Is College Still Worth the Cost?
By Martin Brown
With the financial upheaval of recent weeks, and the prospect of a deep recession now upon us, the troubling questions about the spiraling cost of a college education and the practical value that education will return in the form of actual earning power, has never been more relevant.
This is a particularly painful choice for single women attempting to stay the course first blazed by their mothers, and in some cases grandmothers, to earn a higher degree in an academic world that was once the sole domain of their male counter parts.
“Since I was in the earliest grades of primary school, my mother talked to me about preparing for a college education,” Carol Hunley, an eighteen-year-old high school senior from a suburb of Chicago explains. “My mother was the first woman in her family to attend college, and when she got her degree from Northwestern University, my grandmother told me that it was the proudest day of her life.”
Carol knows how much attending college has meant to these important women in her life, but now she is troubled by the rapidly escalating cost of tuitions and equally troubled by the lack of viable jobs for students entering the work force after completing their college years.
A look at the numbers adds weight to Carol’s concerns: Since 1985, the nation’s consumer price index has risen 108%, in other words, slightly more than doubled in twenty-three years. Healthcare costs have increased over 250% during that same period.
But the clear champion in the race for runaway cost increases is the price of a college tuition, which is up a breathtaking 440%, a four and a half fold increase, and more than four times the rate of inflation.
Just how scary are these numbers in actual dollars and cents? Real scary. For example, the nation’s top institutions are now averaging $200,000 to confer a four-year degree. And flagship public institutions such as University of Michigan, are charging in-state students $20,000 per year, and out-of-state students, $42,000 per year.
One reason for these runaway costs is that private and public institutions have learned that they can get away with it. Marketing experts call it the “Mercedes” effect. Boomer parents, always eager to prove that there are no limits to the support that they will give their children, are willing to go deeply into debt to show that when it comes to their children, the more a college costs, the better education their children will receive. Of course the losers in this equation are the Carol Hunleys of the world and the tens of thousands of young students like her who are simply hoping to secure the blessings of a higher education.
In actuality there is very little statistical evidence to support the idea that a degree from Vassar, or Northwestern, for that matter will enhance the earnings potential of its graduates. Statistics do make a strong case that a four-year degree will significantly increase an individual’s earning potential regardless of the institution that conferred their degree. In other words, Cornell and a “Fill in the blank” State University in most cases have no demonstrable difference in earning power but about a $170,000 difference in the cost of a baccalaureate.
This of course is a generalization and does not mean that a given student might not accrue certain benefits from a top-priced institution. But bragging rights and earning power are two different things. For earning power the choice is clear, the no-name institution will do the same thing as the Honda Civic, it will get you where you want to go, minus the cost of a luxury label.
For Carol Hunley, she may not have the opportunity to go to a high profile school such as Northwestern, but the degree that she earns from a state public school will bring her all the lifetime earning potential that will make her the equal of the young people who earned a brand name degree and years of debt thanks to their ivy-gilded choice.
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