Is college still worth the cost of attending? With their earning potential rapidly plummeting what are graduates to do with their debt? Tuition costs are only the beginning. Anyone with a degree in art, design, architecture, or illustration knows that the costs of tuition are not always the scariest part; it’s trying to find the money to pay for supplies. Supplies are the part of an art student’s education that sky rockets out of control most and that most student loans don't cover. Personal loans from private financial institutions do but those have significantly higher interest rates and require payments while students are in school. So how do you make those payments? Get a full-time job so you can handle living expenses too. Don't worry though you still only need to maintain a 3.8 GPA to keep what little tuition assistance the school provides.
For more than two decades, colleges and universities across the country have been jacking up tuition at a faster rate than costs have risen on any other major product or service - four times faster than the overall inflation rate and faster even than increases in the price of gasoline or health care (see the chart to the right). The result: After adjusting for financial aid, the amount families pay for college has skyrocketed 439% since 1982.
Granted, the fact that college costs are spiraling wildly out of control is not exactly a news flash. The real eye-opener is why.
College finance experts point to a record number of applicants in recent years as the baby boomlet comes of age (many of the more selective schools reported double-digit increases for 2008); that trend, coupled with growing demand for degrees (undergraduate enrollment has jumped more than 20% over the past decade), puts heavy upward pressure on prices. Dwindling support for higher education from cash-strapped federal and state governments doesn't help the situation.
Normal supply and demand can't begin to explain cost increases of this magnitude, though. If the usual rules applied, tuition would eventually stop rising because families would cut back enrollment, especially at the most expensive private schools, just as they curtailed consumption of gas once prices hit $4 a gallon.
Instead, prices for college have begun to follow their own peculiar logic. In the absence of any objective measure of the value of an education, price becomes the default yardstick. The more expensive a college is, the better the education it presumably provides. (After all, if other families were willing to pay this much to send their kids here, it must be worth it.)
And the better the education is presumed to be, the higher the price the college can charge. In that respect, it's like home values during the housing boom or dotcom stocks during the late-'90s tech frenzy: Prices go up on sheer momentum." By Penelope Wang, Money Magazine senior writer
Read the rest of the article here:http://money.cnn.com/2008/08/20/pf/college/college_price.moneymag/index.htm
