Surprise! Actual Costs of College Have Leveled Off

This one caught me by surprise.

According to a major analysis of college costs done by the College Board, the net cost of tuition, fees, room and board for the average student at a private college is pretty much the same as it was ten years ago, when adjusted for inflation.

New Picture (1)I have been hearing so many media reports about the rising cost of college and mounting student debt, that I did not expect to see this. Yet, there it is:  not only have the actual costs at private colleges leveled off, but the actual cost is far less than the “sticker” price that one gets when looking at tuition, room and board.

So, you want to get a rough idea of what the average student will actually have to pay for a private college?

Figure it to be about 57% of the published costs for tuition, fees, room and board.

How can this be?  We’ve all been inundated with story after story about the rising costs of college in recent years.  Is this report completely off base?

As I look at it, it makes sense to me.  We have to keep several things in mind.  First, college costs did increase well beyond the rate of inflation in the 1980s and 90s.  That is real.  It seems likely, though, that popular perceptions are about a decade behind reality.  We first started worrying about high costs of college in the 1990s and especially in the 2000s.  Meanwhile, it appears that the costs have stabilized (for private colleges) in the last decade but popular perception hasn’t kept up.

Second, other than health care, there is no cost that is so complicated and confusing to calculate as that of higher education.  You can’t just figure it based on the stated cost of tuition.  You have to take those costs, and calculate in grants, tax benefits (ah, our wonderful tax code!), and this mysterious thing called the “discount rate.”  But a student usually won’t know what the actual cost of a given college will be until they have applied to a college, submitted a financial aid to the government, and then received the financial aid offer back from the college.  (The last part is where the discount rate kicks in).  Most people also fail to calculate what they will save in taxes after that point.  Actual costs, then, vary from student to student.  Confusing, isn’t it?

On top of that, these are all moving targets:  tuition, discount rates, tax breaks, inflation, family income, offers by the financial aid office.  For instance, ten years ago, you could figure the actual costs of tuition, fees, room and board to be 68% of the “sticker” price, which is significantly different from the average 57% of “sticker” price today.   So, yes, sticker prices of tuition have been going up (the price that is quoted most often in reports you see) but actual costs have not.

(The next time you see a report about the rising costs of college, look to see whether the figures are based on “sticker” prices of tuition or actual costs.  Chances are, it will only give you the “sticker” price rather than the actual cost).

What a mess.  It just isn’t as easy as walking into Best Buy and comparing the costs of different HD TVs, is it?

Third, the media doesn’t always report these things very well, particularly since the system is so confusing.  And thanks to the Great Recession we’ve been battling, debt of all kinds is on our minds.  Some media handle these issues effectively and some do not.  Recently, an area newspaper featured a Malone graduate on its front page, making the point in the opening sentences that this student was $80,000 in debt.  Far down in the story, it was mentioned that the average Malone student graduated with $23,400 in debt, which is, quite frankly, a big difference.  Most students are in a very different situation than this grad and nearly 20% of Malone students do not have any debt when they graduate. But the headlines and structure of the story leave the reader with a perception that college costs are much worse than what they really are.

And let’s face it, a story about a student who leaves a private college with a debt of, say, $2500, probably is not going to attract as many readers.

At any rate, the economics of higher education is certainly a complicated and confusing system.   But this latest report from the College Board gives one reason to hope that things are actually better than what they seem.

So, if you know of anybody who is considering a private college, but is getting scared by the sticker price, encourage them to dig deeper than just the sticker price when they are figuring costs.

A Crisis in Christian Higher Education?

If you are a Christian, you really ought to think carefully about the role of Christian colleges in our society and the current economic dilemma (trilemma, actually) that they find themselves in.  I recommend that you read this open letter from Chris Gehrz, a historian at Bethel University in Minnesota.

Thoughts, anyone?





Trix Cereal or Augustine?

(This is the last post in a series of I am doing entitled “Why It Doesn’t Make Economic Sense to Run Education like a Business.”)

Trix or Augustine?  Which would be a better model for how we think about education?  I’m afraid that we too often approach education as if we were buying breakfast cereal (if we are students) or trying to sell breakfast cereal (if we are in charge of education).

Think about this.  We don’t run our family economies like a business.  And we shouldn’t.  (“Justin, that’s the third time in the last month that you forgot to clear the dishes from the table.  This has really cut into our household productivity, so we’re going to have to let you go.   But chin up, buddy.  I’m sure it won’t be long before you land on your feet with another set of parents somewhere who are in need of a nine-year old boy.”)

We don’t run our church economies like a business. (Well, most churches do not).  And we shouldn’t.  (“Here at Bob’s Discount Baptist Church, you get two sermons on John 3:16 for the price of one offering!  But wait, there’s more!  Just present this coupon to the usher and Pastor Bob will take an additional 25% off of your next altar call!”)

Hmmm. Should we follow the impulses of a silly rabbit……

We should not run our educational economies like a business, either.  The market has its place, but it will not take care of the challenges of education, just like it won’t take care of the challenges of parenting or of ministry.

And yes, there is a proper role for government, but government will not solve these problems, either.  (Insert your own joke here).  I say this because Americans tend to react to non-individualized problems by turning either to the market or to the government.  There are more than two options out there, folks.

I’m afraid, though, that I don’t have a good model for how the economics of education should work.  It would be great if a really smart economist, who understood the ways that humans behave when confronted with the dynamics of learning, would work all of this out.

My primary concern, though, is not exactly the question of how to fund education.  My bigger concern is that, socialized as we all are in deep patterns of consumerism, we carry a consumer mindset to so many aspects of our life where they don’t belong.  (See “Cereal, Trix.”).

And it is in this realm where we can find a much better model:  Augustine.

Now, I am not an expert in Augustine.  His thought can get quite complicated, but there are real riches to be found there, especially for the Christian faith.  Let me summarize and over-simplify a huge body of work here by saying that Augustine wrote that the best education is built upon gratitude, sacrifice, humility, love and true delight.  These are qualities that take us in very different directions from consumerism.

Let’s unpack these a bit.

Gratitude.  It sounds strange to say that we should be thankful for a college education when tuition costs so much.  But you can’t buy an education.  A college education is actually a gift from God, in an odd sort of way.  Not everybody has the ability to do college-level work.  Some people are more “gifted” intellectually than others.  Get it?  Furthermore, there are millions of people in this world who have the gifts to do college-level work, but do not have the opportunities to get a quality university education.  Those of us who have been given these opportunities should be grateful for them.  If we are not grateful for a college education we will feel entitled; we will think we deserve our educational opportunities and the benefits that come from it.  And entitlement is not a good thing, is it?

....or one of the great theologians in all of history?   Hmm.  Decisions, decisions.

….or the thinking one of the great theologians in all of history? Hmm. Decisions, decisions.

Sacrifice.  Ah, yes, a good education requires one to work.  That means sacrificing short-term desires like Facebook, video games, shopping, eating, hanging out, movies, or all that other stuff for the long-term good of one’s education.  Sacrifice is hard; consumerism is not.  Barlow’s Law, baby.

Humility.   The best education provokes us to admit that we do not have everything figured out.  The best education pushes us to respectfully consider the ideas of others.  The best education requires that we submit to the methodologies, theories and practices of an academic discipline.  The best education demands that we change our understanding, beliefs and practices when confronted with our own misperceptions, errors, or faulty processes.  Those are all elements of humility.  Consumerism, by contrast, puts us in charge of buying what we want.  Not much humility in that.

Love.  The best education helps us to better love God and love others.  In fact, every academic discipline, properly understood, can and should be about loving God and/or others in some way.  Education should direct us to God’s purposes for the world and a deep concern for the common good.  It is in these highest biblical commands to love that we truly find life.  Much of consumerism, as so many advertisements declare, is all about me.  And that is a distinctly un-biblical sort of way of thinking and desiring.

True delight.  When all of these things come together, we discover the true delight in learning.  We are grateful for our learning, we don’t mind the sacrifice, we embody humility and we love more completely.   Meanwhile, it’s rather odd that the happiness I experience when I buy my new iPhone lasts for….two weeks?  And the thrill is definitely gone when the newest iPhone hits the market.  Consumerism fools us into thinking we are finding true delight, but it fails to deliver.

Augustine’s principles do not just apply to students.  Teachers, professors, administrators, and anyone involved in or concerned with education should give his principles careful consideration as well.  I myself need to be reminded of these points regularly.




Is the American church dying?


(I’m interrupting my series on why we shouldn’t run education like a business because I ran into this helpful article analyzing the statistics.  Thanks to Tommy Kidd for alerting me to the article). 

You may have heard in the news sometime during the last few years  that Christianity is fading away in the United States.  These claims are made because of the rise of the number of people who claim no affiliation.  But it would be poor statistical analysis to conclude that the church in the United States is shrinking because of that data.

Take a look at this article.