Since the year 2000, tuition at the University of Michigan has increased an average of 6.7% a year. If the average starting salary of a graduate where to have kept up with that (40,000 in the year 2000) then it would be $76,507.53/yr currently! While a college educations should allow a person to earn and save more over our lifetimes, at what cost? With the cost of tuition raising every year, and the job market struggling to add jobs, the cost of college is starting to affect the payoffs. The increasing cost of a college degree has reached a level where for some programs, student would have been better off putting all that college money under a mattress and joining the workforce.
While education is inherently good, some people may have been better off staying away if money is the metric. There are those that bristle at using money, but it is not an unreasonable measure to use. A method of valuing college attendance should be measured against not going. This study considers adults who had not attended college, and asked about their attitudes about going to college presently. The main them was the reason for going was the desire to make more money or advance their career. Even though a well-rounded education is desirable, the benefits might not justify the costs.
An article in the economist emphasizes this tradeoff. Pointing to a research firm called Payscale, highlights that the “return on 46 programs generated a return on investment worse then plunking the money in 20-year treasury bills.” 18 were negative, indicating a net loss on investment after 20 years! Shaw University, mentioned in the title of this post, had the lowest ROI, an astonishing -10.6%.
Yet there are those that say a college degree has never been more valuable. As much as I hate to agree with the former president of that school down south, he has a point that a society is dependent on its educated citizens, and that the universities themselves provide a very important function in society. And that is before you add in the ability to retire to the University’s retirement community! Education has and should continue to be a foundation of our society. We just have to figure out a way for everyone to afford a good foundation.
An increase in college tuition has contributed the most to the return on investment a college degree produces. Tuition prices have almost doubled, while salaries and benefits have remained the same. Something has to give; Tuition can’t keep rising. I think the key driver of decreasing tuition expenses will be the invention that leverages technology to create a virtual classroom as engaging as the real thing. An environment that permits interaction with the professor, yet on a scale that we see in todays online classrooms of hundreds of students.