Increasing Cost of College Tuition

Increasing Cost of College Tuition

Executive Summary

Financing a college education is getting tougher. College costs have

skyrocketed over the past decade or so. Average tuition at four-year colleges will increase 7 percent this school year, double the rate of inflation. Student aid is not increasing fast enough to plug the growing gap between tuition and family finances. In addition, there are a growing number of older students entering college today. In the new global economy, it is important that the government provides funding towards post-secondary education. In particular, the government should focus on the funding that would reduce tuition costs. With the current levels of funding received from the government, students are forced to pay high tuition costs. Upon graduating from universities and colleges, these students are stuck with thousands of dollars in debt. The current cost of tuition is making post-secondary education altogether unattainable for many individuals. Without a post-secondary education, many employment opportunities are unavailable, limiting an individual's potential. According to U.S. Census Bureau statistics, people with a bachelor's degree earn over 70 percent more on average than those with only a high school diploma. Over a lifetime, the gap in earning potential between a high school diploma and a B.A. (or higher) is more than $1,000,000. Whatever sacrifices you make for a college education in the short term are more than repaid in the long term.

Problem Statement

How are the students affected and how may it affect schools, why is tuition increasing and what are the colleges doing with the revenues they receive? Students are affected by this increase because they are forced to take out larger loans, work full time or may even have to take fewer classes. Receiving a college education today is somewhat a must. Majority of the high paying jobs require either a degree or a minimum of five years of experience. There are little to none entry level position available in the economy. But however, if the price of college continues to grow eventually the demand for an education will decrease.

Objectives

The main objective of this essay is to educate those who are attending a college or university or who maybe sometime in the future. Provide information that is pertinent to individuals planning to attend college, helping them to realize that although college tuition will increase over time, there is still ways to afford the high cost of college.

Methodology

The methods used in gathering information for this essay include:

World Wide Web

MS Word

MS Encarta 94

US Census Bureau

MS Excel

Discussion of Results

The cost of higher education varies by type of institution. Tuition is highest at private 4-year institutions, and lowest at public 2-year institutions. The private 4-year colleges nearly quadrupled their average tuition rates between 1975 and 1996. For private 4-year colleges, tuition and fees for the 1995-96 academic year averaged about $15,400, compared with about $5006 at public 4-year colleges. The cost of attending an institution of higher education includes not only tuition and fees, however, but also books and supplies, transportation, personal expenses and, sometimes, room and board. Although tuition and fees generally are substantially lower at public institutions than at private ones, the other student costs are about the same. According to MS-Encarta94,"the average cost for tuition, fees, and room and board for the 1995-96 academic years at private 4-year colleges was about $20,165. At public 4-year colleges the average combined cost was about $9290" (Encarta94). The cost of attending Webster University is approximately $1125 per class taken. This does not include room and board, or books, and supplies. Still, $1125 is a lot of dollars for an unemployed family man or woman with little or no income. Institutional aid constitutes about half of all grant aid received by students. After adjusting for inflation, institutional grants have doubled over the past decade. About 25 percent of full-time undergraduate students enrolled in public colleges and universities and 60 percent at private institutions receive institutional grant aid. However, as is the case for state grants, a quarter of which are now non-need-based, the proportion of institutional grant aid being

awarded to the lowest-income students is declining. Though the cost of living is not directly related to tuition it is still a major player in the decision making process. Is it possible to maintain a family financial structure while paying for an education? The cost of a mortgage, or rent, and other bills that are associated with living adds up to many thousands of dollars per year. These costs in addition to what the tuition, books, and supplies total are expected, and have to be dealt with. The financial burden alone can seem over-whelming to some. There's no escaping the fact that college costs are rising. According

to recently released reports from the College Board, most students and their families can expect to pay, on average, from $167 to $1,132 more than last year for this year's tuition and fees, depending on the type of college. However, there is more financial aid available than ever before -- over $122 billion. And, despite all of these college cost increases, a college education remains an affordable choice for most families. In 2003-04, the amount the average student actually paid for a public four-year institution, after receiving grant aid and education tax benefits, was about $1,300 per student. After adjusting for inflation, this is less than students paid a decade earlier. While data on student aid levels for the current academic year are not yet available, this year's increase in tuition almost certainly increased the average net price. At four-year public institutions, tuition and fees average $487 more than last year ($5,132 vs. $4,645, a 10.5

percent increase). Based on last year's financial aid levels the average

student at a four-year public institution pays about $1,800 after an estimated $3,300 in grant aid and tax benefits are considered. At two-year public institutions, tuition and fees average $167 more than