4 Reasons Why A College Diploma Costs More Than Ever Before
Like any elite membership, a college degree opens doors you would never even realize existed without it, and like any membership, college comes with an annual fee in exchange for this privilege.
This should come as no surprise. Higher education has always been an investment in the future, but now “higher” describes its cost as much as its learning level. If you’ve ever wondered why today’s students are paying more than any generation before them, the answer could be found in the following four reasons:
Enrollment is up
While running from one end of campus to the other when you have back-to-back classes, it’s normal to have to dodge a few of your fellow students. But now you’re having to weave your way in and out of crowds all day long, no matter how late you are. Campuses all over the country are busier than ever before because enrollment has never been higher.
Between 1965 and 2016, total enrollment increased by 240 percent. For the most part, this rise in enrollment has been evenly spaced out over a steady climb; however, the Trends in College Pricing report shows a drastic surge at the turn of the century, at which point enrollment increased by 30 percent between 2000 and 2015. The fresh side of the new century has more young people searching for degrees.
Colleges and universities are struggling to accommodate a larger student body. As a result, they’re pouring a record amount of money into erecting new buildings to keep up with enrollment. In 2016, post-secondary schools spent $11.5 billion on construction. As The Atlantic points out, these construction costs trickle down to students. For students attending Western Michigan University, an additional $45 gets tacked onto their tuition.
Campus renewal programs aren’t the only new costs faced by colleges and universities. They’re also spending a new record on non-academic administrative employees. The New England Center for Investigative Reporting shows post-secondary institutions added 517,636 administrative employees between 1987 and 2012. Between 1993 and 2009, these employees grew at 10 times the rate of tenured faculty.
George Pernsteiner, president of the State Higher Education Executive Officers Association, says these professional employees help students graduate faster, yet the stats are a little murky. While these admins have increased ten-fold, the U.S. Department of Education shows only a three percent improvement in the number of students graduating within six years.
Funding is down
Public funding for colleges and universities is at an all-time low. The College Board reports state and local appropriations measured $76.1 billion in 2015 — an impressive figure until you realize this number grew less than one percent over 10 years. Meanwhile, the cost of tuition has increased by 3.2 percent per year past inflation over the last decade.
Funding cuts started as far back as the ‘70s, but they were at their deepest around the Great Recession. Many post-secondary institutions are still recovering from this low point in time. To deliver the same services to their student body, these schools are using higher tuition and fees to replace lost funding.
Wages have stagnated
Mounting costs would be tolerable if wages rose accordingly. Unfortunately for the Class of 2019 and beyond, tuition and fees have climbed at a rate that’s not only faster than the rate of the federal minimum wages but also faster than the rate of inflation.
Buzzfeed did the math. In 1975, the minimum wage was $2.10 or the equivalent of $9.25 in today’s Greenback. A student enrolled during the ‘70s would only have to work 17 hours a week to pay off tuition for the year. In 2018, the federal minimum wage is just $7.25, already lower than what the Class of ’75 earned. At this wage, today’s students would have to work over three times more the average 1975 alumnae. They would have to work 54 hours a week to pay off tuition or the equivalent of eight hours a day every day for all but two weeks out of the year.
Working during school has always been a normal part of college life, but it’s the number of hours students work that’s changing. Nearly a quarter of all full-time students manage to juggle a full-time job throughout the academic year.
Even with a job, most students must rely on student loans to graduate. Some may even have to take out private personal loans once they leave campus with a diploma in hand. After all, making federal loan repayments on top of living expenses can be hard when you’re just starting a career.
Though smaller than the typical public loan, a cash advancehave a time and place — like when a car repair is a lot higher than originally expected. One of the benefits of online loans is their convenience. Online lenders like MoneyKey shift the focus away from credit ratings — something few students haven’t developed during their short time of financial independence. Online cash loans are also considered unsecured loans, meaning borrowers don’t need to put up collateral or have a parent co-sign.
Like work, borrowing is just a fact of life for most students, even when they enroll at cheaper colleges and exhaust financial aid from their school. Nearly 44 million Americans shoulder a student loan debt of $1.53 trillion, averaging out to about $35,000 per graduate.
When faced with these kinds of figures, you might wonder if finishing your degree is worth it. If you’re feeling discouraged, let the Bureau of Labor prove campus life isn’t just a way an expensive way to learn how to do a keg stand. The degree you earn will help you enter the job market. The median income of college graduate is roughly 67 percent more than those who have no degree. Though it costs you more, your diploma will let you earn more.
Deliberating won’t change the facts: a degree comes at a higher cost than ever before. Only you can figure out if the investment now is worth the pay-off later.
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