College tuition at most schools increases at a rate of 4-5% every year. These days, this steady increase in cost has resulted in an enormous financial burden for middle and lower income families. To provide equal educational opportunities for these families, colleges constantly strive to augment their financial aid budget and dole out thousands of generous financial aid packages each year. Meanwhile, those who do not qualify for financial aid have to shoulder the exorbitant cost that reflects the value of possessing a college degree in today’s job market. In other words, regardless of socioeconomic status, college tuition normally represents a significant chunk of a family’s income. And despite the many hackneyed expressions about education being priceless, there is in fact a price tag on higher education—and a big one at that. This article will examine higher education from a purely financial perspective.
Many parents, teachers, and college counselors will try to motivate high school students to do well in school so they can go to college and thereby increase their opportunities in life. Others take a more relaxed approach to grades and college admissions, passively believing that their students will find their own way in life. What many parents adhering to this latter philosophy do not realize, however, is that no matter what college a student attends, he/she will be hard-pressed to acquire a quality college education for less than $200 grand, or an investment equivalent to a quaint, two-bedroom home. The chart below illustrates this investment by highlighting the costs of schools in popular collegiate areas. Of course, there are fantastic public institutions for those who wish to remain in their home-states and pay slightly less, but even these tuitions are on the rise due to heavy budget cuts in government funding. Moreover, many would argue that, even among schools that surpass the $200K benchmark, there is a wide range of quality in educational programs. This arguable reality directly undercuts the age-old wisdom, “you get what you pay for,” when it comes to college education.
But what is all of this talk about the quality of education? Shouldn’t students and parents be more concerned with finding a college that is the right fit? Of course, finding a college where your student will thrive academically and socially is of paramount importance. However, in this competitive college admissions environment, where colleges across the country are posting record-low acceptance rates, the vast majority of applicants will be rejected by the schools that would have been the best fit. Instead, because they did not quite meet the academic or extracurricular criteria to be a successful candidate (or succumbed to common pitfalls in their applications), applicants make the best of their remaining options—while their parents foot a commensurate bill.
Possibly the most important quantifiable factor that should be taken into consideration is the dividends on this major investment. In the past, a college degree generally guaranteed a job in the workforce. These days, thousands of young men and women are returning home with college degrees without a job offer in sight. Because of the economic recession, businesses are becoming far more selective about whom they choose to recruit, and applicants’ alma maters have become a primary differentiating factor in the hiring process. This increased competition for jobs has in turn influenced many students to seek out higher degrees, making graduate school admissions more competitive as well.
In an education industry that is growing more expensive and competitive each year, it can be an especially difficult task to ensure that students are both able to follow their passions in life and perform well enough in high school to give them the most and best opportunities down the road. This is why it is highly recommended to seek out advice and assistance from educational consultants, college admission counselors, test prep specialists, and anyone who can facilitate an otherwise stressful process. After all, your investment in your student’s education will be one of the most important investments you will make in your life.
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