They say insanity is doing the same thing over and over again while expecting a different result, and every year, that’s exactly what students attending private universities do.
We pour out our savings and take out loans because it’s what we need to do to attend highly ranked schools, and when the audacious price for another year is released to the public, we gape at the new figure in disbelief.
You could say that college tuition is driving us insane.
Lehigh recently announced that the total cost of attendance for the 2019-2020 school year will be $69,650. It’s ridiculously steep, but if you look at the trends and weigh the cost of the university’s ambitious Path to Prominence plan, it’s not so surprising after all.
But is it worth it?
If you’re attending Lehigh, or any other private university, you should be asking this question. At the very least you should be pondering what aspects of your college education are most valuable and what aspects you could do without.
Would an online course be satisfactory in place of a traditional one? Is the rise of studying abroad and exchange students altering the global workforce? Does Greek life have a future on college campuses? Is it better to select a major based on an institution, or an institution based on an intended major or program?
I know, it’s a bit overwhelming to juggle all of these factors at once. But now that I’m a second-semester senior, I have a lot more time on my hands to weigh these fundamental inquiries. That’s why I’m bringing this column to you with curated deep-dives into issues that affect Lehigh and the greater educational community.
And now that you’ve made it this far in the article, you must have enough time on your hands to come along for the ride.
In the rest of this first installment, I want to introduce you to the surprisingly simple economics that drive the system I’ll be investigating moving forward.
Shouldn’t people stop attending college because it is so expensive?
On the contrary, I found out that the net value of a college degree has been rising when my microeconomics professor broke it down my sophomore year. Having a college degree is becoming such an advantage in how one is assessed entering the job market that it hardly matters how much you pay — your future earnings will eventually pay you back mid-career.
According to a 2016 report from College Board, the break-even age is 31 years old after attending four years at a public or private nonprofit institution with a typical amount of aid.
In fact, in the same report — which, by the way, reads a lot like a self-fulfilling prophecy and is literally entitled “Education Pays” — it’s revealed that for the average adult aged 25 or over, having a bachelor’s degree alone represents a $24,600, or 67 percent, advantage in earnings compared to stopping at a high school diploma.
There is undoubtedly incentive to go to college. The only question becomes how anyone outside the upper class is supposed to afford it.
And before I get to the terrors of loans, there’s a lesser-known phenomenon that needs to be out in the open: In 2018, 45 percent of private undergraduate tuition went toward financial aid.
By definition, private universities are price discriminating.
In a hypothetical group of four students, if just one of them can afford to pay Lehigh’s almost $70,000 price tag, it can distribute more than $10,000 to each of the others. It’s a Robin Hood effect.
On the surface I’m in favor of this redistribution to ensure education for the masses, but in practice, it gives colleges the green light to keep raising costs until their wealthiest attendants can no longer afford it.
I’m especially skeptical because we see colleges take similar advantage of traditional aid avenues as well —governmental loans, grants and tax credits that help students cover their payments.
Because private colleges know that government funds will continue to increase when college costs go up, it’s a never ending cycle.
And yes, that leads to major debt. Even if loans aren’t the main way to finance college, we’re growing the total cost so much that the average 2016 graduate emerged $37,000 in debt.
In summation, private universities are like hagglers who charge a child $50 for a yo-yo because they know they’ll tell their parents they need it and there’s an ATM next door. Except we’re not talking about a yo-yo — people actually need an education.
It’s screwed up, and that’s just the economics of it. I can’t wait to go more into the actual substance behind this essential-yet-torturous system in future articles.
Of course, solutions are complicated and you should be wary of anyone who tells you they have a quick fix for college education, but you should be in the business of brainstorming answers and holding the institutions accountable who drive us insane and see no push-back from the market.
I’d like to redefine insanity from the perspective of decision makers at private universities as the process of exploiting over and over again while expecting no burden of guilt because you’ve gotten away with it.
That’s what we’re up against.