College Student Blog

05 Mar, 2009

The Rising Cost of College – 2009

Posted by: Parker In: College Costs

I’m sure you probably know college isn’t getting any cheaper in the foreseeable future. Compounded with the current economic recession (depression?), families all over the world are having major anxiety when is comes to paying for the upcoming years of college.

College Cost Inflation vs. General US Inflation

Graph of college tuition inflation vs country inflation.

The graph above plots the year to year inflation of college costs (blue) in comparison to general United States year to year inflation. As you can see from the data, college tuition is about double general tuition for any given point.

Without spewing economics jargon at you, this means that the cost of college rises double in comparison to most other goods. If the price of a banana rose about 3% from 2004 to 2005, college tuition would rise about 6%. When you add in the current economic situation, you can see that this statistic is quite alarming, and many students will be prevented from going to their top choice solely to due costs, and that is a truly shame.

The Average Family’s Response

You’re probably wondering how this is affecting the whole college scene, including applications, admissions, and the short-run future of costs.

Applications

The most immediate affect that has already been observed and reported on by the NY Times is the surge of applicants to public schools (most notably state universities). State schools are by in large much less expensive than private colleges, and families are bargain shopping. It seems like the blissful “I won’t worry about college costs until after I graduate” bubble is finally starting to pop. I’ve been predicting this for quite a while, and it is finally coming  around. And while this is unfortunate, its been long over due and I hope it makes schools cut costs and become more reasonable (although that’s not likely for a while).

Another major affect of this economic bubble bursting is the surge of students planning to attend community colleges. MSNBC is reporting that community colleges are seeing a 12-13% applicant increase from year to year. This is because everyone is being told that they need to go to college; however, many families are strapped for cash. Note that community college saves 100% of the room and board costs, and is also a much lower tuition cost.

Admissions

With the increased demand to public and state schools, it is only natural that admissions are going to get more competitive. Schools are going to have a larger pool of applicants to select from, and can therefore be more choosy in who they accept. On the other hand, private schools may have to loosen up their criteria a bit in order to attract a larger crowd.

Note: Ivy league schools really aren’t going to be loosening their constraints any. Sorry to any longer-shot hopefuls!

Predicted Costs

Unfortunately, costs aren’t going to be heading south for the foreseeable future. Unless we see some sort of horrific economic collapse, prices are only to continue to rise.

The only upside I can foresee is that colleges may begin to decease their year to year increase. (For example, instead of raising costs $500 / year, they cut back to $300). In relating this back to the graph at the beginning of the post, I am hoping that the college tuition inflation line (blue) moves down closer to (if not equal or under!) the general United States inflation line (pink).

What Can You Do?

If you really want to take drastic action, send a letter to your congressman or to the universities you are applying to. Sitting and handing over money isn’t going to change anything. Your other option is to just ride it out. As mentioned previously, you can attend a community college for two years, but I must warn you, more and more 4 year institutions are not accepting community 2 year college credit. You can read more on that in the beginning your college search post of mine.

Additionally, you can get a part time job, work every extended school break, and even make a few bucks online (beware on this last one – there are scams everywhere). If you want some more information on making some real money online, please contact me and I would be glad to lend a hand.

Remember: Blissfully taking out loans and graduating $100,000+ in debt isn’t the answer! Make sure to take action early, the money goes fast when you’re in school.


As always, please drop me a comment below! I know you have valuable insight to contribute. I would also be very interested in hearing about how this economic situation has affected you and your college search / selection.


College tuition inflation vs. general USA inflation graph credit: http://www.finaid.org/savings/tuition-inflation.phtml

4 Responses to "The Rising Cost of College – 2009"

1 | Bill

March 15th, 2009 at 2:11 pm

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This is a great illustration of why we need to pay attention to education in this country. It is becoming just another “big business,” and has become bloated and self serving.

2 | Three Eggs for $100 Billion: Are College Costs Next? | Money Launch My Kid

March 15th, 2009 at 2:12 pm

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[…] when we lift ourselves from the Great Recession; and kids should have some understanding of inflation’s  impact.  College expense, along with everything else,  is sure to rise, as is the cost for room and […]

3 | tom

January 4th, 2011 at 5:06 pm

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Can I keep my pellgrant money for my self and not attend school.

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