Half a MILLION dollars for college?
After not receiving the annual "price hike letter" from our alma mater, this evening I decided to look up their tuition rates for the 2007-08 academic year, since I'm sure kids are receiving their acceptance letters this week. I know the tuition and fees are getting exorbitant but I was absolutely shocked at what I managed to find:
$34,500? Just for tuition? When I started a few years ago the tuition was $24,300, room and board was $8000, and there was NO student health fee. $34,500 was the recommended amount for an entire year, including books, transportation, and spending money. Glad to know you can't even buy a degree with that.
And if we extrapolate the growth into the future, what will college cost 20 years from now when I have college age children? By my calculations, it's going to cost around $539K for four years at my alma mater. And that's just for an undergraduate degree. Are undergraduate degrees really that valuable? Am I really earning so much more than I would be earning had I never stopped to get it? Is it really reasonable that parents and children work together to scrape up that much money for a no-frills degree? I'll tell you right now that I can't afford it, and many other people won't be able to afford it either. That kind of money represents the better part of a reasonable nest egg.
I think the college cost growth model won't be able to stand for long. The 2007-08 tuition figure is more than our 2006 AGI*, and the total of the costs added together ($47,156) is uncomfortably close to the median US household income. College is rapidly becoming a luxury.
*In order to increase sensationalism, I'm politely ignoring Mr. Dimes's Combat Zone Tax Exclusion, as well as his BAH and BAS. Our 2006 gross entitlements were in the ballpark of $50K. But still? College costs have exploded. When my parents were in college, their semester cost as much as my books for a semester did. Something's got to give.
Jan. 19, 2007 -- Undergraduate tuition at [school] will cost $34,500 for the 2007-08 academic year — a $1,700 (5.2 percent) increase over the 2006-07 current academic year tuition of $32,800. The required student activity fee will total $345, and the student health fee will be $679.
Room-and-board charges for 2007-08 will be $11,632, an increase of $456 (4.1 percent) over the current year's charges of $11,176 for the full meal plan and newer student housing.
$34,500? Just for tuition? When I started a few years ago the tuition was $24,300, room and board was $8000, and there was NO student health fee. $34,500 was the recommended amount for an entire year, including books, transportation, and spending money. Glad to know you can't even buy a degree with that.
And if we extrapolate the growth into the future, what will college cost 20 years from now when I have college age children? By my calculations, it's going to cost around $539K for four years at my alma mater. And that's just for an undergraduate degree. Are undergraduate degrees really that valuable? Am I really earning so much more than I would be earning had I never stopped to get it? Is it really reasonable that parents and children work together to scrape up that much money for a no-frills degree? I'll tell you right now that I can't afford it, and many other people won't be able to afford it either. That kind of money represents the better part of a reasonable nest egg.
I think the college cost growth model won't be able to stand for long. The 2007-08 tuition figure is more than our 2006 AGI*, and the total of the costs added together ($47,156) is uncomfortably close to the median US household income. College is rapidly becoming a luxury.
*In order to increase sensationalism, I'm politely ignoring Mr. Dimes's Combat Zone Tax Exclusion, as well as his BAH and BAS. Our 2006 gross entitlements were in the ballpark of $50K. But still? College costs have exploded. When my parents were in college, their semester cost as much as my books for a semester did. Something's got to give.
6 Comments:
If you have health insurance already, can you opt out of the student health fee. I seem to remember when I went to college a long time ago, you can do that. You just might need to show proof of insurance.
I think that you make a good point when you say that college is rapidly becoming a luxury. Hopefully, as you suggest, the pricing model will fall apart and it will start to become reasonably affordable again. Lord knows that either alternative (ignorance running rampant or massive, massive student loan debt) is not good at all.
Steven
finding--freedom.com
@ Anon: Unfortunately at my school the health fee was ABSOLUTELY MANDATORY. My sophomore year was when they changed it from an optional program to a mandatory fee, and there was great public outcry. Everyone had to pay it, regardless of whether or not their parents had health insurance, and if you were covered, you were not even permitted to use the student insurance until your other insurance had been exhausted, other than going to the infirmary. For most people it was a total ripoff.
At least it's not going up that much more than inflation itself. Looks like Room-and-board is right in line with inflation. This means that when it does cost $500K for college, salaries will be step with that (perhaps you make $150K a year then).
If salaries do not keep up with the tuition hikes, people will stop sending their children to those colleges that over charge and that college will go out of business without students. It's all about supply and demand.
I just recieved my tution increase information yesterday and had a mini-heart attack. Thank goodness I am almost done because I definetly would considering jumping ship if my tuition alone started to approach 50K. It's just exhorbitant and mind-boggling. Check out my related post if you are so inclined.
Dimes,
I am currently estimating $350,000 to send our 2 1/2 year old daughter to a private college when she is 18. And that is based on 3% inflation.
Scary thought.
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