Everything You Need to Know about College Tuition
Around a decade or so ago, the cost of attending college made obtaining a degree more advantageous in the market. Today a surge in demand, an increase in financial aid, and lack of state funding have skyrocketed college fees to bizarre figures. In fact, attending college in the U.S today has become so expensive that the cost, whether net or sticker, has gone up to the point that many students believe they cannot afford it. Well, the big question you are perhaps struggling to answer is where does tuition fee go? Do you know what your money pays for? In this article, we break the numbers down for you.
A breakdown of how college tuition fee is utilized
Before we delve further, you must keep in mind that college tuition fee figures vary from one college to another. What you will pay for in Colgate university will not be the same at UCLA. Therefore, to get a general understanding of what your college tuition pays for, we used data from the United States Department of Education about colleges and universities. However, these figures are always too detailed and contain other costs that don’t directly relate to your expense.
Let’s bring this home by showing you how $100 of your tuition money is spent. For starters, you should know that $61.46 of the $100 you pay goes directly to the cost of your education. Before we look at where the balance goes, here is how the $61.46 is utilized from the highest to the lowest expense:
- Salaries: $15.81
- Building, facilities, and academic: $11.47
- Auxiliary Student Enterprises: $9.61
- Academic support like libraries, museums: $8.26
- Institutional Support: $8.15
- Student Services, like admission, registrar, and student activities: $4.75
- Grants and Financial Aid: $3.41
You might be wondering why research fees, health care charges that you pay for aren’t reflected in the above category. Well, those expenses account for the remaining $38.54 of your $100. Most of the expenses in this category are outside the traditional classroom experience, otherwise referred to as indirect costs. Below is a breakdown of this:
- Hospitals and Healthcare: $15.58
- Research: $11.66
- Other, Including Taxes and Liabilities: $6.25
- Public Services $4.52
- $0.53 – Independent Operations
Private and Public College Tuition; is there a difference in cost?
You might know that there is a vast difference in the cost of tuition fees between private and public colleges. For instance, according to the College Board report, full-time students attending an in-state school pay an average of $21,950 per year for tuition, fees, room, and board. Their peers in private colleges pay up to $49,870 for the same services. Relatively high, right?
While many factors contribute to the difference in costs, two things stand out. One is the cost per class in a private college, and two is the government support public colleges get. To explain the former, students in public colleges pay $36 per class, while those in private pay $125; a difference of $89 is very high and inarguably explains the high costs in private colleges.
What’s perhaps interesting is that if you are in a private college then you are paying more for salaries, instructional expenses, institutional support and administration. All these alone amount to $14000 in a private institution compared to public colleges.
That said, what does the future hold? Do we expect to see college getting even more expensive?
The Future College Tuition Trends
Again, the past two decades have seen a drastic rise in the amount of college fee paid by students. A lot of that pain is now felt by the students and families. That is perhaps why it is easy to point fingers at the government and administrators in the sector. Frankly, the trend is even more complex and beyond that. It has a lot to do with the economy and the demand for college education.
In matters economy and demand, for example, the Federal Funds Rate has lowered rates, meaning ideally students can access credit. So one reason why the fees are up is that many “can now afford it!”
There is also that aspect of costs of running college institutions. In other words, it has grown more expensive to run education institutions over the past two decades or so. Demand has a factor in this. Yes, the ripple effect is that the institutions have to create nice rec & service centers, research programs, etc. It is hard to predict the future but so far, what we know is that there is a push for transparency in college tuition fees. The changing education trends is also expected to have an impact on what you will pay in future. For example, college education is shifting online which might change college tuition fees for better or even worse!
You might expect that online college programs will be cheaper but that isn’t necessarily true! Now, digital learning comes with hidden costs that the face-to-face counterparts might not have to incur. One of them is in expensive course designs tailored for the new types of engagements, even before a new student enrolls. Marketing the programs is also quite expensive. Moreover, there is the cost of running the programs keeping in mind that there are added overhead costs. College institutions need extra personnel like data analysts, designers, developers, and the likes to support their instructional services.
Judging by these, we expect that the cost of college tuition might not go down in the near future. But only time will tell!
Hopefully, this breakdown helps you understand a few, if not most, things about college fees. However, keep in mind that these figures are different for every institution. Therefore, before you make a choice on the college you wish to attend, take some time to do some research to establish the actual cost of what you will be expected to pay.