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Are college tuitions ever going to stop increasing?

Started by Piston, October 06, 2012, 07:13:37 AM

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Piston

I don't understand, I realize that the cost of college is naturally going to have to rise with the rate of inflation, or at least close to it, but does it really need to rise at double the rate? Accordign to the Dept. of Eduction, the annual increase in college tuitions is more than outpacing the national inflation and wage growth rate.  It's been going up an average of 6.5% over the last 10 years.  I don't understand how it can continue this kind of increase in costs?  I know some schools have gone up considerably more than that

When my wife became pregnant, I started looking into college savings plans, not even realizing the annual increase in college costs.  I just opened up a 529 plan for my 8 week old son, hopefully he'll remember this when I'm old and crippled and can't even open my own beer anymore.   :D 

Is there anything in place to govern the cost of education?  Or at least keep it in check? 

I don't necessarily want to pay 100% of his costs, I do want him to learn financial responsibilty, but at the same time, I don't want him to graduate with $140,000 in debt.   :(
-Matt
"What the Lion is to the Cat the Mastiff is to the Dog, the noblest of the family; he stands alone, and all others sink before him. His courage does not exceed his temper and generosity, and in attachment he equals the kindest of his race."

thecfarm

No,because we keep paying.  ::)  I'm just saying that. I just had a GD go to college this year. Not a fancy or a well known school either. I did not ask the amount,but she will be paying for it in 4-5 years. It's too bad to be saddled with a big debt as soon as you get out in the real world. I wish her GF was a rich man to help her out.  :(
Nice that you are thinking of your son too. Like I said I'm not a rich man,but even 10 bucks a week adds up in 18 years.
Model 6020-20hp Manual Thomas bandsaw,TC40A 4wd 40 hp New Holland tractor, 450 Norse Winch, Heatmor 400 OWB,YCC 1978-79

WDH

I have a daughter in Vet School.  Annual cost is right at $30,000.  Whew  :).  Piston, you are smart to start planning and saving now.
Woodmizer LT40HDD35, John Deere 2155, Kubota M5-111, Kubota L2501, Nyle L53 Dehumidification Kiln, and a passion for all things with leafs, twigs, and bark.  hamsleyhardwood.com

Ron Wenrich

I get calls from my alma mater for contributions.  They always have a young co-ed give a call, and I get to chat with a student for a nice, long time.  I always get around to how much it costs.  I went to college on less than the interest of $30k.  That was 45 years ago, and it included tuition, books, transportation, and room and board.  Tuition at that time was $450.  Now its $15k.  Private schools are $25-28k in my area.

A friend of mine put money into a 529 fund for his grand daughter.  The fund didn't give the return as advertised, so they came up short.  Its hard to predict what prices will be in 18 years.

Community colleges give a good bang for the buck.  Their credits are widely transferable.  My son went to the local CC, but failed to get his degree.  He decided it was better to work in daycare than get a degree in elementary education.  That was his choice, and he later found out it to be a poor one.

He is now a dealer at a casino, and he wants to move up in the company.  He decided to go back to college, and wanted to do one on line.  My advice to him was to find one that was accredited in his chosen field, which is business.  He takes 2 courses at a time, and they last for 2 months.  Its worked out well for him, so far.  They took all his credits from the CC, which is something that some other colleges didn't want to do. 

I think that in the future, on line college courses are going to be more mainstream, and the bricks and mortar institutions will be reserved for those that can afford it or for graduate level research.  The only downside for online is you miss the college experience. 
Never under estimate the power of stupid people in large groups.

Piston

Ron,
You bring up a good point with online courses.  There is a good chance that many people will go that direction if colleges are allowed to continuously raise their tuitions, moreso out of necessity rather than choice.  The problem here, is that as colleges raise tuition, the cost of online courses will be raised similarly. 

I went to college in the fairly recent past (wow, I just realized I graduated 9 yrs ago, that went by fast! :o)
I graduated in 2003 from Mass Maritime Academy.  At the time, tuition was right around 12k per year if I remember correctly, not including books, uniforms and all that good stuff, but including room and board since it was mandatory. 

I just checked they're website, it's gone up to 18k per year for in state students, and 33k per year for out of state.  That is just rediculous! 

I still have student loans that I'm paying back, although I only have one year left.  8)  My interest rate is 2.8%, right now, student interest rates are much higher, I believe somewhere around 5%.  Assuming the average cost of college is right around 30k per year now, then 4 yrs of school cost close to 120k.  Even HALF that cost at 5% interest is a difficult loan to pay off. 

It's sad that even with the state of the economy, college tuitions keep increasing at such a substantial rate. 

Oh and the killer is, this is only for ONE kid! 
-Matt
"What the Lion is to the Cat the Mastiff is to the Dog, the noblest of the family; he stands alone, and all others sink before him. His courage does not exceed his temper and generosity, and in attachment he equals the kindest of his race."

Warbird

QuoteAre college tuitions ever going to stop increasing?

Not as long as there is inflation, advancements in technology and knowledge, and government cutbacks to university funding.  The faster the human race advances, the faster universities have to be prepared to prepare our young people to be ready.  That costs a lot of money.  And the tuition a university brings in is no where near enough to cover costs.

That said, there are things colleges can do to reduce costs.  Such as, cut funding for what I call the more 'worthless programs' - Liberal Arts, Philosophy, etc.  There are some important things a student learns in those areas, but to have entire programs dedicated them, churning out students into a world with no jobs in that field is, IMO, a waste of resources.

martyinmi

Quote from: Piston on October 06, 2012, 07:13:37 AM

I don't necessarily want to pay 100% of his costs, I do want him to learn financial responsibilty, but at the same time, I don't want him to graduate with $140,000 in debt.   :(

Piston,
   I started buying savings bonds for my daughter when she was 2 1/2 and continued through her 18th birthday. My employer at the time took out $50/week and made the purchases for me. I had something over 40k invested in those years. We began cashing them out the summer she graduated (2000) and continued through 2004 until they were gone. I do not remember the exact amount we got after they were all cashed in, but I believe it was in excess of 50k or so with all the interest. She has since went on to earn two masters degrees, and has less than 3 years to go until she receives her doctorate(PHD?). I asked her at Christmastime last year how much extra debt she had acquired since '05 and she wouldn't tell me. I did push a little harder, because that's what us dads do, and she did hint that her debt load had surpassed the 150k mark, but she wouldn't say how much.

   I was where you are at back then, in that I wanted to do all that I could to make her post high school life easier than mine was.

   At this point in time the jury is still out on whether I actually did her any favors by paying for her first few years of college. After those monies were exhausted, the student loans started rolling in, with no means to pay them off. She's been in the system so long now that living off student loans has become a way of life. Like so many other long term students, she feels that higher education is something that she's entitled to, and she doesn't really think she should have to pay back what she owes.

   Things are going to be different with my son. He WILL work all the while he's in college. The monies we have saved will be meted out by me. And, come heck or high water, he will learn that the responsible thing to do when you have accumulated debt is to pay it off.

   I guess what I'm trying to say is that it is entirely possible to do too much for your kids. They need to understand that money is not just something that mom and have an endless supply of. The fact that parents worked their butts for the saved college money is a point that should be driven home at an early age.

   Saving money for your child's education-good. Spoiling kid with said saved money-not so good!
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woodhick

I have two kids, a daughter (21) and a son (19) both in college.  My wife and I never saved in any of the 529 or other "college" plans.  We planned to have our house paid for when my daughter was 18 and that is what we done.  She is a senior this year and he is a sophmore.  She is in communication disorders for speach pathology/audiology and he is working on a civil engineering degree.  My state (WV) has a promise scholarship program for kids that if they make certain grades in high school it kicks in for college.  I think its 3.5 but they keep raising the bar on it. 
   I cant complain about cost for either one.   They both have done great with there grades and with the state promise scholarship and school scholarhips I have not had to pay much.  I have bought a parking pass for my daughter each year for a cost of $145 each year and paid for one summer class at $1100.
   My son has also covered all of his expenses of tuition and books with scholarships.  He is living at his school so it costs me $650 a month for an apartment for him where my daughter commutes daily and lives at home.  Not saying you should not save as costs do keep going up. But when your child gets in high school impress on them that grades are money (scholarships).
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scgargoyle

The so-called inflation rate isn't a very accurate indicator of how much living costs increase, because certain key indexes are left out. Have you checked the price of food lately?

We 'played the system' in FL, and did very well with our son's education. We pre-paid tuition in a lump son when he was a toddler, and got 4 years of tuition for $5000! He also qualified for a 75% state scholarship, and there was a loop-hole. The scholarship reimbursed at the current tuition rate, not what we paid, so we actually got $1200 BACK every semester! We put that money away for graduate school, so his Master's degree was largely paid for. I believe FL is no longer so free with the taxpayer's money, but it was great for us.
I hope my ship comes in before the dock rots!

Norm

There are political reasons for college tuition rates. A few years back one of our state senators suggested that maybe college professors actually work more than a few hours a week. You couldn't believe the flack he got.

My oldest son joined ROTC and after his freshmen year they paid for tuition and books. We paid for his rent but he still worked summers for help on spending money. The younger one took community college courses during high school so only had to do two years at the university for his bachelors. I had told them early on that if they went on after that to get another degree it was on their dime. Both got their masters degrees and are probably still paying off student loans. I did help them out while they were working on the masters but not to the point of paying for it. Each of them worked at various part time jobs while going to school.

I would also suggest that college is not worth the expense for most who go there. I can't tell you how many I've seen get worthless degrees that will not get you a job in the real world. My plumber gets $75hr and the electrician close to that. I went to a tech school for electronics and have done well for myself with it. 

okmulch

Kids these days seem to think they have to go to a four year college. IMO there is nothing wrong with a two year trade school. Electricans and plumbers make living.
The other day I over heard some kids say they were going to oklahoma state for a couple of years and just taking basic courses and then they would figure out a degree.
With tuition as high as it is, as a parent I would be worried!
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tcsmpsi

Though it is not a 'popular' design, you are correct, Norm.  How much work/time will it take to pay $200,000?  The oldest daughter, having been home schooled until 7th grade, took naturally to learning and had an excellent foundation of communication and principle.  She got full scholarships offered by a number of schools.  She chose LSU.  I helped what I could, but it wasn't much, overall.  She worked 2 and 3 jobs, applied herself to the community, and went on to her MBA with a 4.0.  She had near limitless opportunities waiting for her with open arms.  She got her CPA and CFE (certified fraud examiner), and now is senior partner in her own consulting firm.  She is still paying for school. 
\\\"In the end, it is a moral question as to whether man applies what he has learned or not.\\\" - C. Jung

thecfarm

Norm,but that $75 an hour is manual work . :o  I have a step son and my wife's nephew feel that even turning a screw driver is above them.
Model 6020-20hp Manual Thomas bandsaw,TC40A 4wd 40 hp New Holland tractor, 450 Norse Winch, Heatmor 400 OWB,YCC 1978-79

Delawhere Jack

Quote from: Piston on October 06, 2012, 07:13:37 AM


Is there anything in place to govern the cost of education?  Or at least keep it in check? 


So long as Sally Mae keeps guaranteeing student loans prices will keep rising. Another example of the Gov. coming to the rescue and getting the market all screwed up.

One thing that could force tuition down are all the current graduates coming out and not able to find work.


Kansas

This is a radical idea. But why not limit the colleges to a set amount they can spend on athletics. Kind of like the NFL limits payroll, limit how much they can spend on it. Seems to me they generally have huge endowments that get channeled into hiring coaches, weight rooms, you name it. You might do the same thing on research. Is it really asking that much for a professor to teach more than a class or two a semester?

Not many years ago, all the universities in Kansas went to the state legislature and begged for money because all the buildings were falling apart. DanGed if they didn't get it. You mean to tell me you weren't budgeting money over the years to keep them in good shape? They didn't have endowments to help with that? They should have fired every one of the university presidents.

Dan_Shade

higher education is a business of sorts, only they get their money from tuitions and grants.  I imagine that profitable programs (athletics) supplement ones that aren't so profitable (humanities?).

I was able to get an associates degree from a local college, Shepherd (which is now a university), and my bachelors degree from WVU, I lived at home 2 years, and had a part time job for most of my school years.  My folks provided me a vehicle, and never charged me rent, they also helped me out with 2nd semester tuitions of my junior and senior year.  They provided me with a very nice safety net.  I was also able to get a few scholarships along the way.

With that said, I was able to graduate after 4 years with no loans.  I had friends that wracked up $50-60k at the same time.  I guess I was a tightwad. 

I had a teacher in high school that once said that the purpose of an education was to teach you how to learn.  I think that's very true.  I think that education should be available for those that truly want it.
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Kansas

Actually Dan, if you remove subsidies, most college athletic programs are not profitable. Obviously some of the very biggest names are. At the smaller colleges, every one of them lose money.

I am not saying that college athletics are a bad thing. It just seems to me you might be able to have good programs without multi million dollar salaries for coaches and directors. I don't know if there is much incentive to save money at colleges.

I will say that community colleges are generally very good value for the money. We have a strong system here, with a satellite place where they hold classes just down the road from me. A lot of outreach classes are held at local high schools. I went to a number of classes at them. Also, some of the seniors in high school can go there and pick up credit.

sparky1

My wife racked up 70 grand in student loans when she was in school for 8 years. She has a great job, but doesnt want to work full time.. go figure ??? neither do I.  I have to pay 500 a month for many years to pay this off. The interest rate on student loans are really not good either. I just refinanced my house and my home is better interest rate than her loan. Now we have good jobs and can pay for everything fine. I do think its a bad situation that alot of young adults are thrust into huge debt, no job, and forced to pay interst on their loans.

To me the student loans should be interst free of even 1%. The government gives farmers a 1% loan for buying things (my cousin bought 150 acres and his house at 1%)  Just my opinion. wont change nothing.

I opted to go in the trades got my learning through work, went into an apprenticeship. Been  working there 11 years get paid good. No debt for school.  worked for me, not everyone though..
Shaun J

Amelia Farms

We are now in a education bubble, just like we had a housing bubble. The common denominator is loaning money to people that have no reasonable expectation that they can pay it back, and then sell the loans off to somebody else. In this case that somebody is the US gov via Sallie Mae. When the money flows freely from unlimited spigots, that creates artificial demand.

However, one major difference is that student debt can never be discharged in bankruptcy. So, we now have a huge part of a generation starting out their working lives already tens or even hundreds of thousands of dollars in the hole.

At some point, just like the housing bubble, it will all come crashing down.
Woodmizer LT40, wish it was hydraulic.

Mark Wentzell

I do think politics plays a role in it. Up here (not sure about the states) the voter turnout among college students is abysmal. They'll protest the tuition hikes but that really won't do any good unless the right people are voted in at the top.

Another issue is the job prospects for people with a university degree. I read about a study a few months ago that said the mean salary of people with a four year undergrad degree was $17500; while the  mean for the whole country was something like $41000. Too many liberal arts majors, many of whom end up working as waiters.


jdonovan

Now that the Gov't took over the student loan business, and made student loan debt non-dischargeable via banckrupcy they have very much screwed up the economy of education. The prices of schools have adjusted to fit what the government will loan out. All this is predicated on getting a high paying job when you graduate.

I think the education plan for kids (if I had them) would be strongly based on a local community college for the first few years, and then finish at a state school. Also a skilled trade, electrician, hvac, plumbing etc... seems to be a very reasonable option given the unrealistic prices of a college education these days.

Warbird

I think maybe you guys are being a bit too harsh but you do have a point.  Here is my personal example:

I have 2 degrees and I put myself through college.  My first degree is just an Associates of Applied Sciences in Petroleum Science and it was a full tuition scholarship paid by ARCO (before they sold off their holdings in Prudhoe Bay).  I graduated in 2 years then decided the oil fields were not for me.  Spent a few years messing around, following my girlfriend around the nation, getting married, etc, then figured out I wanted a good job in a good paying field.  Being very good with technology and science, I figured there will always be computer problems that will need fixing.

My second degree is a Bachelor of Science in Computer Science.  I paid for that one with student loans.  Mostly federal loans but I had a few state loans, too.  When I graduated this time, I had ample job opportunities across the country.  Still, the amount of my loans combined equated to 1.75 years of what my starting salary was at that first job.

The federal student loan consolidation program is/was very good.  I was able to consolidate all my federal loans into one, at about a 3% interest rate (this was well over 10 years ago).  The state loan consolidation program sucked and cost us a fortune to pay off.  You can bet your bippy we paid those (both my wife's and mine) off first.

Fast forward to today.  I have a good salary, job stability, state loans paid off, and since my federal loan has a lower interest rate than my house loan, it will be paid off last.  That said, it's now about half of the original loan amount.

I share all of this with you to detail 1 very important thing that someone else sort of hit on:  Imagine where I'd be if I'd majored in Liberal Arts, Basket Weaving, or the like?  There is a VERY simple solution to all of this.  STOP giving out loans for worthless degrees!!  Being a lienholder is a business.  It's time it started operating like it wasn't TRYING to go bankrupt.

Even though I work(ed) my butt off to pay back my loans, because of my choices of study, I was a good bet to actually be able to pay back what I'd borrowed, along with the interest.  Not so much with many others.

*edit*  Changed where I'd said 'subsidizing' to 'consolidating'.

Piston

I have a great freind who went to a well known university.  He graduated with just over 100k dollars in student loans.  His major was music industry.

When he was growing up, his parents always told him to persue a career in something he loves, and everything else will fall into place.  Well, he loved music, so he chose music industry as a major.  He graduated and couldn't find a job.  He got a job working at a chain restaraunt as a waiter and lived with his parents for 7 more years after graduation.  He finally got a job in the music industry business making what the national average is.  At least he finally has benifits.  He still has 22 yrs left on his student loans. 

On the other hand, my parents taught me to persue a career in something I enjoy doing, that pays well, and keep the things I LOVE to do as hobbies.  That is exactly what I did. 

I think too many people persue a carreer in something they love doing without really considering whether or not the industry as a whole will pay, and continue to pay, a salary that they will be happy with. 

-Matt
"What the Lion is to the Cat the Mastiff is to the Dog, the noblest of the family; he stands alone, and all others sink before him. His courage does not exceed his temper and generosity, and in attachment he equals the kindest of his race."

Ron Wenrich

A friend of mine got his degree in philosophy.  He's now a lawyer.  Another guy I knew had a Master's in German literature.  He's a research physician.  A guy in my college class got a degree in forestry.  Now he's a plumber.  Another forester friend runs a bed and breakfast.  There's a guy with a PhD in physics that runs a sawmill.  Go figure.

Sometimes its not where you end up, its the journey that counts. 
Never under estimate the power of stupid people in large groups.

celliott

I am currently going for an AAS Forest technology. After I earn that degree, I am going to come back to earn a Bachelor's of Forestry. I figure it's not really a bad time to be in school. I took an indirect road to college, went right out of high school, left after a semester, worked for awhile, debated trying other things, and took a few community college classes. I realized pretty quick I didn't want to work in a factory for the rest of my life. I knew people where I worked that started there out of high school, and are still there 30 years later. I don't want that, I want a job where I can be outside in the woods. So those few years motivated me to buckle down and FINISH my college education. As to the cost, yes it is quite alot. I go to a private school, I get some financial aid from the college, some federal, and the rest is out of pocket. I pay as much as I can, my parents help out too. I became a residential assistant this year, a job I am thankful to have, because it cuts the room+board out of my bill, which is a significant chunk. There are alot of dutys and responsibilities to the job, as well as some drawbacks (22 year old living in a freshmen dorm) but the savings is well worth it.  I feel the investment into  my education will be worthwile, no matter the time to pay back my student loans. I would rather work a job I enjoy than one I don't.
Chris Elliott

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