Why the Cost of College Is so High

Dear College Made Simple reader,

The costs of higher education are outpacing just about everything else.

But what’s the reasoning behind it?

Here are three points to consider when looking at the tuition price tag…

– Scott

Why the cost of college is so high

A loaf of bread, a gallon of gas, a movie ticket… and a college education.

What do they all have in common? None of them cost what they used to.

And in an age where astronomical price hikes are now a common occurrence , the cost of college has to sit squarely at the top of the list.

Inflation? Try mega-inflation.

In the past 40 years, the median household income has grown by a factor of 6.5. In that same time period, the cost of attending a state college has flown up by a factor of 15, and for an out-of-state school – a factor of 24!

Educational costs are far outpacing rises in home costs, food prices and sadly – hourly wages.

But why? How is it that the cost of education is becoming so wildly expensive?

You can point to three main reasons why…

The value of a college education is higher than ever

Recent studies have shown that workers with college degrees make on average 44% more than workers with only high school diplomas.

And according to U.S. News and World Report, the best estimate for what a student’s college education is actually worth over an entire career is around $300,000.

So even as the cost of tuition at schools increases, it’s still more than likely that whatever you end up paying for college, your student will end up making it back and then some.

This fact hasn’t been lost on students. Today 7 out of 10 high school students enroll in college with the hopes of getting better jobs and earning more money.

Of course this leads to a natural supply and demand situation. A college education is HIGHLY in demand. Not just from employers, but from the students themselves that want it.

Colleges are of course well aware of what their services are worth and therefore as college graduates continue to be hired for better jobs with bigger salaries, it’s their natural inclination to charge more.

After all, you can’t argue with the numbers. As long as the “value” of a college education is worth more than what a college charges you for it and because there’s only a certain number of students schools can accommodate each year, they’ll keep on raising their prices as long as the demand for those spots exists.

A college faculty is one of the most expensive workforces to hire

Everyone laments the sorry state of public education in this country and how little teachers seem to get paid.

However once you move beyond high school, the state of education changes greatly. More students than ever are going to college. The value of their education is higher than ever. And subsequently, the cost of putting together a qualified faculty to dole out that education to all these students is growing higher and higher.

Remember what I just pointed out above. The cost of hiring an educated workforce is rising every year. And the workforce a college or university is hiring is among the most highly educated you can find.

The majority of instructors will have Masters degrees and doctorates. And those accolades earn a healthy paycheck.

Learn more about your financial aid situation

According to www.salary.com, the median salary for a typical liberal arts professor is $80,000. Those with tenure and who publish work can expect to earn much more. In fact, in 2009, CNN ranked college professor as the 3rd best job in America.

Depending on the size of a school, a college faculty can number in the hundreds. And with an average salary of $80,000 or more, that can add up to a hefty payroll very quickly.

That’s not to mention the hundreds of other jobs a college has to pay for. Coaches, librarians, admissions counselors, dining staff, maintenance crews, etc…

Managing a college’s workforce is no less of an undertaking than managing one of a major company. And no less expensive either. Hence why your costs continue to rise…

Colleges are spending lavishly to try to attract your student

Take a minute and think about all those glossy, beautiful looking promotional materials schools have been mailing you over the past few months.

What’s on the cover? A new stadium? Perhaps a modern looking student center? Or a newly built academic building with all the bells and whistles you could imagine? Well there’s good reason for that.

Schools are spending more and more money on campus amenities in an effort to attract students. Things like fitness centers, modern on-campus apartments, athletic facilities, computer labs, new cafeterias and other dining options… these are the new pieces of eye candy colleges are putting front and center in their marketing plans.

And of course, all of these fancy new attractions cost money. And lots of it.

The New College of Florida just opened an $11 million dollar arts and sciences building this summer. The University of Miami is beginning work on a new student center with a price tag of over $20 million. And Towson University’s new liberal arts building comes in with a whopping $148 million bill.

So where’s that money coming from? Sure there’s private fundraising and donations… but much of that tab is paid for by you – the tuition holders.

Every student wants to attend a school with the best facilities, academic, athletic, living or otherwise… but keep in mind those pretty looking buildings aren’t paying for themselves. Not to mention things like organic fruit in the cafeteria, free Wifi all over campus or a new treadmills in the gym.

These perks get passed onto you in your bill. The more updating a college does, the more it’ll cost you to attend.

Remember, to weigh the cost of what a school offers next to what your student really needs to have. A great education should be at the top of the list. Everything else is a nice bonus… but one you’ll have to be willing to pay for.

To your family’s successful college planning,

Scott Weingold

Co-founder, College Planning Network LLC
Publisher, College Made Simple –
The Free Educational Resource of College Planning Network, LLC

 

Related Articles:

What’s the Value of a College Education Today?

The Actual Cost of College

5 Ways to Pay for College in Tough Times

Is a College Education Still Worth the Money?

Return to College Made Simple's Free Reports

Find us on Facebook! Find us on Facebook!


Increase Your SAT Scores Learn How to Increase the SAT Score... By 203 Point or More
Just tell us where to send the full report...
E-mail:
We'll also send you - at no charge - the College Funding Made Simple e-Course, delivered to your email inbox in 12 parts, by topic. With each part, you'll come away with valuable, actionable insights proven to help parents and students in the college admissions and funding process.

NO-SPAM PLEDGE: We believe that your personal information should stay that way. Rest assured, your email address is 100% confidential, and under no circumstance will we ever rent, sell or give away your email address outside of our own network without you specifically requesting us to do so.

2 Comments

YolandaJune 25th, 2013 at 12:07 pm

Who pays for the scholarships that universities award students? In many cases full four year awards. Is that cost passed on to the paying students?

Jodi PolsterJune 27th, 2013 at 5:40 am

Hello Yolanda,
The costs of scholarships are not passed on to the paying students. Most scholarship money is awarded through a college’s endowment fund.

Leave a comment
Your comment


Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by CollegeStats.org.  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News, TheStreet.com, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.