Wednesday, July 24, 2013

Higher Education Tuition: Preying On Parents + Students With Costs They Can No Longer Afford

Department of Education Study Finds Teaching These Little Shits No Longer Worth It...The Onion

  • This week USA TODAY ran a piece reporting that parents are contributing less of their income and savings towards college costs from 37% two years ago to 27% now. Much of this can be attributed directly to the poor economy and recession. Many parents just can't afford college for their children.

  • Yet even with the challenges facing parents and students, college tuition costs continue to rise at extraordinary and disturbing rates. Last year, Bloomberg News reported the cost of a college degree increased by 1,120% since 1978. That's right. That's not a typo---1,120%. In fact, medical costs are a bargain compared to getting an education. During the same period, medical costs increased by 600% according to the same report.
  • According to the Unites States Census, the cost of a four-year private college or university is now almost $41,000 a year.
  • The unintended consequences of this type of highway robbery has students and parents burdened with over $1 trillion in student debt. In fact, a recent report by the NY Federal Reserve found that even Americans over 60--Boomers--now owe over $4B and carry an average of almost $20,000 in college debt. USA TODAY reported that For-Profit educated 10% of college students but account for nearly half of student-loan defaults.
  • The result of this trend in rising tuition is the rising use of grants and scholarships. Five years ago, half of families reporting leaning on grants and scholarships. Today, more than two-thirds do (Sallie Mae). However, even with this financial assistance, the cost of college is increasingly becoming more unaffordable for the middle class.
  • While there have been decreases in funding to public universities, the Federal Reserve reported that grants are also to blame for higher education costs. In other words, as students receive federal grants to attend college, the institutions raise their tuition to reflect this aid.
  • Just as disturbing, these colleges and universities are pumping out graduates who cannot find employment. A Rutgers University Study found that 1 in 2 college graduates have full time jobs. This has resulted in college graduates putting off the purchase of homes, vehicles and even marriage. The current state of the economy accounts for some of this, but there's another reason: colleges and universities know there are not enough jobs out there for all the students graduating. Yet, they still keep burdening students with degrees that give the graduates little chance of finding suitable employment. For example, the unemployment rate for graduates with a degree in Psychology is about 19% (Bad Economy Jobs). As recently as 2012, only 24% of graduates with liberal arts degrees found employment in their field. In addition to being unable to find work, many degrees don't pay well. Some of the worst-paying college degrees include music, philosophy, fine arts, anthropology and drama/theatre (AOL-Jobs). Last year approximately 20 million students were enrolled in our colleges and universities. The number of college degrees conferred was about 3.5 million in 2011 (US Census).

  • If these trends continue, I foresee a time when this current model of higher education will become obsolete. Unless things change and quickly, parents will begin questioning why they should be mortgaging their own futures to pay for obscene tuition. We're already witnessing an explosion in on-line degrees or blended on-line college programs.  Over 4 million students are using this path to a degree. This trend will continue to grow. As it does, parents and students will realize they don't have to attend the brick and mortar dinosaurs. And major companies and corporations will also learn self-taught students will be just as competent. It's just a matter of time.