College Costs to Climb to Nearly a Half-Million Dollars by 2030

The rise of university education has been a centric grievance of the heavily lauded and scrutinized Occupy Wall Street movement. Socioeconomic pundits state that, at the current rate, only the financial elite will be able to attend university in the coming decades. And now, according to a recent article in The Daily, a newborn today can expect to pay nearly a half-million dollars for a private education eighteen years from now—in the year 2030. If the current rate of college tuition increases holds true, and if the past three decades are an indicator of future trends, then the prices of inflation-adjusted college tuition will double at private and triple at public universities, as analyzed by The Daily.

Inflation-adjusted college tuition has increased by 3.5 percent at private and 4.5 percent at public universities on the whole. As an example, a year’s tuition at Sarah Lawrence College, named this year’s most expensive four-year institution, would increase to $87,400 by 2030 as measured in 2011 dollars (it costs $45,212 today).

Many economists and scholars debate whether the rise in college tuition is legitimate. According to Tuition Rising: Why College Costs So Much by Ronald Ehrenberg of Cornell University, there are a myriad factors contributing to college tuition increases, not the least of which is pressure on the university to excel in all aspects of their academic endeavors.

Ehrenberg states that there is a multiplicity of cost pressures on tuition including: a winner-take-all mentality, shared governance structures, federal government policies, external university pressure, public ranking importance, and personnel and organizational structure. Although each of these categories is detailed in Ehrenberg’s report, suffice it to conclude that the cost pressures on tuition are due to synergistic combinations of the need for consistent improvement to attract the best student and faculty talent, increased demands from the federal government with decreased support, and the lack of efficiency in organizational structures coupled with the enduring need to ascend the public college ranking ladder, the latter of which so crucially affects the amount of applicants—and, by virtue, matriculating students—to a university’s incoming class.

An article on NPR’s website adds some merit to the argument of decreasing federal and local support: state governments cover less of the total tuition cost than in years past, explains Sandy Baum, a professor at George Washington University. Baum adds that as state budgets decrease in size and scope, the student’s share of paying for education increases accordingly.

If pressure is to be taken off of escalating collegiate costs, then Ehrenberg suggests that colleges and universities must grow by substitution, not by unrestricted expansion. Additionally, academic institutions should increase interdisciplinary cooperation with competitors to share resources—both administrative and academic. This, Ehrenberg suggests, can promise significant savings in a number of areas. Unfettered, the current rate of tuition increase institutions of higher learning cannot sustain current rates unscathed.

Lastly, there are some measures being taken to help students pay for education during this anemic economic climate: the U.S. Congress and the Obama administration have rolled out a number of measures to help students in danger of falling behind on their federal loan payments. Nearly a half-million students have signed up for income-based repayment, stemming from the College Cost Reduction and Access Act of 2007, which limits the amount of your income that you have to pay towards your loans.  As the economy lags on its way back up, officials say many more students could be signing up for this program while they wait for a better economic climate.

This post is based on an article that appeared in The Daily on January 9, 2012. For more information on financial aid, please visit the U.S. Government’s Website on Student Aid.