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The High Cost of College Education Today

College education costs have soared in recent years and for many it seems as if these costs are getting to the point where the affordability of college is becoming out of reach. To give you a recent example: the annual tuition at Harvard for 2014 was $45,278. Now we are talking here about college tuition alone, not about the books, lab expenses, food and, of course, housing expenses that can quickly add up. To give you a proper perspective, the Harvard tuition in 2014 was 17 times the cost of tuition in 1972 which if we just did an annual increase based on inflation, the tuition would be a little over $15,000.

From 2000 through 2008, the average college tuition for a four year public college rose 48% and a four year private college rose 21%. During this same period interest on savings went from 6.5% to 2.00%. Starting in 2008 through 2014 the average tuition rose 28% for public and 16% for private. During this time period interest rates on savings accounts went from 4.5% to .025%.

A graduation hat sitting on top of scattered $100 bills.

Based on expanding college administrations, college tuition will continue to increase at a rate of about two times the rate of inflation. As college costs increase, families have had to go deeper into debt to make up the difference. Student loan debt is currently around $100 billion a year mainly through an industry of private and publicly funded student loan programs resulting in the average student owing in excess of $42,000 upon graduation with a four year degree.

Rising costs of college tuition aren’t what you might believe them to be associated with. The relative cost of instruction and delivering an education have been relatively stable. Two of the largest costs are attributed to the expanding administrations of many college campuses and we are not talking about the salaries of the professors here as they have had very little growth. We are talking about the layers and layers of support personnel that add to the overall size of the college administration. Second to the administration are coaching salaries of the colleges. Athletics, especially football and basketball are not only big sports for a university, they are big business. The coaching salaries for many colleges have reached unbelievable proportions and in many cases rival that of the professional coaches. A recent case in point is Notre Dame when they fired their head Football coach in the early 2000’s. Due to many golden parachute contracts related to this area the fired coach continued to collect $2 million dollars for an additional five years after he was fired. Add on to that what the current coach was collecting which we can only assume was at least $2 million per year, collectively the University spent somewhere between $4 – 5 million a year for five years on two football coaches. Makes you wonder how many students could have been helped if only 1 coach was being paid and the remainder was used to pay college tuition costs for deserving students. Athletics is big business and colleges know this, after all, professional sports owns one day of the week.

Many students and their families are trapped in this big money game and choose to pursue higher education in the hopes that by doing so they will be able to get a higher paying career. Unfortunately, since the Federal Reserve stepped in with the financial bailout in 2010 and created virtually zero interest rate, growth has substantially slowed and college graduates find themselves disillusioned in their career and income prospects and in many cases cannot get the jobs they need. Many decide instead to pursue graduate degrees and hope that the economy and job outlook improves in the near future. Regrettably they end up taking on more student loan debt and put additional financial pressure on themselves.

Access Free Financial EducationThe solution…you can avoid this college debt rollercoaster by understanding all that is available to you in the form of college financial aid. Billions in Free College Money goes unclaimed every year and you have the ability to claim some of this unused money. You and your family can and should utilize successful methods that other students and their families have used to avoid, reduce or eliminate all their student debt upon graduation.

The key is to get educated as to ALL of your financial options as a student getting ready to go to college. There are many programs and strategies that are available to you and your family so that you do not become part of this $100 billion student debt issue. Imagine what it would be like to go to the school of your choice, enjoy your school years without the weight and concern of the financial costs, and at graduation have the satisfaction of knowing that you owe no one for your college education. What a difference to start out on your career debt free. Many students and their families do just this. They get educated on the process, act in a timely manner and get rewarded. Are you ready to get started?

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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