Archive for the ‘education’ Category

This just in: College is costly

26 June 2013

 

Don’t worry, it’s still worth it, in a big way, at least on average. But that’s another story. This chart here has some interesting stories to tell:

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(1) The big difference between average published tuition (“sticker price”) and net tuition at public four-year colleges is a big surprise to me. I teach at a four-year public college, and I don’t think we offer big tuition scholarships to all that many people. I know that some of the flagship state universities do, and those schools also have a lot more people paying high out-of-state tuition, which surely explains some of the gap. But a difference of more than a half? I would not have guessed.

— Side note: My students would no doubt point out that this chart includes only tuition and not room/board/etc., which cost a lot more than tuition at ours and many state colleges.

(2) The average net tuition paid at four-year public colleges has doubled in real (inflation-adjusted) terms in just ten years! That’s a big jump. Parents and younger siblings cannot be pleased about this.

(3) The average net tuition at private colleges is well under half the sticker price, but it’s still steep: $52,000 for four years, more if you figure that tuition inflation will continue.

(4) State schools have lost about half their relative (tuition) cost advantage to private colleges, and state school tuition is about one-fifth of private college tuition. I’m not sure which of those statistics is more significant. Overall, assuming the quality difference between public and private schools has not changed, the first point means state schools are only half as good a deal (ignoring non-tuition fee) as they used to be. But how many private colleges are five times better than public colleges (taking into account consumption value, impact on future earnings, impact on future quality of life)? Okay, throw in room, board, etc. and they are about $10.000 at both private and public, and now it’s a $12,500 net cost at public school vs. $23.000 at private school, so now the private school costs “only” 84% more. Still a big difference.

It seems the burden of proof is on private colleges to justify their huge extra cost. Depending on the college and the applicant, some are probably worth it and some aren’t. (I remember a bright student awhile back who said his father told him, “I’m not going to pay through the nose for four years just so you can screw around.”) Prospective applicants to pricey private colleges have some justifying of their own to do (hint, hint).