<p>I agree wholeheartedly with everything wis75 says. But it STILL brings me up short that, in the mid-70s, the full annual cost of sending me to a fancy residential college (tuition, room & board) was about 25% of an income at the 80th percentile nationally. Today, the same college’s sticker price would be over 60% of an 80th-percentile income (although, as a practical matter, the college would likely award significant need-based aid to a student whose family had an 80th-percentile income. i.e., about $100,000). </p>
<p>In addition, anyone in my generation knows that the subsidized college loans of that era effectively had negative real interest rates. The interest rates were below the inflation rate. Today, subsidized loans have rates significantly in excess of the inflation rate – until recently, 4% or more above it – and cover a far smaller portion of total college costs than before.</p>
<p>When my wife graduated from college, she had no job and no idea what to do, and she moved to a part of the country where she had practically no contacts. (Luckily, she didn’t have any debt, either.) But within a year she had a job – in the nonprofit world, mind you! – the annual salary of which was basically equal to what the total cost of her college education had been. A meaningful job, with a future. Our daughter is also working in the nonprofit world, at a much fancier level than her mother did at an equivalent age. She is paid well, but it’s about 40% of her college cost (and she’s four years out).</p>
<p>In other words – and I know it’s not news to anyone here – college costs far more in real terms, is much more difficult to finance, and provides much less relative benefit, than it did for students of my generation. It was far easier to appreciate the non-financial benefits of college when the financial aspects took care of themselves so handily.</p>