One of the compensations of growing older is the ability to see things in a different context and test the promise of long-held truisms against actual performance. Here’s an old chestnut from my long-ago youth about college costs: “A four-year degree at a state university is about the same as the cost of a new Chevy.”
I think that it must have included room and board back then, but it’s an interesting thought. I bought a brand-new 1975 Chevy Vega for $2,736. That sounds pretty cheap now, but it felt differently at the time. (The average annual income in the U.S. was $8,630 in 1975, but I wasn’t making it. Cars were a lot less durable, too – especially the Vega.)
Also using 1975 averages, a student could get away with spending $433 a year for tuition and fees at an average state college, or $2,272 per year for a private school. Thirty years later, the average public college or university was costing an average of $5,491 per year and the average private school cost $21,235. With costs rising more quickly than inflation, a year at UW-Madison for 2011-2012 will be well over $9,000 for tuition and fees for a Wisconsin resident student. Toss in a place to call home with associated living expenses and the estimated annual costs run a bit over $20,000. That’s more like a loaded E-class Mercedes-Benz after four years, or buying a modest Chevy every year. (To make matters worse, plenty of students don’t finish those “four-year” degrees in four years and so they end up paying for a victory lap.
These kinds of cost are having an impact. Last year for the first time ever, total student loan debt outpaced total credit card debt in the U.S. According to the Federal Reserve, consumers trimmed their collective outstanding credit card balances to a total of $826 billion by last June, down from a peak of nearly $976 billion in September 2008. Meanwhile, outstanding student loan debt is estimated to exceed $880 billion. The average student graduating with a four-year degree is carrying $24,000 in student loan debt (which is around the base price of a new Chevy Impala.)
The problem is not only that costs have gone up more quickly than incomes, but that a greater proportion of those rising costs has been loaded into tuition. State and local funding for higher education dropped by $2.8 billion nationally in the 2008-09 fiscal year as enrollment at state colleges and universities increased by more than 350,000 students, according to a report compiled by the State Higher Education Executive Officers. Closer to home, the governor’s proposal for the upcoming state budget cuts $250 million from the UW System over the biennium. The last time that kind of budget cut was absorbed within the UW, tuition went up by double-digit percentages. While that kind of bump isn’t likely in the immediate future, the upward pressure on tuition and fees remains very high.
This is not to say a solid college education it isn’t worth the price, because clearly it is. Graduates have significantly higher average incomes – to the tune of around $400 a week more — and far lower unemployment rates than people without post-secondary education. This doesn’t even consider job satisfaction and many other aspects of life that are greatly enhanced through the knowledge, skills, insight, experience and associations acquired in their college years.
Still, even good deals have to be paid for and financial aid doesn’t make it all go away.
Over the past several weeks, you’ve probably noticed cards around the campus comparing the financial impact of a first-year student at UW-Marathon County transferring to another UW System school after only one year instead of spending that second year here. It’s stark. A year at UWMC including tuition, fees and the residence hall comes to $8,763 (or $4,548 without the residence hall, which is the case for most our students.) Head to UW-Stevens Point and the cost jumps to $13,815 (or $8,055 without the residence hall.) Thinking about taking that second year at UW-Madison? Again, it will cost nearly twice as much as doing it at UWMC, with no meal plan and an empty refrigerator.
Costs like that can really extend the Ramen noodle period of your life.
So a generation after my initial personal experiences with college expenses and cars, we had kids of our own to think about. “Spend your first two years at UWMC and I’ll give you a car, because you’ll get a great education and financially, it’s a wash,” I begged. Our daughter graduated from Wausau East in 2002, UWMC in 2004 and from UWSP in 2006. And she is still driving that Chevy Tracker.
Jim Rosenberg is the Adult Student Initiative Recruiter for the University of Wisconsin-Marathon County.