College For Your Kids? Hand Over (Almost) Half A Million
The Article: FUTURE SHOCK: College for today’s newborns could cost as much as $422K by Ashley Kindergan in The Daily.
The Text: New moms and dads with visions of Ivy League degrees dancing in their heads should be prepared to face a bill of $422,320 in today’s dollars if Junior heads off to one the country’s priciest colleges as a member of the class of 2034.
If college costs keep rising as they have for the last three decades, the inflation-adjusted price of four years of tuition alone will more than double at private colleges and nearly triple at public universities by the time a baby born this year is ready to enroll, an analysis by The Daily shows.
Even after adjusting for inflation, college tuition has increased by an average of 3.5 percent a year at private schools and 4.5 percent a year at public schools, the analysis showed. When room and board are factored in, the total cost of college has gone up by an average of 3.08 percent a year at private schools and 2.96 percent at public schools.
At those rates, the median price of a year of tuition, fees, room and board at one of the country’s top 10 most expensive private colleges, as ranked last year by Forbes magazine, would shoot from $56,658 to $110,432 by 2034 — the year a baby born this year would graduate — assuming that costs rise at the same average annual growth rate that has prevailed at private colleges as a group for the last 30 years.
The Daily analyzed historical, inflation-adjusted price data from the College Board to see what a bachelor’s degree might cost the class of 2034 in 2011 dollars. The result: Total tuition and fees would top $232,000 for an average-priced four-year private college and nearly $81,000 at an average-priced public university — up 111 percent and 167 percent, respectively, from the average class of 2012 tuition.
Room and board brings the average price of a four-year college education up to a projected $288,000 in 2011 dollars for four years beginning in 2030 at an average private school and $123,000 at an average public school. The class of 2012 paid about $149,195 for a private school and $64,591 at a public university, according to College Board data.
“It’s been pretty dramatic,” said Jane Wellman, executive director of the Delta Cost Project. Public schools in particular, she said, have been relying increasingly heavily on tuition compared to other sources of revenue, such as endowments or state aid.
The estimated cost of average-priced schools is daunting, but the predictions get truly terrifying at the priciest colleges. A year’s tuition at Sarah Lawrence College, named this year’s most expensive four-year institution by Forbes magazine, would balloon by 2030 to $87,400 a year measured in 2011 dollars from the current $45,212, assuming tuition rises at the same average annual growth rate that has prevailed at private colleges as a group for the last 30 years.
Blue-chip colleges in the same price ballpark include the University of Chicago, Columbia University and Georgetown University, according to Forbes.
The skyrocketing costs of college wouldn’t be so bad if family incomes had increased apace. But in real terms, the incomes of families with at least one child under age 18 have grown only about 1 percent since 1987, according to census data.
“For whatever constellation of reasons, college prices are going up significantly faster than family income,” said Timothy McDonough, a spokesman for the American Council on Education, which represents college and university presidents and chancellors. “If you’re a median-income family, you have a perception that you’re falling behind, and you’re right.”
There is some good news: many students and families don’t pay sticker price. The average advertised annual tuition this year was $8,240 at a public school and $28,500 at a private school — but students and families only paid about $2,490 and $12,970, respectively, according to College Board data.
The net price of college, or what families pay after federal grants and other financial aid, has risen more slowly than total costs. Inflation-adjusted net prices for tuition, room and board rose by about 44 percent at public universities, while total prices grew 67 percent between the 1996-1997 school year and the 2011-2012 year, College Board data shows. At private colleges, net prices rose by 26 percent, while total costs increased by about 46 percent.
Still, tuition is onerous enough that rising levels of student debt were a major rallying cry for the Occupy Wall Street movement last year. The average 2010 college graduate who borrowed money for school graduated with $22,000 in debt from a public school and $28,100 in debt from a private school.
The numbers bewilder new parents.
“I’m not sure how we’re going to do it,” said Laura Moore, a mother of a 1-year-old and a 5-year-old in Seguin, Texas, who was the first in her family to go to college and wants her children to go, too. “Financing it all is not something I can even fathom.”
Ilene Dillhyon, of Charlotte, N.C., said she and her husband are using a 529 plan, a state-run savings program that allows parents to purchase future tuition credits and sometimes room and board, for their children’s education. When her first child was born in 2000, the monthly fee was about $89. For her second child, born in 2002, it was about $104. She and her husband are expecting a third child, and the going rate is now close to $300.
“When my husband and I went to college, we came out with quite a bit of debt … This is not what we want for our children,” Dillhyon said. “The number of $81,000 [for the class of 2034 at a public school] scares me to death.”
