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The Price of Admission: How to Make a College Education More Affordable

The cost of a college education continues to increase, as states cut funding for higher education and universities hike the price of tuition. Meanwhile, students are applying to more schools than ever before in the hopes of getting the best financial-aid package that they can to deflect the brunt of soaring college costs.

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During a January 2015 visitors’ information session at Santa Clara University, assistant admissions director Megan Red Shirt-Shaw asked a group of parents to look out the window: The sun illuminated the mission-style architecture and the blowing palm trees on the manicured lawns of California’s oldest institute of higher education.

Five years ago, attending Santa Clara cost $47,400 for tuition, fees, room and board, and the same view of those blowing palm trees. For the 2014–2015 school year, Santa Clara cost $58,000. The 23 percent price increase wasn’t much of a deterrent: Applications to Santa Clara doubled over that time. The school’s acceptance rate dropped for the fall 2014 term to just below 50 percent, which is considered to be the threshold for placing schools into the prized “highly competitive” category, according to Barron’s Profile of American Colleges.

The average cost of tuition, fees, and room and board at a 4-year private college or university for the 2014–2015 school year was $42,419. Average is the operative word.

During the 2014–2015 academic year, not one school among the top 100 most expensive colleges in the country had a total annual price that was below $56,000. In the 2010–2011 academic year, only one private U.S. college—Sarah Lawrence College in Bronxville, N.Y.—charged more than $55,000 per year for tuition, fees, and room and board.  

Meanwhile, the cost of attending a 4-year public college or university increased by about 3 percent in the past academic year, according to College Board, which is an association of educational institutions that helps connect students to colleges. The cost of attendance for out-of-state students now averages $32,762.

In the past 5 years, the average cost of earning a bachelor’s degree rose by 10 percent at private colleges and universities and by 17 percent at public colleges and universities, according to College Board. Both percentages are higher than the rate of inflation over the past 5 years of 7.6 percent.

Average incomes increased slowly over the past 5 years, to $44,888 per year in 2013, according to the most recent data that were available from Social Security Administration. Federal Reserve reports that family income remains flat or below prerecession levels for all but those Americans who are among the highest 10 percent of earners.

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Increasing costs at colleges and universities is an old story, but we don’t see any end to higher prices on the horizon. Experts tell us that universities do little to contain their costs, and state legislators and governors across the country continue to cut spending for higher education. It isn’t just tuition that’s increasing. Experts say colleges also are hiking fees on everything from student activities to using the library.

Richard Vedder, who is the director of Center for College Affordability and Productivity, sees troubling signs for smaller schools.

“Colleges are finding themselves starting to price themselves out of the market in some cases,” Vedder says. “Schools with marginal reputations are finding it very difficult to maintain enrollment as prices rise.”

However, for elite schools that can fill their classes two times over with highly qualified applicants or for public colleges and universities that have had their state budgets slashed, no economic pressure to change their pricing strategy exists at this time, says Anthony Carnevale, who is the director of Georgetown University Center on Education and the Workforce, which studies the labor market.

“College is, at best, third in line” behind health care and public primary/secondary schools when it comes to federal and state budgets, Carnevale says. In other words, politicians won’t lose any votes or sleep over allowing families to continue to pay their way to college out of pocket.

“It sets up a situation where the government can’t afford higher ed, higher ed can’t afford higher ed and the students can’t afford higher ed,” Carnevale says. “There’s a lot of irony in this. We know that college is a good thing in general, but we can’t afford it.”

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