In a recent LTE Mr. Ed Williams asks, “How can we possibly make a college degree so expensive that only the wealthy can earn it?” I would also like an answer to that question, except it isn’t “we” who are making college unaffordable; it is those who are running the colleges.
My 1970 four-year civil engineering degree cost less than $5,000, for tuition and books, at a private college, $30,000 when adjusted to 2018 dollars. My decidedly blue-collar family managed to provide enough assistance that, when combined with the income I earned working part time, I graduated with virtually no debt.
Upon graduation, my starting salary was $800/month. My degree cost me less than I earned in my first seven months after graduation.
Today that college charges $140,000 for the same degree, while the average salary for an entry-level civil engineer is $60,000. Today, a graduate now has to work 28 months to earn an amount equal to the cost of his/her degree.
Why has that cost of a four-year degree risen nearly five times the rate of inflation, and so much faster than average starting salary?
CollegeBoard.org published an article on “Trends in College Pricing 2017.” According to the article, the average tuition at a public four-year college and increased from $3,190 in 1987-88 to $9,970 in 2017-18, in inflation adjusted dollars. The article noted that state and local appropriations per FTE student dropped only 13 percent over the period. Why did the cost more than triple while government aid decreased by only 13 percent?
According to the St. Louis Fed inflation-adjusted household median income increased from $53,945 in 1987 to $61,372 in 2017. Real wages increased by 14 percent while the cost of tuition increased by 213 percent.
The only “solution” we seem to hear is that tuition costs need to be more heavily subsidized by taxpayers. Why is no one, especially politicians, asking why costs have risen so much faster than inflation?
The federal government controls the student-loan business; it suckered students/parents into borrowing five times as much during the 2011-15 period as they did during the 1987-91 period, amounts adjusted for inflation. Politicians and bureaucrats seem hell bent on loaning students obscene amounts of money. Why?