow loans to pay for their schooling. The site also says that there are nearly 37 million people with outstanding loans.

Unfortunately, that staggering statistic will likely increase, as school tuition’s continue to rise. According to the article College Grads Facing Higher Student Loan Bills, Servicing Woes, the national student debt has surpassed the $1 trillion mark.

That being said, how can students, perhaps not completely eliminate, but at least decrease the amount of debt they leave their undergrad years with? Work, work, work.

By spending some of their free time at work, students could greatly decrease the amount of debt they end up with after four years of school.  A lot of students take out greater loans so that they don’t have to work during their undergrad years, but if they would just spend between ten and 15 hours of their time per week at a part-time job they wouldn’t have to borrow as much for student loans.

Another way to avoid a large amount of debt is to lessen spending. College-aged people are more likely to participate in frivolous spending. If students cut back on shopping, eating out, and other extra items they could save a lot more money. That’s not to say that all students should never go out to eat or never go shopping, but if students cut back even a little on their spending they could lessen their debt.

You’re Telling Me Work is Good for You?

In my last post, Work as a Study Tactic-Is This For Real?, I discussed how working during college can improve your GPA and help with time management. The article 7 Reasons to Work Your Way Through College lists multiple reasons why working during college is beneficial to you.

The article lists improved grades and time management along with earning money, building your resume, and career experimentation. These are the other three reasons that I see as most the most beneficial reasons to work.

First of all, who doesn’t love a little extra money. However, in my case, and I’m sure many of you as well, I have to work to get through school.

Building your resume is an essential part of working. How many jobs are going to take you seriously if you have no previous work experience? Even part-time jobs, like the jobs you work in college, look good on a resume. These jobs also provide you with important skills and experience that you can carry over into school and then eventually carry along with you into your future career.

College is also a good time to experiment with jobs. It’s a time that you can try out different jobs and see what type of career you may be interested in in the future. Experimenting with jobs in college also provides you with a wider variety of skills to carry with you into your workplace in the future.
All-in-all, working during college can be highly beneficial to you not only in college, but also in your future career. While it may seem like a pain now, those part-time jobs will help you in the long-run!

Work as a Study Tactic-Is this For Real?

According to many articles, like Students Who Work During College, it can actually be beneficial to  a students grades to work during their undergrad. This particular article found that students who didn’t work had an average of a 3.04 overall GPA, versus a 3.14 overall GPA for students who work between 1 and 20 hours per week.

Some people may be thinking “no way is that right; more work=less time for schoolwork.” However, a logical thinker could see where this would make sense. When you know that you’re going to have less time for schoolwork, you’re going to be more likely to practice better time management. For instance, say I have a big assignment due in class on Tuesday, but I also have to work both Sunday and Monday night. I’m going to be more likely set aside an adequate amount of time beforehand to finish my assignment. Whereas, if I know that I have nothing going on and lots of time to work on the assignment, I will be more likely to procrastinate and put it off until the last minute. Or, I might also be more likely to think I have a lot of time to work on schoolwork, so I’ll start one thing and forget about my other assignment instead of adequately managing my time.

So in the end, while work may make you feel stressed out and you feel as though you have no time for schoolwork, it can actually be beneficial in learning to effectively manage your time and keep yourself organized.

In the Words of the Boy Who Never Grew Up…

I never actually thought Peter Pan‘s life philosophy would resonate with me so much.

I wish I could never grow up. If only Neverland were a real place. Being a grown-up is not all the glitz and glamour I’d imagined as a child. I have never realized this more than at this stage of my life. I feel like I’m constantly being weighed down by bills, bills, bills. Life was so much easier when you lived at home and didn’t have to worry about any bills, that was your parents responsibility.

The most painful realization I’ve recently come to: the worst is yet to come. When I fully enter the real world (no, I wouldn’t exactly say I’m in it 100% yet), I’ll have school loans to pay back, health insurance, car insurance, cell phone bills, rent, the list goes on and on.

Here’s my most recent fantasy: staying in college forever.

However, that’s not realistic and soon I’ll be a real-life grown-up. Which means that while the bills stack up now, someday soon there will be many more, so I might as well enjoy it while it lasts!