The cost of education in college has skyrocketed in recent history. It is undoubtedly the reason why student loans make the second most significant part of the United States’ consumer debt category, only behind home loan debts. Shockingly, this is more than the debt of auto loans or credit cards. Today, Baby Boomers (ones born between 1946 and 1964) and Generation Xers (those born between the early 1960s to late 1970s) can remember having worked their way through college and successfully graduating with very little or no debt. Sadly, this accomplishment is largely considered to be an impossibility for today’s college and university students. To make matters worse, most nations in the world have experienced a low wage growth rate over the past two decades. So, the increase in costs of a degree has outpaced the rate of pay increases over the same period. How expensive is the cost of a college degree?
The Cost of an Undergraduate Degree
The cost of attending a university has been increasing gradually since the 1980s to the current date. Based on the research by the National Center for Education Statistics and other sources, the cost of a four-year university degree in the academic year 2016-17 was $19,488 in a public university. The cost skyrockets to approximately $41,468 for students in a private nonprofit and for-profit university. These totals are average charges for the cost of full-time students and include room and board, tuition, and fees. Adjusting these numbers for 2020, the average price of a four-year degree at a public university is $83,108, and an astoundingly high $187,800 for a private university.
The comparable cost of a four-year degree in 1986 would be $34,416 for a public institution and $82,312 for a private institution, respectively, not adjusting for inflation. This comparison indicates that between 1989 and 2020, the overall cost of a four-year degree has doubled, even after adjusting for inflation.
Change in the Average Wage Rate
The evaluation of the wage rates in a nation is essential when analyzing the rising cost of education. Why? Because the cost of college is increasing at a rate of almost eight times faster than that of wages. The figures showing this, released by the Federal Reserve Bank of St. Louis, indicate that between January 1989 and January 2016, the annual growth rate of wages was 0.3%. This inequity reveals that while students today are paying more for their education today, they are getting less for their money than fellow students thirty years prior. This is a significant concern since it is only through attractive pricing that students and parents can be in a position to afford quality education.
Advice for the Future Generation of Students
For learners who are contemplating their journey into college, it would be best to weigh the cost of a college education with the perceived value and subsequent wages from that degree. Additionally, if a person alters their perception of “success,” they may discern that a college degree is not necessary for many career paths. In fact, some educational paths can be paid for by private institutions while the student works to learn their trade. Do your research. Now, if you have a markedly clear idea of your career path prior to going to college, then see if attending a local public university will get you where you want to go. As we've seen, they are considerably less expensive than going away to private colleges. Moreover, unless you have meaningful financial assistance from parents or college education sponsors in the way of scholarships, then the financial strains of college loan debt may make your choice of going to college a questionable one.