The Cost Of College Education

The Cost Of College Education

Educational attainment for every individual is one of the basic and most imperative determinants of exploiting life opportunities in terms of employment, income, and meeting the basic demands of life. All citizens in the United States share a common expectation that all citizens should have access to quality education in order to considerably reduce lifetime inequalities in future. However, there are inequalities brought about by the quality of education and achievements that persists across income levels, race, and demographic regions. If one were to consider the benefits of college education versus the benefits one can accrue from it, the question would initially appear relatively simple, but when all the dynamics involved in higher education are comprehensively considered, the question becomes even more complex. Statistics by the College Board states that the average cost of tuition and fees in in-state public colleges has risen by 35 percent (USA Today, 1). In just the 2006 and 2007, tuition and boarding at a public university cost an average of $12,796 while at a private institution it cost an average of $30,367 (USA Today, 1). On average the cost of college education has in the past twenty five years risen faster than consumer prices, personal income, and even health insurance.

The reduction of scholarships in the face of rising costs of attaining a college education has left many students taking more loans. “In the first semester of the 2009-2010 academic years, college students took out $35 billion in federal Stafford student loans (Kim, Learning 19). It has also become increasingly difficult to establish whether the rising cost of education reflects any improvement on education provided by these colleges and universities. It is not uncommon to discover that money spent on tuition is channeled into other college projects rather than improving the quality of education. For example, construction of lavish college facilities, palatial campuses, and fancy athletic centers are increasingly being constructed for the sole purpose of measuring up to the standards of other universities rather than on improving the quality o education offered (Brian 3). Taken against this background, one might, therefore, ask whether college education is surely worth all this trouble and expenses. The answer is a resounding yes when all the lifetime benefits of college education are taken into consideration.

Before making a case for college education being worth even more than the costs involved, it would be imperative to first consider the actual costs per student against the expected benefits of college education in monetary terms. Calculating the individual costs of college education per student can be a tricky affair given that in the last twenty five years, Federal direct aid for education has significantly reduced making even more students opt for college loans. This means that there are more students leaving college, in fact more than a half since 1993, heavily indebted in tuition and boarding loans. The average college debts have also risen from $9,250 in the year 1993 up to 19,200 in the present time. This is a 58 percent increment after inflation adjustments (USA Today, 1). The current value of this expenditure over four years seems exorbitant in the present conditions of economic hardships.

It is also noteworthy to remember that full time employment while one is pursuing college education is never an option in all cases. Economists refer to the wages and salaries a student gives up while attending college as the opportunity costs of attaining a degree. Basically the average annual salary of a high school diploma holder is $28,718 and $20713 for a man or woman respectively in most states outside of major urban states like New York. This is the amount of money one will have to give up besides paying for college tuition, books, and boarding fees. In effect one has to be prepared to lose over $75,000 over a four year period and still pay to earn a degree. However when these figures are compared to the social and economical benefits of college education over one’s lifetime, it can accurately be argued that higher education outweighs the costs over and over again as I shall shortly demonstrate.

When considered at first glance the benefits of college education might appear small. However, if they are narrowly examined as the expected benefits accrued over a lifetime for a person with a college degree versus those of a high school graduate, one would readily agree that the sacrifice involved in paying for a college degree is worth the trouble. The increase in wages for a person who attends college in each year has continued to rise from 7.6 percent in the 1980s to 12.9 percent in the late 2000s. The increase on wages for each year spent at graduate school has now reached 14.2 percent. This means that the return on college investment is always on the rise. It is also important to appreciate that the costs of attending college in some of the elite public universities like Harvard have continued to go down.

There have also been efforts to overhaul the tuition and financial aid system in most of the country’s major colleges with the aim of making affluent citizens bear the tuition burden through a progressive tax system. This has made the top universities, eventually, to be even more affordable. Even without funding, spending extra money on college education is well worth it over a long term. In Texas, for example, community colleges provide courses that are also offered and accepted at any state university offering a similar four year course. It therefore means that one can study for two years with significant savings. Some community colleges like St. Philips as well as Palo Alto, which are constituent colleges of the Alamo Community College system, are known to charge almost 52% of the total fee paid to attend a four year course in a public university. This translates to around one sixth of what private colleges charge for a similar two year degree course (Sidim 1). The issue of affordability should therefore not be a major consideration when evaluating the cost versus benefits of college education since even “families hoping to stretch their money to cover four-year institutions can benefit most by starting at smaller public colleges” (Sidim 1).

There is also the emergence of the concept of tuition discounting to make college education affordable to all. This has been prompted by the rising cost of tuition in public institutions; a practice that has gradually been squeezing students out of colleges on financial grounds. To counter this problem, public universities have adopted a system that has been in use in private universities of tuition discounting. In this practice of tuition discounting, “colleges turn around a share of the tuition paid by some students, and use it to pay for scholarships for others” (Kronholz 1). This basically shows why the cost of attaining a degree for a better life should not be disregarded on the premise of increasing costs when there are such means to see one through college.

Assessing the economic value of higher education requires discounting its benefits in order to make adjustments for the time value of the money invested. The discounted earnings should then be weighed against the costs of achieving college education which will include the tuition and boarding as well as the earnings the student has foregone while attending college and the appropriations offered by the government at both the state and local levels. After calculating these variables, it emerges that the benefits of acquiring college education outweigh the costs three times.

It is a fundamental reality that individual earnings are determined by one’s educational level. For example, high school diploma holders earn higher salaries than those are not and in the same way holders of bachelors degrees earn more than those with a high school diploma; and individuals with a graduate education are paid higher salaries than those with an undergraduate degree. The average yearly earnings of people with an undergraduate degree are 75% higher than those with a high school diploma only. These additional earnings of an individual with an undergraduate degree sum to over $1 million in a lifetime. Differential earnings on the basis of education have continued to increase over time. Individuals from elite universities even earn even more because of the quality of education they are expected to have achieved. This means that despite the rising cost of college education, it still remains imperative to have a degree in order to have a better chance of succeeding in life. In as much as colleges and universities have continued raising the cost of tuition “the income gap between workers with only a high school diploma and those with a college degree continues to widen” (USA Today 3).

When the value of higher education is considered on the same level as the return of a financial investment, the total net return is around 12% annually, which is higher than the rate of inflation. The annual returns from trading in stock have always averaged 7 percent all through the years. There are of course cases of those who are unable to complete their degree courses due to financial barriers but government programs promoting access to education have always provided a solution to this problem. Clark Kim states that the American dream is founded on the principle that education is the gateway to success (65).

At the societal level, a skilled workforce with better educational achievement is very important in enhancing productivity, higher output and income. There are also intergenerational benefits of attaining college education since the more people are educated, the greater the chances of the future generations to b more educated. At the present time, it is becoming mandatory to have at least a bachelor’s degree in order to get a chance for entry-level jobs (USA Today, 1).

Works Cited

Clark, Kim. “Learning the Hard Way.” US News & World Report. 147.8 (2010): 16-24.Academic search complete. Ebsco. Web. 2 May 2011

Clark, Kim. “Trying to Climb a Broken Ladder.” US News & World Report.145.6 (2008): 65-74.

Academic search complete. Ebsco. Web. 2 May 2011.

Kelly, Brian. “Is College Still Worth it?” US News & World Report. 147.8 (2010): 6-12.Academic search complete. Ebsco. Web. 2 May 2011.

Kronholz, June. “College Education Becomes Costlier.” Wall Street Journal (Eastern Edition).New York: 11 February , 2003, D2.

Sidim, Assatou. “College Bound Students, Parents Grapple With Rising Costs of HigherEducation. Knight Rider Tribune News. Washington: 12 July 2004. 1

USA Today. “Rising Costs Make Climbing to Higher Education Steeper.” 1 December, 2007.

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