Whether one is purchasing a pack a gum or buying a house, consumer decisions are assumed to be based upon simple economics – production cost and selling price, supply and demand. “What do I get for the money,” and “is it a good deal,” are quite possibly the consumer’s two most poignant questions. Consumers equate value with cost, so one wonders what would make the decision to purchase or invest in a college education any different.
The pursuit of education and the betterment of one’s place in life by such a pursuit has been a constant of history for thousands of years. “Youths of fifth century B.C Athens . . . were impelled mainly by a desire for preference and advantage, by a felt need to acquire skills in the marketplace,” and “. . . the medieval universitas was . . . at root a professional training facility,” are two examples of this presented by historian Christopher Lucas (Lucas, 2006). The idea that education is good for its own sake is overshadowed by the fact that education has been, and still is, a means to an end - the attainment of which comes at a price.
Students, parents, and what this author believes to be the vast majority of the American public are ill-informed as to what the phrase “the cost of a college education” truly means. While the rate of increase in tuition has outpaced inflation over the last four decades (Tution Inflation, n.d.), there are other factors that affect the cost of tuition that the tax payer, John Q. Public, is either not told about regarding the financing of higher education or cares to ignore. It is the author’s intent, herein, to demystify both the presumed cost of higher education as realized by a student and the actual cost as realized by an institution of higher education.
The Cost to the Student
There are various interpretations of student cost depending upon one’s perspective or understanding of it. Some view cost as the printed price of tuition, or the sticker price. Others view student cost as the cumulative cost of all expenses involved with paying for one’s higher education. Yet others understand student cost to be the cumulative cost of all expenses for higher education less any financial aid, or the net cost, which can be confusing to some if financial aid is not clearly defined or understood.
In fact, it seems that the confusion for students and parents that often surrounds the cost of higher education lies within the terminology used to describe it. For the purposes of this paper, the following definitions for common terms will be used: Financial Aid: Subsidized and unsubsidized loans, grants, and scholarships. It should be noted that loans, subsidized or not, do not decrease the net cost of higher education, and therefore are not considered as part of its calculation. Of added interest is the feeling that factoring loans into net cost becomes a function of accessibility and not affordability.
Grants and Scholarships: Any money given, granted, or awarded to a student. This money does not have to be repaid and decreases the net cost. Higher Education: A two or four year, private or public non-profit college. Net Cost: The final out of pocket cost to the student or the student’s family. This includes tuition, fees, books and supplies, housing, and grants or scholarships. This is the true monetary outlay or purchase price of a higher education.
Tuition: The printed cost of education including any institutional and/or course fees; also
considered as the “sticker price.”
Sentiments of woe and dismay surround the financing of a higher education. The cold, hard fact is that the students’ cost of higher education is rising. Tuition costs are certainly increasing. In 2004, 37% of America’s college students were enrolled at a community college where the average full-time tuition was $1905, compared to 40% at state colleges with tuition of $4694, and 22% at private colleges where tuition averaged $19,710. These...