<p>"According to The College Board®, the average 2010-2011 tuition increase was 4.5 percent at private colleges, and 7.9 percent at public universities. The ten-year historical rate of increase is approximately 6 percent. These figures are substantially higher than the general inflation rate. They are also higher than the average increase in personal incomes."</p>
<p>"In the two years after the recession officially ended in June 2009, the median household income continued to plummet, dropping by more than $3,500 to $49,909. That represents a decline of 6.7% in the first two years of the recovery, more than twice the rate of decline experienced during the recession."</p>
<p>College tuition has gone up while median incomes are down 10% over the last four years.</p>
<p>I am amazed that college tuition keeps increasing faster than income.</p>
<p>Thanks DStark. I have a sophomore in college and a high school senior. At least I still have my job for now, but certainly no raises in sight and probable take aways in the near future. Yikes!</p>
<p>This discrepancy between the cost of attending college and income has to stop sometime, bogney…maybe you will get lucky with your younger teenager.:)</p>
<p>Increased demand for post-secondary education and less government subsidy of public schools due to budget problems => it is not a surprise that cost of attending a university increases. (That does not mean that it is a good situation for students and parents.)</p>
<p>“I am amazed that college tuition keeps increasing faster than income.”</p>
<p>Why? No residential four-year college expects parents to pay for college out of current income, but out of past income (savings) or future income (paid for with loans, repaid with future inflated dollars). This is indeed a problem for the median undergraduate student who is 24.8 years old, and paying for it herself (I used the feminine pronoun because women are the clear majority). But top 20%ers have experienced asset growth.</p>
<p>I think prestige college tuitions are WAY too low, as evidenced by continuing increases in number of applicants, and no changes in yields. If tuitions were higher, there would be more in the way of funds for middle-income ($43k-67k) students. But then most prestige colleges don’t want them - there is more prestige to be gained in rejecting highly intelligent public school students than in accepting them.</p>
<p>The big public universities are only getting a fraction of their incomes from undergraduate tuitions (you can make A LOT with a law school). It’s the students who are trying to make it at community colleges who are really suffering.</p>
<p>Econ 101, my cyber-friend dstark. Colleges raise tuition because they can. It’s a simple matter of supply and demand. Don’t forget that many private colleges are comprised of ~65% full pay students. Prior to determining that incomes of $180k were deserving of need-based aid, HYP was ~50% full pay. What’s a 6% increase to those making $200k/year?</p>
<p>While the “middle and lower class” (however defined) in the US may be hurting, there are still plenty of wealthy internationals happy to pay full freight. </p>
<p>While the costs of the instate publics are increasing – Cal Berkeley COA = $33k – other states still offer pretty good deals. U-Arizona, for example, even offers numerous scholarships + Ipad to OOS. Instate, it’s only $22k, and practically free for those with top stats.</p>
<p>Will college tuition $$ be the next “bubble” to burst? I think it might. It costs more to get a college education here than in any other county in the world. Is the education most students receive worth that much more ? As countries such as China and India build more U’s for their own populations, and as the chances of admission to elite US colleges approach 1-2% for most students, I think a tipping point may be soon be reached. Either that, or mini is right, tuition costs will continue to rise, and a college education will revert to being something that only the truly wealthy can afford.</p>
<p>Sewanee, a school my daughter is interested in, reduced their annual tuition by close to 10k to try to draw more applicants. I do hope that a shrinking pool of people who can pay may cause some more to the opposite direction.</p>
<p>Lesser known private schools are probably going to be the first ones to experience downward tuition pressure as more students become unwilling to pay private school tuition for a school that is not elite or near-elite, at least in perception.</p>
<p>"U-Arizona, for example, even offers numerous scholarships + Ipad to OOS. Instate, it’s only $22k, and practically free for those with top stats. " That “practically free” stuff in AZ ends in 2013.</p>
<p>So long as the government subsidizes the loans, there will be tremendous upward pressure on tuition. There should be some counter pressure soon with the dramatic loss of home equity and the drop in income and employment.</p>
<p>The original post conflates current dollar and real (inflation adjusted) changes. College tuitions are going up in current dollar terms. The article about declining median household income refers to real or inflation adjusted incomes. This doesn’t eliminate the gap, but does reduce the gap significantly.</p>
<p>Private colleges do not set their tuition levels relative to median household income. List prices are referenced more to household income at the 80% or 90% percentile. With the widening income gap in this country, household incomes in the upper quintile or upper decline have been going up much more rapidly than the median, and college probably remains similarly affordable (or unaffordable) for those in the upper 10 or 20% of the income distribution. Most private colleges do not expect the median household to be able to pay list price.</p>
<p>Just because colleges are not for profit does not mean that they do not try to be revenue maximizers. Extra revenue can be used for lots of things that college managements like - plusher facilities, more faculty, higher salaries, more staff. Some of these things have strong educational value, others more questionable. But in the end, colleges have a strong incentive to get as much revenue as possible from their students. If having a high list price, paid in full by 50% of the student body, produces more revenue - even with generous financial aid (AKA discounting) for the middle class and low income groups, then that is the way colleges will go.</p>
<p>For the time being, the market test says this is a winning strategy. For high quality institutions there are many more applicants, or customers, than the colleges can accommodate. Until that changes, it is hard to see much change in the behavior of college tuition.</p>
<p>@ucbalumnus, yes, but even the less-selective publics in many states are seeing dramatic tuition and fee increases, due to cutbacks in public funding. </p>
<h1>8…Sewanee isn’t a lessor known University where I come from. They offer full scholarships for top students, I know people who graduated from there who have gone on to get Phd’s and be leaders in their fields. The school is gorgeous, I believe they have some excellent sports programs, and a land size to rival Stanford. The negative I have heard about the school is that it has a strong drinking culture, and there may be a religious component. It is also a Southern school, with all that applies.</h1>
<p>My concern with the rising COA (let’s not forget that comprehensive fees and R&B tend to go up every year too) at the publics is that it comes at a time when many states have slashed their student aid programs. This does not bode well for the lower-income students who were already experiencing higher than average indebtedness and lower graduation rates. These students represent a significant portion of the total enrollment at many of the 4-year publics, as evidenced by the number of Pell recipients reported. The glimmer of hope that the very popular second Pell grant program offered turned out to be too short-lived to make much of an impact in turning the tide for the lower-middle income students.</p>
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<p>I believe this is a myth. Studies done over the past several decades have concluded that the availability of government loans has not been a factor in rising college costs. Federal student loan caps have not increased in recent years.</p>
<p>“Econ 101, my cyber-friend dstark. Colleges raise tuition because they can. It’s a simple matter of supply and demand”</p>
<p>:)</p>
<p>That’s what used to be said about tech stocks and housing…</p>
<p>I like menloparkmom’s post number 7…</p>
<p>When it becomes very obvious that graduates are having trouble paying back loans, future students might pause a little bit about taking on debt to go to college.
If students and their families decide the debt isn’t worth it…I guess then college costs will stop increasing at rates higher than inflation.</p>
<p>Adding some risk to creditors of student loans might make loans harder to get and this would limit the increases of college costs. </p>
<p>It’s not like families are just paying cash for college…</p>
<p>(I’m not talking about elite colleges…where there is a shortage of places compared to demand …econ 101. For example, I don’t think Harvard has to worry).</p>
<p>I agree with posters that are concerned about middle and lower class kids…</p>
<p>Not too sure about this one…the HEPI has been tracking higher than the CPI for decades. The biggest contributors lately have been facility related - rising costs in utilities is not something that most colleges can control (with the exception perhaps of those who are investing in biomass/co-gen systems) - and employee benefits. I don’t think many schools WANT to raise tuition every year, but having expensive facilities that are heavily used and partially residential, combined with a “product” that is comprised almost completely of labor is not going to track well in comparison. Additionally, if the size of the student body shrinks due to lower birth rates in the current and upcoming cohorts, schools that are already having difficulty in achieving full enrollment are going to be between the proverbial rock and hard place when it comes to limiting cost increases.</p>