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Why is public university in the United States ludicrously expensive?

Student loans, private institutions and student debt is unfair for American youth. I am curious why education isn’t a top public investment for all socio-economic backgrounds. #college #education #studentdebt

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John’s Answer

Hi Trevor great question. As stated in the previous question this is a complicated question. Once upon a time (in the 50/60's) college was free in some state run programs. NY, and California (very cheap), this is why you hear people wax poetic about being able to work their way through college back in the day. However if you look at the beginnings of the student loan movement, it was a movement that took the funding out of public hands, and put it more and more on the individual. As those funds became more and more available you saw more and more private colleges popping up. State colleges and smaller tier private colleges became more competitive for these dollars along with the changing economic environment & technologies (consider that there are jobs that did not exist 10 yrs ago that you go to college for training for).

Is it worth it for society to fund our youths education? Yes, however with a shrinking tax base we have gone more to a model of self funding vs public funding. Consider that the highest tax rate from 1935 to 1956 was 95% (I think) under Ike who was a Republican. Rather than pay these taxes companies would put those dollars into growth, bonuses for their employee's, and growth oriented programs. On the state and federal level there was investment into colleges although Administration both on the public servant side and the college side was no where near as it is expensive today. So while taxes went down (less money to spend on social programs), politician's salaries and administrative salaries, as well as overall expenses went up. These things happened while at the same time we went from a public funded model to an individually funded model.

Is it worth it? Yes, there are great state funded colleges out there to attend for relatively low amounts of money. I live in Georgia and we have West GA, Kennesaw State, GA State, and Clayton state all within a short driving distance from downtown Atlanta. Stay away from private colleges as much as possible, choose your major strategically, enjoy your college experience, take advantage of networking experiences, work and internship, but try to keep debt down as much as possible. Keep in mind that most people dont work in their major at the end of college, so if you change your mind near the end of your college experience continue in your major if applicable and go to graduate school, or get a dual degree in your new interest.

I hope this was helpful.
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Adam’s Answer

Hi Trevor,


There are a lot of factors that have made college more expensive. Things like inflation, increased cost of administration, fundraising expenses, etc.


However, there are two bigger societal trends that people don't often mention. Both of these affect not only higher education, but the rest of our lives.


1) Income inequality


For a long time, the incomes of highly-educated Americans have increased faster than those with a lower level of education. Universities employ some of the most highly educated people (the blue line below). Meanwhile, incomes for Americans with lower levels of education have not grown nearly as fast (or even decreased, in some cases). In other words, it has become more expensive to run a college (because of the faster growth in highly educated incomes) , while Americans with lower levels of education have not seen their incomes grow to keep up with the cost.


<img src="https://ourworldindata.org/wp-content/uploads/2013/07/ourworldindata_changes-in-real-wage-levels-of-workers-by-education-autor-750x326.jpg" alt="Changes in real wage levels of workers by education - Autor">

https://ourworldindata.org/returns-to-education


2) State budgets


Many states face a variety of financial problems, including increasing budget deficits, healthcare costs, pension obligations, and other liabilities. This problem got worse during the 2008 financial crisis, due to a combination of poor investment returns, decreased tax revenue, etc.


As a result, many states have cut funding to a variety of public programs, including support state universities. While it increases costs to students, other measures (such as tax increases) tend to be politically unpopular.


<img src="http://www.massbudget.org/reports/images/910/3.png">

http://www.massbudget.org/report_window.php?loc=higher_ed.html

(Chart is only for the state of Massachusetts, but shows the trend)


To answer, it's a combination of two main factors: the university-specific trends (increased facilities, fundraising costs, etc.) and broad trends (inflation, income inequality, and state funding) that are more a product of the economy as a whole.

Adam recommends the following next steps:

Study hard, first and foremost.
Don't let this intimidate you and scare you away from college. It's expensive, but it's an investment in your future. But like any investment, take it seriously.
Be smart with student loans. The same way going to college is an investment in your future, student loans are a debt that will be paid by your future earnings. Don't be afraid to do what you want, but be realistic about how much it will cost and how much you can actually make.
Don't forget private universities! Many private schools can be cheaper than public schools, depending on both your merits and your financial need. These schools often have large endowments, or special funds, that can be used to provide generous funding to students.
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Abby’s Answer, CareerVillage.org Team

Hi Trevor! I’m sorry no one’s answered your question yet. We're working hard to get it answered by Professionals with the best insights, but in the meantime I've included a link to a relevant Q&A here on CareerVillage.org that should be super helpful for you to read through.


Tyler asked: Why is college so expensive now compared to when my parents went to college?, and one of the Pros who answered it said:


There are many theories why the cost of higher education has increased so much, most of which the previous responders have mentioned. Here is a short article on the subject: https://www.washingtonpost.com/news/grade-point/wp/2016/01/22/why-the-price-tag-of-a-college-degree-continues-to-rise/?utm_term=.3827365511f7...


Click the question to read more of what this Pro and others had to say!


Good luck! 

Abby 

Community Management Intern at CareerVillage.org
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Elizabeth’s Answer

Dear Trevor:

I look forward to your journey to higher education. Yes, college and university education costs money in the United States because it is not a goverment subsidized education. People have to decide and plan for their advanced education. There are ways to help pay for your education. I am not sure how old you are and when you intend on attending college but in some high schools they offer courses to already give you college credit at free or reduced costs to help get a jump start on credits. Here is a link that you should find helpful in planning and paying for college. It has great resources and options. https://www.daveramsey.com/blog/pay-for-college-without-student-loans
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L. Alex’s Answer

I believe because colleges want to hire the best staff they can afford to remain competitive and instructors/ professors require greater salary for their job, which is fair. Also it’s beneficial for students to have better campuses, rooms, equipment for their educational goals. Without additional financing I believe it wouldn’t be possible for colleges to maintain high standards of education.

I believe that students have opportunity to pay off their student debts within first decade of work if they receive quality education and able to get licensed and get hired.
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Ben’s Answer

There are a lot of theories as to why college tuition has grown to be so expensive, but it's where we are at right now. However, not all colleges and universities charge the same amount of tuition and the financial aid you receive from schools will be different depending on the school (public aid, private aid, grants, scholarships, work-study programs etc.) . Therefore, just like any other investment you make you want to be smart with your money, so that college is affordable to you in the long run and possibly in the short-run as well.

1. First if you are a few years away from graduating, begin to find out about college credit "AP" courses are available at your high school. Taking these classes in high school means that you may not need to take them in college and save you money later. It will also better prepare you for the course work you eventually take in college, allowing you to get more from those future classes.

2. If you are already close to graduating, but really don't have an idea what you want to focus on then consider attending community college or other 2 year state college. This is especially true if for any reason you find yourself in the middle of the pack or lower in your class rank , but now you want to get more serious. It doesn't necessarily have to be your local community college either. You might feel the need to get away from your high school crowd and surroundings, so that you can focus on your studies. If you have family or close friends in another city or state, check out 2 year schools near them. This could still help you save on tuition while giving you a support system away from home. When you are done and you've figured out the major you want to pursue, you can transfer those credits to a school with good degree programs and alumni networks in that field. Remember, you are young, so where you've been is not nearly as important as where you are headed.

3. If you've focused on your studies, got good grades and know what you want to major in then go ahead and apply to a variety of public and private schools. Private schools have different amounts of aid they can provide and because of that can actually end up being cheaper than a state school, but in most cases you won't know what each school can offer until you are accepted.

4. If you know what you want to do then research how much entry level jobs in that field pay and how much does the average person make after say 5 years. This is information you can find with quick internet search in many cases. A lot of people don't do the job they do for the money, but understanding the income you will make after college should play a role in deciding which colleges will give you the most "bang for your buck".

5. Work.. Working while you are in school will not only help you pay for some bills, but can also give you a head-start on getting a job after college. Especially if you can get paid internship in your desired field, the combination of experience and networking is going to be even more valuable to you in the long run. Paid internships are becoming more and more common in STEM and business fields.

6. Lastly, loans are going to be available for college in most cases. They aren't something to shy away from if you can use them wisely, but you don't want the majority of your tuition and other college costs paid by loans. Otherwise, you'll graduate college with a mountain of debt to overcome and that's a difficult way of getting your adult life started.
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