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In 18 Years, A College Degree Could Cost About $500,000 ( 374

An anonymous reader shares a report: People worried about college affordability today can at least take this to heart: it could get much, much worse. Tuition has been rising by about 6% annually, according to investment management company Vanguard. At this rate, when babies born today are turning 18, a year of higher education at a private school -- including tuition, fees, and room and board -- will cost more than $120,000, Vanguard said. Public colleges could average out to $54,000 a year. That means without financial aid, the sticker price of a four-year college degree for children born today could reach half a million dollars at private schools, and a quarter million at public ones. That's for a family with one kid; those with more could be facing a bill that reaches seven figures.
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In 18 Years, A College Degree Could Cost About $500,000

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  • Worth Every Penny... (Score:2, Interesting)

    by Anonymous Coward

    ...If you go to college for the right reason (knowledge).

    If you're going there for a job, you're in the wrong place. If you're going there for money, you're REALLY in the wrong place.

    Guess what institution has the highest publicly paid individuals in every single state? Keep using college for something other than education, and they'll keep using YOU.

    • If you don't mind paying it off for half the rest of your life.

    • There is nothing that college can teach you that can't be learned on the internet for free. Every syllabus, every textbook, every lecture, every lab exercise... already at your finger tips. You are paying a college to provide certification of knowledge, not the knowledge itself.
      • And almost every HR department in the country will throw away your resume if you lack that certification.

    • ...If you go to college for the right reason (knowledge).

      The problem with this bullshit is we soon won't need just a reason. We'll need 500,000 of them. And 30 years to pay for it.

      Personally, I hope the entire concept of paying an "institution" a fucking obscene amount of money for knowledge is what truly becomes obsolete.

  • by olsmeister ( 1488789 ) on Monday March 20, 2017 @10:08AM (#54072935)
    $500,000 invested wisely into a moderately aggressive portfolio at age 18 would make you extremely wealthy at retirement age. Why waste it on a college education that may or may not get you a job, and even if it does it will likely never earn you as much money as the original cost invested wisely?
    • Re: (Score:2, Informative)

      by Anonymous Coward

      but the typical student isn't taking a lump sum of $500,000 and paying off the education immediately at 18 years old. He/she is going into debt with loans, and doesn't have half a million to spend on either education or a stock portfolio at that age.

      • by DarkOx ( 621550 ) on Monday March 20, 2017 @11:11AM (#54073465) Journal

        This is what subsidized guaranteed loans get you! It does not get you "access for all" it gets you steadily rising costs divorced from the rest of the market and inflation until even the state can't afford to "make college affordable." We are seeing the same crap going on in health care.

        The simple fact there is high percentage of people who if at 18 years of age with no assets are allowed to borrow 1/2 a million even at 2 or 3 percent APR, will never be able to return the principle let alone settle the debt. This uncontrolled cost structure will simply bankrupt our state and federal student loan programs.

        Quite honestly if someone at 18 could borrow a 1/2 million I would probably be better advice to lever in on capital investing in the form of stock portfolio than for education.

        The ONLY answer is to eliminate loan subsidies and force colleges to deliver an suitable education product at a price people can afford.

    • by Big Hairy Ian ( 1155547 ) on Monday March 20, 2017 @10:18AM (#54073001)
      Get a degree in Robotics & Automation and in 25 years you'll be the only person with a job :D
    • by TWX ( 665546 )

      Because between 18 and 65 you have to eat and have to put a roof over your head?

  • by jbf ( 30261 ) on Monday March 20, 2017 @10:08AM (#54072939)

    This is a ridiculous extrapolation; doing the same to health care costs means that health care and education will each be several hundred percent of our GDP in 18 years.

    The cost of education is driven by the federal student loan program, the expansion of middle management, and the development of luxury dorms and gyms. I think it's transparent that such costs cannot continue to expand at the same rate for the next 18 years.

    • by Sun ( 104778 )

      Where are the mod points when I need them?

      Yes. This exactly.

    • People like to look at a trend and project it must continue forever.
    • by toonces33 ( 841696 ) on Monday March 20, 2017 @10:22AM (#54073041)

      Federal loans are a small part of it. Many educational loans are private loans. And guess what - you can't discharge them in bankruptcy, so the lenders have very little incentive to not throw money at you.

      Some of it was caused by Mom&Dad being able to take out cheap home equity loans on their homes. The crash in 2008 kind of brought some of that to an end.

      A lot of schools have gotten into "amenity wars". To attract students, they build ever fancier dorms and facilities. And yes, it does attract, but at a cost. As long as there is no pushback from the potential students that the costs are too high, schools will continue to act like this.

      And finally, not every student pays sticker price. Many pay far less than that - it depends on family income.

      • loans are guaranteed by the Federal government, the same government that works in tandem with the Federal Reserve Bank to create money out of thin air. Half a million in 18 years? Sure, why not, maybe sooner. In the free market the cost of education is falling, technology allows for cheaper ways to communicate and test knowledge. In the government world costs never go down, that's not good for the government for costs to go down.

    • If they just raise minimum wage to $15K/hour that should cover a good education for everyone.

    • I suspect administration is the biggest factor here, at least assuming trends in the US have been anything like those here in the UK.

      I still get the quarterly newsletter from my old college (usually accompanied by requests for donations of varying subtlety). What's been clear looking at these over the years is just how sharply the size of the administration function has increased since I was there. I did a quick and dirty estimate around 12 months ago, provoked by a particularly aggressive thrust of the beg

    • This is a ridiculous extrapolation; doing the same to health care costs means that health care and education will each be several hundred percent of our GDP in 18 years.

      The cost of education is driven by the federal student loan program, the expansion of middle management, and the development of luxury dorms and gyms. I think it's transparent that such costs cannot continue to expand at the same rate for the next 18 years.

      Unless we find a way to get insurance companies out of health care it probably will cost more than our GDP to pay for health care each year. We will become ever greater in debt.

  • wrong conclusion (Score:3, Insightful)

    by ganjadude ( 952775 ) on Monday March 20, 2017 @10:12AM (#54072971) Homepage

    That means without financial aid, the sticker price of a four-year college degree for children born today could reach half a million dollars at private schools, and a quarter million at public ones. That's for a family with one kid; those with more could be facing a bill that reaches seven figures.

    This writer comes to the wrong conclusion. the rise in costs is related to the financial aid given.

    the more money the state guarantees that colleges will get paid (regardless on if its students are successful or drop out) is what causes the costs to rise.

    the solution is not even more money from the state (and the people via taxes) but to get the government out of it completely and allow the market to self correct

    • the solution is not even more money from the state (and the people via taxes) but to get the government out of it completely and allow the market to self correct

      But if they get rid of easy debt, then how are they going to be able to keep producing miseducated youths with no skills applicable to the real world that live out their lives as debt slaves?

    • Re:wrong conclusion (Score:5, Interesting)

      by Shados ( 741919 ) on Monday March 20, 2017 @10:25AM (#54073071)

      Bingo. These are the kind of things where people are incredibly short sighted.

      "Omg, college is too expensive. We must help EVERYONE afford it!!".

      Except that like anything else, if you give 100% of the population X amount of money for a specific resource, the price of that resource now goes up by X.

      Then afterward we get the "omg, people are in do much debt, we should bail them out!". It's like, you caused this.

      I refuse to think politicians did not know it would go that way. This was just a result of the US political system. Since "free college" was not going to swing (because lol US), they just did "college via loans", followed by "think of our indebted graduates!", which is essentially the same thing, but more underhanded (and expensive).

    • Agreed (Score:5, Insightful)

      by Anonymous Coward on Monday March 20, 2017 @10:37AM (#54073163)

      College costs are soaring for the same reason that health care costs are soaring: because the system is neither capitalist or socialist, but a combination of the two. When you combine the two, you don't get the best of both worlds as people assume; in reality, you get the worst of both worlds. Without even stating which system I personally favor, I propose that the two systems are incompatible.

    • because 538 [] says you're wrong, and they have sources. College started going up massively in the 90s when Clinton started cutting federal funds and shoot up like crazy when the Bush cuts hit.
  • by Anonymous Coward

    Everyone seems to want to tackle this from the wrong end, with some nebulous plan to pay for peoples tuition. That doesn't solve anything, it just shifts the cost burden. I'd love to see an in depth study done on WHY universities continue to increase costs.

    I suspect (and my bias is obvious here) that a significant part of the increase comes from spending on athletic programs (a local university here just spent close to $10m on a new athletics complex, which was only half funded by donations and alumni - so

    • Another source is the massive increase in the number of people employed as "Administrators" by colleges and universities. They used to hire students to help push the paper around. Not so much anymore.

      Also deans and other high-level administrators are being paid salaries comparable to private-sector C_Os, when they used to be paid far less.

  • A few skills, such as software engineering, can be already acquired 100% online. In two decades, VR will make majority of high education possible to acquire without human labor, or with help of professors from parts of the world with low cost of living. At this point, we will probably just fund the remaining costs like we do for K-12 schools.

    Oh sure, ultra rich will keep their private colleges with dorms, football teams and fraternities. These things will just be understood to have nothing to do with educat

    • by ledow ( 319597 ) on Monday March 20, 2017 @10:43AM (#54073205) Homepage

      I think you misunderstand education.

      Putting a bunch of people in VR-space with all the resources in the world generally teaches them nothing. Otherwise we wouldn't need universities, you'd just rent the books from the library and then pay the exam boards to sit your degree.

      Aside from the lectures, which are just by-rote education that could be replaced, you have to assess, understand, inspire, assist and generally be useful to the students. That's why the biggest expensive of education is generally staffing. Those Dr's, PhD's, Professors, etc. don't come cheap, and their time in teaching is limited (you buy them off by making them teach in exchange for being provided facilities and funding for their research).

      Given that, it's a human-hungry industry, resources are secondary. Almost all universities today publish their entire courses online, with all the materials and all the coursework. They were doing it when I did a degree almost 20 years ago (back then it was all on the FTP server, which everyone had a login to and quite a lot was available publicly).

      And you can't just assign twice as many students to the same staff, you would need to hire more staff, who all need to be educated too.

      If you think that any part of education is about providing reading material and then letting kids and/or adults just get on with it, you severely misunderstand how the world works.

      In fact, if anything, all those dorms, teams and frats are the anti-thesis of education and likely the first thing to go. No other country does the last two with any seriousness, for instance. You don't get to Oxford just because you're a decent rower.

      If anything, education's future is firmly in being available offline. Sure, you can do online degrees, but they are held in contempt for the most part. The online parts are secondary to the whole purpose and who's going to pay more than the bare minimum for them to reprint last year's PDF just to sit an online degree that's worthless?

      You can modernise it - providing video streams to an lecturer or assistant for one-to-one sessions, but you don't need less people, actually you need more to do that.

  • The cost increases come down to a few things:

    1. An explosion in admin staff.
    2. A resort-like building and activity culture.
    3. A guaranteed flow of a lot of income via student loans.

    People leaving college with $100k in debt is already becoming a serious problem and the prospects are dismal for many majors. Political support is already turning slowly against universities and their culture for these reasons. If it gets to the point where $100k in debt is normal, you can expect a few things...

    1. The states will

    • by swb ( 14022 )

      If #3 happens, it will be a race-related claim initially and not be relief granted to the general population.

      I think the easier solution is to lower the bar for bankruptcy discharge of student loan debt or imposed reductions during bankruptcy.

      The devil will be in the details to keep it from becoming abused, but if lenders face increased risks on debt discharge they will end up loaning less money and force educational institutions to figure out how to charge less.

      Who knows, maybe lenders could consider takin

  • by bobbied ( 2522392 ) on Monday March 20, 2017 @10:37AM (#54073165)

    That a gallon of milk will run you about $20 and a tank of gas is $500...

    BTW, College tuition is only really going wacko because the government stepped in and made student loans so easy to get. I know of folks a decade ago who were borrowing money to go to school taking the maximum allowed while living at home. They blew all the extra money on lavish vacations and other junk and are now, faced with a mountain of unnecessary debt for college degrees of minimal value. Criminal justice and business administration just doesn't pay that well. Making college money easy to get makes tuition go up, but it doesn't always make people better educated.

    • That a gallon of milk will run you about $20 and a tank of gas is $500...

      The 6% annual increase in tuition costs was clearly outlined, and we know that milk and gas have both not followed that rate of increase.

      I'd say they DID tell you. Right there. In TFS.

    • Citation needed (Score:5, Informative)

      by rsilvergun ( 571051 ) on Monday March 20, 2017 @12:03PM (#54074041)
      538 [] says you're wrong.
      • BTW, College tuition is only really going wacko because the government stepped in and made student loans so easy to get.

        538 [] says you're wrong.

        Did you even read the article you cited? Here's a fun excerpt (emphasis mine):

        "Among for-profit institutions, it is much more difficult to pin down a reason for tuition increases, though recent research suggests that one big cause is the generosity of federal student aid : Some institutions may be raising tuition in order to capture as much government-backed money as possible."

  • I think that something far more likely is a collapse of the college education system in the US.

    All of my kids will be/are going to community college or state schools. Unless you are rich, a private school is laughably out of the question these days.

    - Necron69

  • by blind biker ( 1066130 ) on Monday March 20, 2017 @10:46AM (#54073231) Journal

    In the meantime, in the rest of the civilized world, higher education is free or essentially free (and we have single-payer healthcare).

    • In the USA if you do want the level of education and environment that you get for free in much of the rest of the world that is also free or essentially free. It is that people don't want that type of education experience they want the American experience and the cost that goes with it.
  • by nbritton ( 823086 ) on Monday March 20, 2017 @10:47AM (#54073237)

    This makes sense if you adjust for inflation using the PCI index instead of the CPI. Using the PCI, the average household income in today's dollars of a family from the mid 1950s is close to $250k a year. This means that if you are making $50k a year today, you are only actually making about 1/5th of what your forebears did. This is why you can't afford college, this is why you have no retirment savings, this is why you and your spouse have to work, and this is why you live pay check to pay check.

    We're basically getting paid slave wages, and the masters in charge have created a system of laws to prevent us from ever taking up arms to rise up... we're fucked. Watch the movie "In Time" if you want to get a glimpse into the world you've been born into, when watching the movie just replace their plot concept of "Time credits" with money and it all makes sense.

  • At this rate, a college degree will only be for those who have parents in that top 1%. Even if financial aid is willing to cover such costly amounts, then these students would be in debt for the rest of their lives. Also, if only the top 1% could afford college degrees, could a company that only hires people with at least a four-year degree be classified as discrimination of the middle and lower class? If someone wants to be a network admin for a large corporation, then pursuing Cisco certifications woul

  • The economics of universities is horribly broken. The federal government has been providing easy money to Universities via student loans. Universities are bureaucracies and like any bureaucracy will simply grow to spend the money available. The University of Texas' bureaucracy has grown to be 1 administrator for every 7 students. The faculty:student ratio is 18:1! So there are more than twice as many administrators as faculty. The square footage of the university has also doubled in the last 30 years
  • by nealric ( 3647765 ) on Monday March 20, 2017 @11:00AM (#54073353)

    Even the author must recognize that a 4% real increases in college costs (after 2% inflation) cannot continue indefinitely. If that were the case, a state school that currently costs $10,000 annually would cost $500,000 annually by 2117 in today's dollars, while a private school would be a cool 2.5 million in today's dollars! Clearly, the market would correct before such a scenario ever came to pass. Even debt-funded bubbles hit a breaking point.

    So the question is, how close are we to that breaking point where consumers lose their willingness to pay? I think for some less-regarded private schools, that breaking point has already been hit. Some second-tier private schools with very high tuitions have started to suffer declining enrollments. However, I think we are a long way from it with most public schools. It's also worth noting that a big driver of public school tuition inflation has been declining state support. Public support for public institutions probably won't go below zero, so there is a limit to how long those increases can be driven by declining public support.

    • I've already heard of smaller private schools starting to fold, but yes, I think the correction will occur once enough people start to check on the expected salary of their dream job versus the tuition. It didn't really occur to me to confirm when I enrolled, but I went to a state school so my tuition was a car payment. When my children are deciding to enroll in college or trade school we'll definitely want to compare the cost/benefit if the bubble hasn't popped yet. On the research side of college finan
  • Around here, you can do two years in a community college and transfer all the credits to a bunch of decent 4 year state schools.

    In the end, you get the same 4 year degree as everyone else - while saving a boat load of money.

    Sure, mom and dad don't get to put an Ivy League sticker on their car, and Mary and Johnny may have to live at home and commute to the college - but that's what the smart money does.

    Stop paying for country clubs for your little crotch fruit.

    • The most elite Ivy League schools are essentially free to middle class students. Several of them have explicit no-loan policies for students from families making less than a very generous threshold (over $100,000 in most cases). Those who pay full freight generally aren't suffering for it. So if those country clubs will let you in, you'd be a fool to turn them down.
      • by Bob the Super Hamste ( 1152367 ) on Monday March 20, 2017 @02:29PM (#54075705) Homepage
        I have a cousin who went to one of those schools (Brandeis) a few years back for his degree in economics. His parents (a teacher and a physical therapist) didn't pay a dime. I didn't know about theses schools' policies towards qualified but middle class people until I asked his parents how they could afford it as ~$50k per year is a huge chunk of their post tax income. This cousin is 18 years younger than I am so I was curious because I have young kids and wanted to know what school cost so I knew how screwed I was going to be. That said it looks like the 4 options for getting a college education are:
        1. Be rich so money doesn't matter
        2. Join the US military and potentially get shot at
        3. Get accepted to an elite school and be subsidized by #1
        4. Milk community colleges and high school post secondary programs for as much as you can and work your ass off to pay for a state school
        5. Go into hock for the rest of your life

        For #2 there are some really good ways to manipulate that system that I have found out from some of my military (current and former) friends and their hate of the young double butters. For the biggest benefit become an Eagle Scout first (gets you promoted higher right out of basic ahead of the others who joined with you), join the guard/reserves at age 17, then get into college and go ROTC. When you start ROTC you will likely get promoted again in the reserves/guard at this point as well putting you ahead of your peers. You then get your commission at age 22 but you already have ~5 years of military experience but with all that other stuff you won't be an O1 so would be an O2 (first lieutenant) or more likely an O3 (captain). You then have to put in I believe 6 years as an officer if a commission is available, because you already have 5 years experience you will move way a head in the line. By the time you finish you commission you will now have about 11 years into the military so why not go the extra 9 and get a full officer's pension at age 37. Also the military will pay for college while you are in so you can continue to work on more advanced degrees for free. Toss in the tuition and stipend that you are paid for school as well as your military pay for that time and it is a pretty good deal if you don't have to go get shot at the first few years.
  • The banks and schools have no skin in the game if they did then.

    No more rip off text books that change all the time to kill resale.

    No more Professors ripping pages out of text books to force you buy new ones or you fail as they wrote it and they get $ per sale.

    No more dorms that cost way more to live with a roommate then RENTING on you own year round.

    Less filler and fluff classes.

    No more swim tests that you have to pay for!

    No more forced gym classes for all students that cost more for 1 class then getting a

  • The European Model (Score:5, Interesting)

    by Opportunist ( 166417 ) on Monday March 20, 2017 @11:36AM (#54073745)

    We turned it into yet another social contract. It's free/cheap to study over here. My whole university career has cost less than 5 grand. Including books and all. Well, I'm paying for it now. A sizable portion of my tax actually goes towards our schools and universities. Not only my tax, anyone's actually.

    And that's just fine if you ask me.

    What this entails is a lot. First, there is no risk involved in studying. There is no problem if you can't finish for some reason. If you make it, great, you'll earn more money and pay more tax that way. If you don't, well, so be it. No potential college debt looming overhead that you could only dream of repaying if you don't make it. Which in turn means that more students are starting and our universities can (and do) eliminate brutally anyone who isn't among the best. Those degrees actually mean something.

    It's also much easier for me now to pay the price of my degree. Yes, a sizable portion of my paycheck goes to education. But I can easily afford it. Now that I have a pretty good job, in part certainly due to my degree. I couldn't even think of paying anything close to that as a student, and if I thought that I would have to pay that, I very likely would not have risked it altogether.

    All in all I will most likely have paid about those 500k for my degree by the time I retire. That's ok, though, in a US model I probably would not have had the chance to study at all.

  • Tuition costs have been rising faster than inflation as State budgets look to shore up unbalanced budgets and slash education funding. This moves the cost of education from the State to the student. In the '80's (ad before) States covered 80% of tuition costs leaving 20% on students. Those ratios have flipped today and students now shoulder 80% of the cost of education increasing the cost to the student. The OVERALL cost to educate a student has decreased due to efficiency, automation and technology. T
  • 1) When ever talking about numbers you need several points of comparison.
    For example, let's say a college education really does end up costing $500,000 in 18 years - but the average salary for a high school teacher is $400,000. It's called inflation, and you need to account for it.

    2) The rate fo growth is currently high in part because of the attempt to raise stated prices in order to pay for discounted admissions for more students. The basic idea is to charge the wealthier people as much as the marke

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