Caught in the Trap: How Skyrocketing College Tuition is Crippling Students’ Futures
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.
STYRON’S INTRODUCTION
Caught in the Trap: How Skyrocketing College Tuition is Crippling Students’ Futures
Many of my friends and family members whose children attended college have encountered mixed outcomes, with some succeeding and some dropping out. I LOVE celebrating success stories such as Christopher Cannon, Tony Kea, Amanda Powers, Marlow and Mathew Hicks, and many others who have accomplished great things.
I worry about the younger generation facing mounting college loan debt. Many failed to earn a degree, or worse, graduated with an almost meaningless piece of paper that yields jobs paying less than Amazon warehouse employees. I respect the hard-working Amazon employees, as the majority did not waste thousands on college loans!
Eighteen and Vulnerable: How Universities are Taking Advantage of Financially Illiterate Students with Exorbitant Tuition Fees
Eighteen-year-olds make life-or-death decisions when they join the military and bravely serve our country, and I sincerely thank them for their service. Others, unfortunately, make lifelong crippling financial decisions due to college loans.
The below table summarizes the annual percentage increase in college tuition versus median household income in the United States over the past 20 years. The column on the right shows the difference in tuition increase minus median household income increases. A positive number indicates tuition exceeded household income increases. In the worse year, it was exceeded by almost nine percent.
The Unaffordable Dream: How Universities Prey on 18-Year-Olds with Soaring Tuition Costs
| Year | Public Four-Year Tuition Increase (Beyond Inflation) | Private Four-Year Tuition Increase (Beyond Inflation) | Median Household Income Increase | Difference (Tuition – Income) |
| 2003 | 6.1% | 4.0% | 3.4% | 2.7% |
| 2004 | 9.1% | 5.6% | 2.8% | 6.3% |
| 2005 | 7.9% | 5.0% | 1.1% | 6.8% |
| 2006 | 6.4% | 4.4% | 0.9% | 5.5% |
| 2007 | 5.2% | 4.1% | 1.3% | 3.9% |
| 2008 | 5.7% | 4.5% | -0.2% | 6.0% |
| 2009 | 5.5% | 4.4% | -1.5% | 7.0% |
| 2010 | 5.5% | 4.3% | -2.3% | 7.8% |
| 2011 | 7.0% | 4.5% | -1.7% | 8.7% |
| 2012 | 4.5% | 3.8% | 1.8% | 2.7% |
| 2013 | 2.9% | 3.8% | 0.9% | 2.0% |
| 2014 | 2.9% | 3.7% | 1.8% | 1.1% |
| 2015 | 3.4% | 3.4% | 4.4% | -1.0% |
| 2016 | 2.4% | 3.4% | 5.2% | -2.8% |
| 2017 | 2.4% | 3.4% | 2.4% | 0.0% |
| 2018 | 2.8% | 3.3% | 1.8% | 1.0% |
| 2019 | 2.3% | 3.2% | 2.3% | 0.0% |
| 2020 | 1.1% | 2.1% | 6.8% | -5.7% |
| 2021 | 1.5% | 2.3% | -2.9% | 4.4% |
| Avg. | 4.4% | 3.9% | 1.7% | 2.6% |
Sixteen years ago, I didn’t listen when my mom questioned my student loans. I wish I had. Written by Kelly Burch; edited by Avril Ayers
“I still remember the sadness on my mom’s face as she shook her head and walked out of my childhood bedroom. She was trying, yet again, to talk to me about the cost of college. And I, yet again, was stubbornly refusing to even have the conversation. As she shut the door, I stared out the window as silent tears of frustration fell.
During that moment, I knew that I was making a mistake not listening to my mom. And yet I was terrified that if I heard her arguments for choosing a cheaper state school or even community college, I would have to be honest with myself and admit that she might be right. I wasn’t ready for that.
Sixteen years later, I’m an adult who is still paying off student loans. I wish I could go back to tell my high school self to at least give my mother a chance, and to tell her to keep pushing for a conversation she knew was important.
As a first-generation college student, I thought I knew better than my parents
In my junior year of high school, my classmates started considering whether to apply to their parent’s alma maters, but I was trying to educate my parents about the whole college process. My goal was to get in — I would worry about paying for it later.
At my elite private high school, success in college admissions was defined in a very narrow view: acceptance to a narrow selection of A-list universities. Other schools that were competitive but not top-tier were deemed safeties, and everyone knew that safety meant settling.
Since my family had no experience with college, I took that definition at face value. When I was waitlisted at my dream school and forced to settle for my safety, I was devastated.
I shouldn’t have been. The college I went to has a great reputation and beautiful campus in a bustling city. But all of that was under the cloud of feeling like I had lost something I felt like I deserved: a trip to my dream school. Looking back, I was acting entitled and frankly bratty. My mom may have even told me that at one point, and I no doubt deserved it. But I wasn’t willing to shift my perspective.
My mom urged my to consider more affordable options, but I refused
As senior year wrapped up and we faced the steep bills for my first semester, my mom begged me to consider the financial cost. She tried to talk me into exploring state schools. She attempted to mention community college, but she might as well have told me to go flip burgers. Sensing she was getting nowhere, she told me to think about commuting and living at home.
That suggestion was fully feasible. I could have taken a train ride to campus every day and saved tens of thousands on the cost of room and board. I also could have considered living with a relative in the city as a sort of compromise, but I wouldn’t hear of anything but dorm life.
With distance, I can see that I was desperately clinging to what my high school had told me I needed. I didn’t have the self-confidence to take a truthful look at the financial implications of the decision I felt that I had to make.
Instead, I took out a massive private student loan for just one year. When I signed the paperwork, I gasped at the projection of how much I would pay over the life of the loan. Instead of pausing on that number, however, I told myself it must have been a mistake and I signed on the line without investigating further.
If I could do it all over again, I’d be happy saving money
Today, I’m nearly 34, closer to the age my mom was back then than to my college-bound self. Now, I can see just how wrong I was. I’m still paying off that student loan, and I know decades of payments have affected my financial security.
I can’t fully say that I regret choosing an expensive college or living in the dorms. Given the chance to do it over, I would probably find ways to reduce my student loans. For example, I’d consider living at home (which I did during my third and final year of university). But had I chosen that route, I probably would have wondered “what if” about living on campus.
I do wish I had been more open to the conversation. My mom knew a lot more than I realized back then, and she had my best interest at heart. It’s frustrating to have your dreams trimmed by finances, but it’s also reality. As an adult I live within my means, but as a high school senior I refused to see that I should choose a college within my means too. If I had listened to that advice, I would have saved myself thousands.”
TO READ ABOVE ARTICLE CLICK BELOW LINK
https://www.businessinsider.com/personal-finance/didnt-listen-mom-questioned-my-student-loans-2023-4
STYRON’S CONCLUSION
The issue of mounting college loan debt is a pressing concern for parents and students. Unfortunately, this problem seems to be worsening, and the proposed solution of transferring the burden onto hardworking taxpayers is unethical.
While it is crucial to address this problem, we must also question why the cost of tuition has risen so drastically compared to increases in income. Purdue University’s success in holding tuition flat for over a decade demonstrates that there are alternative solutions that could be adopted by other state universities. It is time for policymakers to explore innovative solutions prioritizing affordability and accessibility for all students rather than shifting the burden onto hard-working taxpayers, of which 63% do NOT have a college degree.
One final personal lesson- Moms are normally right! Cut the unearned arrogance and listen! I wish I had more often!
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I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an N.C. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
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