Eric Tyson - Paying For College For Dummies

In this chapter, we confront the high prices at many colleges and universities, look ahead to the employment reality students face upon graduation and discuss how the college and post high school landscape is evolving to address these important trends.

Okay, let’s get the bad news out of the way. Yes, college is expensive. Consider the supposedly “best” private colleges which on most lists includes colleges and universities like Brown University, Carnegie Mellon University, Colgate University, Columbia University, Cornell University, Dartmouth College, Duke University, Georgetown University, Harvard University, Johns Hopkins University, Lehigh University, MIT, Northwestern University, Princeton University, Rice University, Stanford University, Tufts University, University of Chicago, University of Notre Dame, University of Pennsylvania, University of Southern California, Vanderbilt University, Washington & Lee University, Washington University, and Yale University.

Tuition, room, board, books, and other fees will run you $250K to $300K or more over four years! Stop and think about that high cost for a moment.

If that’s not daunting enough, getting into these schools is ridiculously difficult and competitive to do. High school students are packing their schedules with Advanced Placement and honors courses, burning the midnight oil to get that elevated grade point average, playing sports, running for student government, playing in the band, volunteering regularly and jumping through other hoops.

In the hopes of making their future college applications tempt admissions officers, students must also often seek other ways to stand out and be different. Being from a small state, rural or non-wealthy area certainly helps. Living in a non-wealthy area and attending a not so great public school may help your case also.

While quite a bit less expensive if you qualify for in state tuition rates, public colleges are getting more and more expensive and can easily set you back for well over $100K for a four-year education. If you attend a top public college as an out of state resident, expect to pay upwards of $200K for the four years — about the same freight as those going to a typical private college.

Looking back over the past 50 years, after adjusting for increases in the general cost of living, tuition and fees at four-year colleges have jumped in real terms (that is, above and beyond the general rise in the cost of living) by more than 240 percent at private colleges and 340 percent at public colleges according to data from the National Center for Education Statistics. This trend obviously can’t continue because few families can afford to pay the already big dollar amounts today.

High-priced four-year college degrees are a relatively recent and not entirely attractive phenomenon. After World War II, with the GI bill (designed to help servicemen returning to society) and massive investments at the state public university systems and federal levels with the availability and promotion of Pell Grants and student loans, adults with college degrees mushroomed from just 5 percent of the adult population to more than 30 percent.

The most recent figures show that about 35 percent of U.S. adults age 25 and older have completed a four-year college degree. 48 percent of 25 to 34-year olds have a college degree. About 13 percent of all adults have completed an advanced degree — that is a master’s degree, professional degree, or a doctorate degree.

That said, here’s another and truly shocking and important to know statistic: only about 55 percent of those who enroll in a four-year college degree program actually complete it. Think about that for a moment — this means that a whopping 45 percent of those who head down that costly road end up with no credential and therefore have probably wasted their time and money. In case you’re wondering, community college is no better in that regard (although it’s a lot cheaper) as 81 percent of students who start at community college believe they will eventually earn a bachelor’s degree but in fact only 12 percent do.

These college graduation percentages highlight an important topic. Whenever you’re examining specific colleges, you should always evaluate the school’s graduation rate. Higher percentages are better, of course. If a college you’re considering has a relatively lower graduation percentage, inquire and investigate why. Is it because of a lack of on-campus housing and nearby affordable rentals? Is it because the college accepts students who are having trouble staying on track? Is it because students are uninspired by the overall education and experience they are having once on campus for a period of time?

According to a Chronicle of Higher Education analysis of U.S. Department of Education graduation rate data, overall private nonprofit colleges have a six-year graduation rate of 66 percent, public colleges graduated about 59 percent while for-profit colleges lagged far behind, graduating just 21 percent of their first-time, full-time students within six years. As another point of reference, Table 1-1gives a short list of the ten private (non-profit), public, and for-profit colleges with the highest six-year graduation rates.

TABLE 1-1Colleges with best six-year graduation rates

Now, I must point out here something that may seem obvious. These high graduation rates, especially at the traditional non-profit colleges, shouldn’t be viewed in isolation and don’t, in and of themselves, necessarily tell you much about the educational quality of the school. Or stated another way, the schools on these lists don’t deserve all the credit for these high graduation rates! After all, these schools (at least the non-profit ones) are some of the most selective in the country so there’s a so-called selection bias going on here. These colleges only take well-prepared, high achieving students and the vast majority of these students come from families that highly value this type of educational experience. And, because these more selective colleges have so many applicants, they generally have plenty of more affluent families that can afford the high-ticket price and can afford to keep their kids in college for the duration of the four years. So, of course these students are more likely to succeed at completing college and graduating in a timely fashion.