Why College Tuition Keeps Rising. (video)
Posted: September 9th, 2010 | Author: Joe | Filed under: Employment, spending | Tags: college tuition, Education, Employment | 1 Comment »It’s a well worn refrain by now that the cost of a college education has risen far more than the general rate of inflation for decades, but no one really talks about why.
In fact, the majority of discussion about the cost of college tuition usually focuses on increased funding, or changing student loan programs, usually under the guise of “making college more affordable” while really only driving the cost up more.
The root reason college tuition outpaces inflation year after year is because people keep paying it.
It’s largely driven by supply and demand, but it’s real cost is masked by grants, scholarships and loan programs – it’s the same reason health care costs keep rising so much faster than inflation. When the consumer is shielded from paying the direct cost, then costs rise much more quickly. It almost becomes a victimless crime.
Couple that with the fact that so many people see a college degree as essential to having a high paying job, and you see why the demand keeps increase despite the meteoric rise in costs. It’s easy to see why a college degree is viewed as essential when you look at data like this. As of August, 2010, the unemployment rate of those with a Bachelor’s degree was 4.6%, while those with less than a high school diploma had a 14% rate of unemployment!
I just put my daughter on the bus for kindergarten for the first time this week, and I can’t imagine what the cost of college is going to be when she graduates high school. Couple that with the fact that so many people will likely be entering the workforce with bachelor’s degrees by that time that she’ll likely have to get a master’s degree just to remain comparable to what her old man got with his bachelor’s and it’s not a happy thought.
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