It’s more expensive now than ever before to send your son or daughter to college. So in order to stay attractive, some universities are beginning to offer tuition discounts. But providing more financial aid to incoming students doesn’t hide the fact that college costs are still very high.
Out-of-state full-time students who attended public four-year colleges felt it in their wallets. On average they paid almost $22,000 in tuition and fees this school year. In-state undergrads did a little better. They shelled out just over $8,600.
According to the College Board, in-state students faced an average tuition increase of $400 from last year. On top of that, room and board charges jumped by $325.
But, a recent National Association of College and University Business Officers survey found that last fall many colleges offered an average of 45% off tuition for incoming freshman. That’s more than ever before, and they did it through grants and scholarships. The study shows that some institutions understand that the cost of higher education needs to be addressed.
Which brings us to today’s Just Explain It. Why does a college education cost so much?
For decades, college tuition and fees have been outpacing family income and rising faster than inflation. Here are several reasons why.
Universities spend a lot of money to attract potential students. So a campus that has state-of-the-art academic, recreational and living facilities is more appealing. But staying up-to-date with the latest technology isn’t cheap.
Drexel University recently modernized its campus, but at a steep cost. The transformation reportedly put the university $467 million in debt - and students were left holding some of the bill. The net price of attendance is now among the highest in the nation.
Demand for a degree is also causing the price of higher education to skyrocket. According to the National Center for Education Statistics, enrollment increased 11% between 1990 and 2000. Between 2000 and 2010, enrollment rose 37%.
Meanwhile, hefty contracts to administrators and faculty members are also passed on to students. The Chronicle of Higher Education reported that from 1997 to 2007 academic presidential pay increased by 35%. In 2009 the highest paid university presidents made almost five million bucks.
And that’s not all. Bloomberg found that when some university executives stepped down, their exit payments were as much as one to three times their annual salary and bonus.
Scholarships offered by some colleges can also jack up the price. For example, merit-based awards are sometimes funded by tuition increases. That means when a student pays his or her tuition, they could be subsidizing the scholarships.
In the end, as a recent student finds, equally smart students will succeed later on in life whether they attended a top-tier college or not. And even as prices continue to soar, students can still find a quality education without breaking the bank.
What do you think? Did you learn something? Do you have a topic you’d like explained? Give us your feedback in the comments below or on Twitter using #JustExplainIt.