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The runaway cost of college education.

Old 08-21-08, 03:03 AM
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The runaway cost of college education.

http://money.cnn.com/2008/08/20/pf/c...ymag/index.htm



Is college still worth the price?

"For more than two decades, colleges and universities across the country have been jacking up tuition at a faster rate than costs have risen on any other major product or service - four times faster than the overall inflation rate and faster even than increases in the price of gasoline or health care (see the chart to the right). The result: After adjusting for financial aid, the amount families pay for college has skyrocketed 439% since 1982. "



"Mind you, some borrowing can actually be a good thing, giving students a built-in investment in their education. But today many kids leave school with unprecedented amounts of debt - $20,000 on average, up from $9,000 a decade ago - and one in 10 private college students borrows over $40,000.

Moreover, that figure doesn't include parent loans, home-equity loans and credit-card debt. "It remains to be seen whether this kind of borrowing is economically sound or just a form of faith-based financing," says Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers.

One chilling sign: Among students who graduate from four-year schools with more than $15,000 in debt, the default rate is nearly 20%.

As a rule of thumb, financial advisers recommend that student-loan payments not exceed 10% of a young adult's starting salary. At New York University, for example, about 60% of last year's graduates had loans, which averaged a hefty $34,000.

If they took out the maximum in federal loans and made up the difference with private loans, the typical borrower would owe about $460 a month, which is considered affordable if you earn at least $55,000.

That may be no problem for chemical engineers, with an average starting salary of $63,000, according to the National Association of Colleges and Employers. But the typical liberal arts major earns just $33,000, which would make those payments a real challenge."

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3 page article. Captions above were cut and pasted.

I've been reading a lot of debating here about gas prices, food prices, cost of war, social security, healthcare. I don't think higher education should get a free pass. Education has always been known as the great socio-economic equalizer. But IMO, this could very well be the biggest threat to our future prosperity if costs continue their current pace.

Thoughts? Better yet. Is there anything we can do? The scary thing is.....education has traditionally had bipartisan backing in DC, yet things aren't exactly looking any better.
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Old 08-21-08, 06:30 AM
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I can't wait for my kids (and I don't even have any yet!) to go to college. The thought of tuition being a million dollars for a 4 year education is very exciting!
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Old 08-21-08, 07:03 AM
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I've said it before in this forum. I really don't get why college tuition has risen so sharply in the last 2 decades. However, I'm sure the ease of obtaining student loans has likely contributed to it.
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Old 08-21-08, 07:30 AM
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most of the NYU graduates don't have a problem paying their loans off
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Old 08-21-08, 07:34 AM
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Originally Posted by Red Dog View Post
I've said it before in this forum. I really don't get why college tuition has risen so sharply in the last 2 decades. However, I'm sure the ease of obtaining student loans has likely contributed to it.
schools with teaching hospitals have seen the costs of running the medical school skyrocket

colleges have also hired a lot of administrative people for things like counseling students. few years back NYU had a rash of student suicides. They started a new program to counsel students. NYU also lets the kids of their employees go to school there for free. someone has to pay for this
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Old 08-21-08, 07:55 AM
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Originally Posted by Red Dog View Post
I've said it before in this forum. I really don't get why college tuition has risen so sharply in the last 2 decades. However, I'm sure the ease of obtaining student loans has likely contributed to it.
1. Colleges have been hammered for tuition hikes for years. It's just that last 1 or 2 years that they've flown under the radar because of other issues.

2. The reason for tuition hikes has to do with cuts in government spending on higher education. State governments are slashing funding for Universities, meaning that most schools have to raise prices.

That lack of funding is then combined with the extreme (and unnecessary) rise in college enrollment in the last 20 years. Suddenly, a college degree, any degree, has become a necessary barometer for persistence and ability to learn in many jobs.

Both of these are then compounded by the idea that a college education is a right and a public service. As a result, less profitable colleges spring up to fulfill the role that community colleges used to address, and those colleges are forced to keep prices very low (I can take a course from my local community college for $30), requiring them to suck funds from other universities' tuition sharing program.

This is why public schools have a disproportionately higher tuition increase compared to private schools.
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Old 08-21-08, 07:57 AM
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Originally Posted by al_bundy View Post
NYU also lets the kids of their employees go to school there for free. someone has to pay for this
Many schools do this. In addition, schools often "trade" free tuition (e.g. if an NYU employee's kid wants to go to Brown for free, and a Brown employee's kid wants to go to NYU for free, they trade - sometimes they even just do an I.O.U.).

It's part of the employee's benefits package, and usually restricted to certain level of employee. It makes sense when you consider how underpaid college professors are.
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Old 08-21-08, 08:45 AM
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We'll always need ditch diggers.
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Old 08-21-08, 08:48 AM
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Originally Posted by matta View Post
1. Colleges have been hammered for tuition hikes for years. It's just that last 1 or 2 years that they've flown under the radar because of other issues.

2. The reason for tuition hikes has to do with cuts in government spending on higher education. State governments are slashing funding for Universities, meaning that most schools have to raise prices.

That lack of funding is then combined with the extreme (and unnecessary) rise in college enrollment in the last 20 years. Suddenly, a college degree, any degree, has become a necessary barometer for persistence and ability to learn in many jobs.

Both of these are then compounded by the idea that a college education is a right and a public service. As a result, less profitable colleges spring up to fulfill the role that community colleges used to address, and those colleges are forced to keep prices very low (I can take a course from my local community college for $30), requiring them to suck funds from other universities' tuition sharing program.

This is why public schools have a disproportionately higher tuition increase compared to private schools.
So we either let the people using the system pay for it in tuition or everyone pays for it in tax increases. 6 one way; half dozen the other.

No such thing as "free"
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Old 08-21-08, 08:49 AM
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Originally Posted by matta View Post
Many schools do this. In addition, schools often "trade" free tuition (e.g. if an NYU employee's kid wants to go to Brown for free, and a Brown employee's kid wants to go to NYU for free, they trade - sometimes they even just do an I.O.U.).

It's part of the employee's benefits package, and usually restricted to certain level of employee. It makes sense when you consider how underpaid college professors are.
That's how I got my graduate degree. It is a very attractive benefit and covers not only your children (remember, they have to be admitted) but also your spouse. They use it to make up for the paltry salaries similar to the way government jobs offer good benefits and low pay. The last year in grad school, the law was changed and I had to include the free tuition as earned income on my taxes.
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Old 08-21-08, 09:16 AM
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Originally Posted by matta View Post
It's part of the employee's benefits package, and usually restricted to certain level of employee. It makes sense when you consider how underpaid college professors are.
Are college professors really paid that poorly? I went to a Midwestern state school and the average salary in my college was around $65K-$75K. It was the business college, so it may be better pay than an English professor.
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Old 08-21-08, 09:18 AM
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Originally Posted by mosquitobite View Post
So we either let the people using the system pay for it in tuition or everyone pays for it in tax increases.
Or we do the smart thing as society and decide that 50-60% of all jobs in the US do not require a 4-year degree.

The problem is that many people go to college unnecessarily just to go to college. There's some myth that you can't be successful unless you have a 4-year degree. That mentality has created a system where the people folding clothes at GAP and answering phones at call centers have B.A. degrees in Art History (because the 4-year degree is seen as a barometer of work ethic and trainability).

The schools that exist primarily to manage the student load from these unnecessary students make no money. So who pays for them? Tax payers or students. And not just the students at those schools, but the students at all the schools in that school system (you can't have a Middle Georgia State with tuition much higher than the University of Georgia). That's one of the main reasons we have university systems.

Compare that to a research university that pays salaries from research grants, start up companies, and consulting work. In fact, right now over 50% of all tuition collected at research universities are sent directly to teaching schools. At my undergraduate school, for instance, $10,000 of the $16,000 I used to pay was used to subsidize the education of people half way across the state, who probably got degrees in business to work in a jewelry store (no knock against jewelry stores - but what's a course in the History of Film Noir going to teach you that a GIA certification won't?)

So why isn't every school a research university? Every school that can be is. There's just a limited about of knowledge capital.

If you want to reduce or control tuition, the answer is less teaching universities, which is accomplished by less students, which is accomplished by eliminating unnecessary students from the system, which is accomplished by appreciating the value and merits of certifications and 2-year programs.

Last edited by matta; 08-21-08 at 09:26 AM.
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Old 08-21-08, 09:24 AM
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Originally Posted by orangecrush18 View Post
Are college professors really paid that poorly? I went to a Midwestern state school and the average salary in my college was around $65K-$75K. It was the business college, so it may be better pay than an English professor.
But an MBA starts in the $120,000 range. So why is someone with much more education and much more ability getting paid so much less? Because it's a government job.

In my field, you have two options: teach at a university and make $80,000 - $100,000 or go into consulting and make $180,000 - $200,000. Why would anyone take the university position? No one would ever go to a university unless the university sweetens the pot: tenure, sponsorship for foreign employees, pension, free education for family members, reduced workload so you can have a side consulting company, free press for your research, freedom to research whatever you want, etc.
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Old 08-21-08, 09:49 AM
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Originally Posted by orangecrush18 View Post
Are college professors really paid that poorly? I went to a Midwestern state school and the average salary in my college was around $65K-$75K. It was the business college, so it may be better pay than an English professor.
The university I worked for (which costs well over $40K per year) had professors making anywhere from $35K up to $200K. Depends on tenure and any extra endowments. But remember, the professors are a minority of the total number of employees.
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Old 08-21-08, 09:58 AM
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Originally Posted by CRM114 View Post
We'll always need ditch diggers.
Yes, this is true. But blue-collar workers are definitely looked down upon by people in American society.

This "those who CAN, go to college and get a 'real' job, those who CAN'T, dig ditches" attitude has really screwed things up.

There is nothing dishonorable about being a bus driver, plumber, or machine operator.
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Old 08-21-08, 10:07 AM
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when i started college in 98, it was $13.7k, including room and board. this year, it's $26.5k. Glad i graduated when i did.
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Old 08-21-08, 10:08 AM
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when i started college in 98, it was $13.7k, including room and board. this year, it's $26.5k. Glad i graduated when i did.
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Old 08-21-08, 10:34 AM
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Originally Posted by CRM114 View Post
We'll always need ditch diggers.
Yes, this is true. But blue-collar workers are definitely looked down upon by people in American society.

This "those who CAN, go to college and get a 'real' job, those who CAN'T, dig ditches" attitude has really screwed things up.

There is nothing dishonorable about being a bus driver, plumber, or machine operator.
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Old 08-21-08, 10:50 AM
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Originally Posted by sracer View Post
Yes, this is true. But blue-collar workers are definitely looked down upon by people in American society.

This "those who CAN, go to college and get a 'real' job, those who CAN'T, dig ditches" attitude has really screwed things up.

There is nothing dishonorable about being a bus driver, plumber, or machine operator.
Our economy has changed from manufacturing to service. (I'm not sure why you think there is a shortage of plumbers and bus drivers.) It used to be that you could graduate high school and get a good lifetime job with a pension at a manufacturing plant. Not so anymore. These people need jobs somewhere - some go to college and some struggle to find work. That's the end result of the last 50 years of corporate growth.
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Old 08-21-08, 10:52 AM
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Originally Posted by matta View Post
If you want to reduce or control tuition, the answer is less teaching universities, which is accomplished by less students, which is accomplished by eliminating unnecessary students from the system, which is accomplished by appreciating the value and merits of certifications and 2-year programs.

Couldn't less students also be accomplished by raising the bar of who is admitted? I realize that this is not necessarily politically correct these days, but wouldn't it have the same effect? (moving people to 2yr programs or vocational schools?)
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Old 08-21-08, 11:22 AM
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Originally Posted by matta View Post
But an MBA starts in the $120,000 range. So why is someone with much more education and much more ability getting paid so much less? Because it's a government job.

In my field, you have two options: teach at a university and make $80,000 - $100,000 or go into consulting and make $180,000 - $200,000. Why would anyone take the university position? No one would ever go to a university unless the university sweetens the pot: tenure, sponsorship for foreign employees, pension, free education for family members, reduced workload so you can have a side consulting company, free press for your research, freedom to research whatever you want, etc.
there is a professor at NYU Medical School that makes around $2 million a year
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Old 08-21-08, 11:25 AM
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Originally Posted by sracer View Post
Yes, this is true. But blue-collar workers are definitely looked down upon by people in American society.

This "those who CAN, go to college and get a 'real' job, those who CAN'T, dig ditches" attitude has really screwed things up.

There is nothing dishonorable about being a bus driver, plumber, or machine operator.

i work with someone who's husband is a truck driver. few years ago before gas got really expensive i heard he was making well over $100,000.

when i was doing my kitchen remodel i got a quote from a guy who said his kitchen remodel job cost $68,000 and he did a lot of the work himself. these guys charge depending on where they work. if you brand yourself properly than you can get nice jobs from millionaires and charge accordingly. like $2000 to disconnect an oven from the gas line
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Old 08-21-08, 11:34 AM
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It's amazing how much things have changed. When I was at Auburn tuition for a quarter was around $400. That's insane compared to today. It's also much harder to get into school there with a huge increase in applications. I'm not even sure I could have gotten in if things were like they are today.
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Old 08-21-08, 11:59 AM
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i wouldn't be surprised if low interest rates have a lot to do with it as well

a lot of university money is invested in treasuries. interest rates are close to multi-decade lows and have been falling for decades.
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Old 08-21-08, 12:03 PM
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Well, I can tell you where the extra money is not going, and that's to the salaries of professors in the Arts & Humanities.
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