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College: Cost too much?

zzzz

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Good article on the rising costs of going to college. Am I glad I have my degree!

Back in 1989, Hoosier freshmen at public colleges paid an average of $1,685 a year in tuition and fees. Next year, they will pay four times that -- $6,922 -- a 311 percent increase.

From 1989 to 2011, Purdue University's main campus in West Lafayette has raised tuition 395 percent; Indiana University in Bloomington, 370 percent; and Ball State, 356 percent.

In that same time, the Consumer Price Index has increased 81.9 percent, according to a Bureau of Labor Statistics calculator. If Purdue's tuition increase had matched that Consumer Price Index increase dollar for dollar, the 1989 tuition of $1,916 would be $3,487 -- as opposed to the $9,478 Purdue students will pay during the 2011-12 school year.

That's even more staggering when you consider Indiana's median family income rose just 33 percent during that time.


Colleges charge big tuition because they can | Journal and Courier | jconline.com
 

Toro

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This is an interesting topic.

I think the gap between what is needed to pay for a top private college and an in-state college is becoming too wide. The cost of one top-tier private college I know of and a good in-state college is $200,000 over four years. I am extremely skeptical that the extra $200k is worth it over the long-run.
 
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Oddball

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I wonder where all the hand-wringers from the left are on this "price gouging" by Big Edumacation?

tumble-weed-smiley.gif
 

chanel

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We will be paying for two next year. They have been offered no assistance because of our income. That's ok. We've saved since they were born.

What's not ok is the waste and corruption that goes on at these schools and the GD nickle and diming for extra fees, textbooks, health insurance, etc. What's not ok is using tuition and taxpayer money to pay for foreign students to attend for free. What's not ok is paying football coaches $2M a year.

And what really gets my goat is FERPA. If I am putting out $40K a year, I should have the right to monitor my investment. If they want to treat students as independent adults, then use THEIR friggin income to calculate the bill.
 

editec

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In part the cost of education rising has to do with the availability of loans to pay for college.

This incidently, in also why the cost of health care rose at a rate so much higher than inflation generally.

Ironic, no?
 

Toro

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Mama, don't let your babies grow up to be lawyers. Financially, it's not worth it unless you go to a top tier school and get hired by a big Wall Street firm.

y undertaking some straight-forward analysis of the factors that come into play I hope to spur future generations of potential law school attendees to think about the question rationally, as one of making an investment. If your law school education were a stock or a bond, offered in the marketplace, would you buy it? Should you buy it? Why or why not

My methodology is as follows. First, I identify the costs of attending law school. These are two: the opportunity cost of not entering the workforce immediately after graduation from college, and the out-of-pocket costs, primarily tuition, fees and books, inherent in attending law school. Based on these costs, I calculate the annuity-like return that must be achieved to recover the costs. This process is more complicated that it might seem, as it importantly requires isolation of the true benefits in terms of compensation offered by a law degree and the identification of an appropriate discount rate for converting such incremental compensation to net present value. ...

Suppose we convince ourselves that 17% is the appropriate discount rate for the incremental earnings generated by a law degree. Then Solid Performer would need to expect to earn, on average, $33,121 more in his first year of legal employment than he would have earned had he not gone to law school. Given that his hurdle compensation is $80,035, it follows that he must expect to earn $113,156 in his first year. Moreover, the $33,121 wage differential would need to be maintained, and indeed increased at a rate of 3.5% per annum, throughout the remainder of his career. ...

For the Class of 2008, the last year for which statistics were available, the median salary of a fledgling lawyer was $72,000. That salary obviously does not stack up very well against the required salaries set forth in my table. But that median salary tells a hopelessly deceptive story. The distribution of salaries was in fact bi-modal, with fully 42% of salaries falling between $40,000 and $65,000, and a smaller but still very significant number clustered at the elite Biglaw starting salary of $160,000. ...

With the tiniest bit of twenty-twenty hindsight, it is possible to identify, already in the third year of law school, some of the students who have made what has turned out to be not only an ex ante bad investment but an ex post losing investment. Thus, consider the 50% of hypothetical Solid Performers who do not end up with a job offer from a Biglaw firm. They begin their legal careers at a salary that is no higher, indeed is actually lower, than the one they could have obtained without having gone to law school. They are unlikely ever to dig themselves out of that hole.


Mamas Don't Let Your Babies Grow Up To Be...Lawyers by Herwig Schlunk :: SSRN

I read somewhere that law school applications have been dropping.
 

Quantum Windbag

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This is an interesting topic.

I think the gap between what is needed to pay for a top private college and an in-state college is becoming too wide. The cost of one top-tier private college I know of and a good in-state college is $200,000 over four years. I am extremely skeptical that the extra $200k is worth it over the long-run.

It is not even close to being worth it.

One rule of thumb I recently came across was what a college pays its dean. If they pay a higher salary to "compete" with the business world they charge too much for tuition.
 
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aplcr0331

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It should be abundantly clear to any high school student the problems that come with using debt to finance college. How can anyone be suprised how debt works in this day and age? Any high school student should also be able to notice that not all colleges are priced the same. If they know this, they can figure out that not all jobs pay the same. If you want fincial independence your going to have to get a degree that gives you a good job, from a college that costs you as little as possible. It's a simple math problem that we should expect ANY college bound student to grasp.

And yet students STILL make poor choices. And that is alright, but they should be allowed to lay in the beds they made. Same as the real estate bust. Make a stupid deal, and you get to live with your mistakes. Even if you don't learn from them, you can serve as an example to others of what not to do.
 
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chanel

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High school kids aren't that bright. True story. :lol:
 

rightwinger

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It should be abundantly clear to any high school student the problems that come with using debt to finance college. How can anyone be suprised how debt works in this day and age? Any high school student should also be able to notice that not all colleges are priced the same. If they know this, they can figure out that not all jobs pay the same. If you want fincial independence your going to have to get a degree that gives you a good job, from a college that costs you as little as possible. It's a simple math problem that we should expect ANY college bound student to grasp.

And yet students STILL make poor choices. And that is alright, but they should be allowed to lay in the beds they made. Same as the real estate bust. Make a stupid deal, and you get to live with your mistakes. Even if you don't learn from them, you can serve as an example to others of what not to do.

High School kids are not that smart. They do not look at cost/benefit analysis of what you pay at one school vs another or the employability/salary potential of one major vs another

They choose schools based on:
Where their friends are going
It is near the beach/ski resort/bars
How good the Football/Basketball team is
Nightlife
It has a name that will impress their friends

Too many parents give their kids too much lattitude in the school and major their kids select. If you are paying for it, you should have a say in where your money will be spent. You are looking at 18 year old kids...do not expect them to make rational decisions
 

chanel

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Well said rw.

Community college for two years is probably the best route for most kids. We considered it, but decided against it for a number of reasons.

We have the money put aside. That was our #1 savings priority since the kids were born. But if they had to take on this debt themselves, I would not allow it.

Kid #1 toyed with the idea of teaching for 15 mins. I told him I'd support anything he pursued, but NOT at a private school in DC. He changed his mind quickly.

Both of my boys now know exactly what they want to do and are at schools with the right programs. We can only cross our fingers that they find jobs afterwards.
 

mudwhistle

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I wonder where all the hand-wringers from the left are on this "price gouging" by Big Edumacation?

tumble-weed-smiley.gif

They figure is a necessary evil.

A piece of paper is worth it's weight in Gold. Heh, heh

People will just throw job offers at anyone that has a Harvard Law Degree.

Just ask Obama.
 

rightwinger

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Well said rw.

Community college for two years is probably the best route for most kids. We considered it, but decided against it for a number of reasons.

We have the money put aside. That was our #1 savings priority since the kids were born. But if they had to take on this debt themselves, I would not allow it.

Kid #1 toyed with the idea of teaching for 15 mins. I told him I'd support anything he pursued, but NOT at a private school in DC. He changed his mind quickly.

Both of my boys now know exactly what they want to do and are at schools with the right programs. We can only cross our fingers that they find jobs afterwards.

My son went to Community College for two years and it worked out great. Classes were smaller and if you screw up a class it costs $300 to retake it vs $3000 at a private university

He majored in Architecture and after two years transfered to Drexel ($35,000 a year). They accepted every one of his credits from Community College so it ended up costing $5000 for the first two years instead of $70,000.

His Diploma will still read "Drexel University"

Problem is that kids and parents look at attending Community College as being a failure and not being able to get into a "real school"
 

aplcr0331

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Well said rw.

Community college for two years is probably the best route for most kids. We considered it, but decided against it for a number of reasons.

We have the money put aside. That was our #1 savings priority since the kids were born. But if they had to take on this debt themselves, I would not allow it.

Kid #1 toyed with the idea of teaching for 15 mins. I told him I'd support anything he pursued, but NOT at a private school in DC. He changed his mind quickly.

Both of my boys now know exactly what they want to do and are at schools with the right programs. We can only cross our fingers that they find jobs afterwards.

My son went to Community College for two years and it worked out great. Classes were smaller and if you screw up a class it costs $300 to retake it vs $3000 at a private university

He majored in Architecture and after two years transfered to Drexel ($35,000 a year). They accepted every one of his credits from Community College so it ended up costing $5000 for the first two years instead of $70,000.

His Diploma will still read "Drexel University"

Problem is that kids and parents look at attending Community College as being a failure and not being able to get into a "real school"

Me too. My degree still says "Washington State University". There's no asterisk stating "first two years at a community college".
 

Skull Pilot

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The reason college is so expensive is that the sheep have fallen for the ," Everyone needs a college degree" advertising scam.
 
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kwc57

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We will be paying for two next year. They have been offered no assistance because of our income. That's ok. We've saved since they were born.

What's not ok is the waste and corruption that goes on at these schools and the GD nickle and diming for extra fees, textbooks, health insurance, etc. What's not ok is using tuition and taxpayer money to pay for foreign students to attend for free. What's not ok is paying football coaches $2M a year.

And what really gets my goat is FERPA. If I am putting out $40K a year, I should have the right to monitor my investment. If they want to treat students as independent adults, then use THEIR friggin income to calculate the bill.

My son is sitting in his very first college class right now. Boy, have things changed since I graduated in '79. I went to a private college and my son is attending a land grant university. Back in my day, we had a cafeteria where we ate every meal. At his school, they have convenience stores, cafes, restaraunts, fast food joints, etc. that are all part of their meal plan they just swipe their ID for. We lived in dorms (he does too) where the schools today have apartments and suites. We walked to our classes. They have a free bus system. We had a couple of Barney Fife security guards. They have a fully trained police force. I could go on and on, but you are already living it. The services provided in many of today's schools make them seem like a country club compared to what I experienced. All of those amenities cost bucks. Tuition isn't just about education anymore.
 

rightwinger

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The reason college is so expensive is that the sheep have fallen for the ," Everyone needs a college degree" advertising scam.

Even so...It is not just colleges that are overpriced, it also applies to trade schools. To go to one of those schools and get a certificate in HVAC, welding, truck driving, plumbing costs as much as attending a major university

Kids who go to trade school and flunk out are still stuck with big bills
 

waltky

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Goin' in debt to go to college...
:eusa_eh:
Student loan debt hits record levels
Full-time undergrads borrowed an average of $4,963 last year, according to the College Board.
Students and workers seeking retraining are borrowing extraordinary amounts of money through federal loan programs, potentially putting a huge burden on the backs of young people looking for jobs and trying to start careers. The amount of student loans taken out last year crossed the $100 billion mark for the first time and total loans outstanding will exceed $1 trillion for the first time this year. Americans now owe more on student loans than on credit cards, reports the Federal Reserve Bank of New York. Students are borrowing twice what they did a decade ago after adjusting for inflation, the College Board reports. Total outstanding debt has doubled in the past five years — a sharp contrast to consumers reducing what's owed on home loans and credit cards.

Taxpayers and other lenders have little risk of losing money on the loans, unlike mortgages made during the real estate bubble. Congress has given the lenders, the government included, broad collection powers, far greater than those of mortgage or credit card lenders. The debt can't be shed in bankruptcy. The credit risk falls on young people who will start adult life deeper in debt, a burden that could place a drag on the economy in the future. "Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married (and) having children," says Mark Kantrowitz, publisher of FinAid.org.

"It's going to create a generation of wage slavery," says Nick Pardini, a Villanova University graduate student in finance who has warned on a blog for investors that student loans are the next credit bubble — with borrowers, rather than lenders, as the losers. Full-time undergraduate students borrowed an average $4,963 in 2010, up 63% from a decade earlier after adjusting for inflation, the College Board reports. What's happening:

•Defaults. The portion of borrowers in default — more than nine months behind on payments — rose from 6.7% in 2007 to 8.8% in 2009, according to the most recent federal data.

•For profit-schools. The highest default rates are at for-profit schools that tend to serve lower-income students and offer courses online. The University of Phoenix, the nation's largest, got 88% of its revenue from federal programs last year, most of it from student loans.

"Federal student loans are like no other loans," says Alisa Cunningham, research chief at the Institute for Higher Education Policy. "The consequences are so high for making a mistake."

Source
 

Katzndogz

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Would tuitions be that high without the salaries professors demand and their unions obtain? If it wasn't necessary to have expensive state of the art equipment would that affect tuition.

The college kids want, they just don't want to pay and since slavery is illegal, we can't force the faculty or staff to work for less.

The big problem for these grads isn't so much that student loans are so high, it's that they can't find a job once they graduate. There is nothing worse than graduating college with a worthless degree and can't find someone to pay you for what you should never have learned in the first place.
 

mudwhistle

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Well said rw.

Community college for two years is probably the best route for most kids. We considered it, but decided against it for a number of reasons.

We have the money put aside. That was our #1 savings priority since the kids were born. But if they had to take on this debt themselves, I would not allow it.

Kid #1 toyed with the idea of teaching for 15 mins. I told him I'd support anything he pursued, but NOT at a private school in DC. He changed his mind quickly.

Both of my boys now know exactly what they want to do and are at schools with the right programs. We can only cross our fingers that they find jobs afterwards.

My son went to Community College for two years and it worked out great. Classes were smaller and if you screw up a class it costs $300 to retake it vs $3000 at a private university

He majored in Architecture and after two years transfered to Drexel ($35,000 a year). They accepted every one of his credits from Community College so it ended up costing $5000 for the first two years instead of $70,000.

His Diploma will still read "Drexel University"

Problem is that kids and parents look at attending Community College as being a failure and not being able to get into a "real school"

I started out at a California community college. I actually learned while I was there.

Went to SDSU and learned very little. Spent a lot more.
 

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