By Mason Tracewell
It is clear that college tuition has increased drastically and many students are taking on a substantial amount of debt to go to college. The real question is: Why are tuition prices still rising? A recent study has tried to answer this question and the National Bureau of Economic Research’s (NBER) findings suggest that faculty salaries and state cutbacks don’t drive prices higher, but student aid availability drives prices higher. The argument is that the availability of more student aid allows for the schools to charge more tuition, because the students can pay for it. Also the study suggests with more state funding the schools can offer lower scholarships, so that the students pay the same amount, but the college pays out less money.
My problem with the study is that the study includes both private and public college data. I feel you would have to judge the two separately based on the vast differences between them in regards to funding, scholarships, and tuition cost. The researchers used data only from non-profit schools and this may have skewed the data and therefore the conclusions should not be stretched out to all colleges. I agree with the study that faculty salaries are not what drive tuition prices higher. Colleges are relying heavily on part-time faculty and these members get paid low wages with no benefits. Also the model college in the study combated increased faculty costs with increased student enrollment and this also suggests that faculty wages are not the reason for increased tuition.
The Association of Community College Trustees has released a new study analyzing student debt and default rates at Iowa Community Colleges. The report is especially important given that students at community colleges are more likely to default on student loan debt than at other types of higher educational institutions.
One of the major findings was that students were more likely to default if they were not making progress toward the completion of an Associates Degree or other types of diplomas/certifications. According to the report
Sixty percent of defaulters earned less than 15 credits and nearly 90 percent of defaulters did not
earn a credential.
Students with the least amount of credits completed were the most likely to default on their loans.
Parents often suffer sticker shock as they look at the prices of college. However, a new study shows the cost of higher education is similar to purchasing a new car: few people pay list price. This is because most students receive grants from “federal, state, institutional or private sources” according to data from the National Center for Education Statistics.
The study breaks down costs into three categories. First, the average total price of attending the institution. This includes tuition, room and board, fees and transportation costs. Second, the average net price after grants. Finally, the average out of pocket price for students. This is calculated by subtracting student loans from the average net price after grants. Here’s the break down of costs:
by Maria McLaughlin
When students today are enrolling in colleges and universities across the United States the costs as well as the funding is much different than it was a few decades ago. It is interesting to note that 48 out of 50 states are spending less money to finance student educations than they were prior to the ‘Great Recession.’ This means that only 2 out of 50 states are spending the same or more money on financing student educations. Many states are even continuing the trend of reducing funding, which seems to be a problem for students who are collecting boatloads of debt as they continue through college.
States contribute greater than 50% of the financial support that public institutions need. The reduction in public educational spending has detrimental effects directly on the students of these universities. This results in the increase of tuition and decrease in educational services. It was reported in CBPP that since the 2007-2008 academic year, tuition has risen on average 28% (~$1,936 inflation adjusted). Some states have increased by double that rate, and upwards of 80% increases. These factors don’t even represent the increases in tuition for private colleges and universities.
Higher amounts of tuition are spiraling students into debt by the second. This is alarming also because there are high levels of interest that can accompany a student’s finances, depending on the lender. It is disappointing to note that states are continuing to reduce funding for students, and it is a serious issue to be loading on debt to our nation’s future.
Reference: “States are Still Cutting Funding for Higher Education.” 1 May 2014. Huffington Post