Rising Tuitions are Keeping Many Students Out of College - Essay Example

Rising Tuitions are Keeping Many Out of College Rising tuitions are definitely keeping more out of college than ever before. In looking at the documented raises in tuition over the past twenty years, wages have not kept pace. This means the burden on the family will be proportionately higher. In addition, financial aid grants cover less than before, leaving the balance to be covered by loans. Prospective students see their money buying less, and that a college degree no longer guarantees a good paying job. Only the jobs at the top have shown substantial rises in income, and these include expensive university professors with tenure. Students and their families are unwilling to shoulder the responsibility of graduating with a huge debt over their heads. Too many college graduates are working in lower paying jobs. Since the report commissioned by President Clinton in 1999, it is apparent that not all raises in college tuition are directly in response to increased cost. Some institutions perceive the extension of financial aid as an inducement to raise their tuition. In addition, the tuition is no longer carved in stone, as most universities offer scholarships to accepted students, thereby reducing the cost. The better quality they perceive the student, the higher the scholarship will be. This allows them to filter out some applicants in preference for others. “Posted tuition and fees do not represent actual transaction prices, since they serve the same purpose as "sticker prices" on automobiles. For the analysis that follows, "tuition" refers to posted tuition, fees, and room and board charges per student. Net tuition per student is equal to posted tuition less the average scholarship awarded to a student at the institution. Net tuition is the most accurate measure of the transaction price available, since it is the actual price paid by the average student at each institution. (Martin) “ Because this is not widely understood, it has become a deterrent to many applicants. Costs rise for many reasons, not the least of which is the high cost of attracting the top professors, and paying tenured professors. In addition, the institutions get their support from a number of different sources, including private grants and endowments. In times of less private support, many institutions seek to shift the burden to government in light of increased government support. Every rise in government support in the past has been accompanied by rising costs in higher education, whether it was by increased tuition, added fees for other services or increased costs of living. (Ehrenberg 1997) Ehrenberg sees this less than open practice as detrimental to the survival of a quality higher education program in the United States. These kinds of fears are not far off the mark. Prospective students may not know the entire story, nor may they understand that their actual cost may not be as stated. However, the real fear is that a college degree will not be cost effective in the long run. Students and their families see far too many college graduates working in lower paying jobs these days, since industry has chosen to reward the top people far more in proportion to those below them. College graduates have not been targets for unionization in the past, except in certain areas, so many of these white collar jobs are not subject to collective bargaining. Business stars claim unrealistically high wages, bonuses and perks while middle managers and ordinary working people wind up with much less. When students fresh out of high school or their parents see these top executives taking down millions per year, it actually becomes discouraging, since the wages for new graduates have not kept pace with inflation and the top jobs usually require Masters degrees, adding to the perceived burden on students who wish to become successful. These proportionately lower wages for new graduates are further eroded by the higher cost of living, including higher education costs for themselves and their children. This makes a baccalaureate degree worth far less in the market unless it is from a prestige university, which is out of the reach of middle income students of only average or slightly above average intelligence. Government financial aid covered far more in grants in the past than they do now. Grants only cover about 40% of the cost with grants for public institutions and sometimes only 20% for private ones. (Schwartz, Melissa 2004) According to IHEP President Jamie Merisotis, "When you look at the tuition levels and the net price, which is basically the tuition minus any grantage, the net price is increasing faster in public institutions for both the low-income and middle-income students. Its a more complicated picture in the private institutions.... Part of the reason for this is because they pour more of their own money back into financial aid and scholarships." (Hickey) This puts a tremendous burden on students after graduation. Often their debt burden is more than 10% of their income from their first job. Of course, this is the biggest factor affecting the decision of whether or not to go to college. In the light of fewer services, larger classes and the degradation of the value of a college degree, many students are unwilling to incur high debt when they do not expect it to lead directly to a high paying job. Many factors contribute to the lessening value of college degrees (in spite of the rising cost), including the perception that degrees can now be almost “purchased” by paying high tuition costs. In fact, some universities have raised costs and lowered standards in an effort to attract students with money, reasoning (rightly so) that a motivated student will get a good education in any institution. Even though it is accepted that more and more jobs require college degrees, the value of those degrees has been eroded by both the lower standards and the higher number of graduates. High school diplomas underwent much the same transformation. In 1950 a high school diploma was not required for many jobs, but highly valued. In light of pressures by families and changes in the education system, the value of a high school education has been eroded considerably. The value of two year associate degrees and four years degrees have fallen in parallel, partly due to the pressures of higher demand. Another factor which must be considered is the relative value of liberal arts or other less technical degrees. While most HR managers will agree that their best managers have a broad educational background, even in IT, they still shop for new employees with more technical degrees targeted at their industry. This is because management jobs are more an more acquired by lateral promotion. That is, people do not stay in the same companies any more like they used to. Managers gain promotions by simply getting a better job at another company. Since the highest paying jobs are in technical trades or management, liberal arts degrees are thus worth less upon graduation, since experience counts for more. Of course the final reason that fewer students will be able to go to college is that tuition always outpaces inflation. This cuts out many middle and low income families, especially if there is more than one child. (Sahadi, Jeannie 2004-5) With the average tuition at state universities hovering around $20,000 - $30,000 per year, and books, lodging and food etc. increasing that cost, even with 40% grant coverage, the student or family must pay upwards of $5000-$30,000 per year per student. This adds up quickly to a debt load of $20,000-$120,000 per student. With the entry level jobs for new graduates starting at $20,000 per year, the debt load is unrealistic for average income families with average students. Sahadi also mentions that medical costs, according to Ehrenberg, are partly responsible for the rise in college tuitions. (Sahadi, Jeannie 2004-5) These same costs can be cited as responsible for the perception by prospective students that the baccalaureate from most institutions is not as valuable as its cost. They see entry level workers struggling with high insurance costs or doing without adequate insurance and wonder if it is really worth it. Their own families may be underinsured or not insured at all. While the rising costs of college tuition are due to a number of different factors, the result is that fewer think they can afford it, especially since degrees from non-prestige universities or less technical degrees are simply not valued as in the past. Grant used to cover far more than now, so more financial aid becomes debt. Even well informed students who know their actual cost after scholarships may balk at incurring such high debt. It is a fact that tuition has far exceeded inflation and wages have not kept up for middle and low income families In light of the tremendous burden the debt load would become, many students will elect to get jobs and train as they go up the corporate ladder. Works Cited Ehrenberg, Ronald G., ed. The American University: National Treasure or Endangered Species?. Ithaca, NY: Cornell University Press, 1997. Questia. 25 Oct. 2006 . Hickey, Jennifer G. "Breaking the Bank to Go to College; Financial Aid and Household Income Arent Keeping Pace with Rising Tuition Costs, Leaving Many Students to Borrow More Money Than They Reasonably Can Afford." Insight on the News 9 Sept. 2002: 16+. Questia. 25 Oct. 2006 . Martin, Robert. "Why Tuition Costs Are Rising So Quickly." Challenge 45.4 (2002): 88+. Questia. 25 Oct. 2006 . Sahadi,Jeannie 2004-5 . 2004-05 college tuition: Movin on up CNN/Money http://money.cnn.com/2004/05/18/pf/college/tuition_increases/ Schwartz, Melissa. “Mikulski fighting to Make College Tuition More Affordable.” News from US Senator Barbara A. Mikulski 10 Mar. 2004. http://mikulski.senate.gov/record.cfm?id=218895 Washburn, Jennifer. "The Tuition Crunch: For Low-Income Students College Is Increasingly out of Reach." The Atlantic Monthly Jan.-Feb. 2004: 140. Questia. 25 Oct. 2006 . Read More