college fees are no longer affordable

23 Feb

Despite the outcry over high college costs, tuition rates are still going up. There are plenty of schools like IIM, SP Jain, Fudan, HKUST, Princeton, Brown, Stanford and George, for example, all announced increases in the last year. Although there costs were already very high for an average citizen, raising tuition cost seems to be an annual or a regular phenomenon and not a need based program. I agree that inflation and input cost are going up at an unprecedented rate, but tuition cost have crossed beyond the average household savings.

Recently I came across a small post on the internet which read that a college in Tennessee USA, called University of the South which is better known as Sewannee will be reducing the cost to attend school by nearly 10%. Soon I was all over the internet to get a detailed analysis of what Sewannee had to offer and why it has decided to cut costs even though it was also facing higher input costs and could have gone the easy route of passing the costs to the students.

Many questions came to my mind – Is Sewannee attempting a marketing gimmick and advertising itself to students/parents by reducing tuition cost and silently increasing indirect costs? Is the quality of programs going to take a hit? Are they reducing high input cost programs and increasing class size to the lower input cost programs?

Before I can answer these questions, let’s have a closer look at how high tuition fees affects the society at large – The cost of education must include all costs and how they are financed. Students and families are almost always borrowing money (often not from friends/family and unsecure sources), so as the student goes through college the cost of tuition inadvertently increases with interest to substantially higher amount than the original principle. Even families who use their credit lines for cost are paying more than the original price. This cost of borrowing affects how a family spends which results in cut –downs and lesser savings. Now assuming that the student gets a good paying job after the college program, everything would become hunky dory soon (assuming the student pays back the borrowed money to their family from his/her earnings). But – If the student is unable to find a good job or a job which would help pay off the debt, the cycle of debt starts to restrict and burdens the family further.

Let’s take an example – Say a student gets in at College A, which costs $40,000, and College B, which costs $20,000. College A gives the student $20,000 in “scholarships” (which are handed out like candy), and College B gives the student $5,000 in “scholarships.” Thus, attending College B will now cost $20,000, and attending college B will now cost $15,000.

The student will typically pick College A, even though they’ll be paying $5,000 more per year. Why? Because they got a 50% tuition scholarship, $20,000, and at a more expensive and therefore more prestigious school. The injustice of course is that unless your parents are well-educated themselves, a family is unlikely to realize that tuition sticker prices are just a game, and won’t even apply to either of these colleges, assuming them too expensive.

Coming back to Sewannee – Through my research I realized that Sewannee was an average sized college offering many specializations and grad degrees for both tech and business streams. Although its size and ratings fall below the Ivy League; it boosts of many high-profile and high paying jobs offered to its alumni. Though Sewannee claims its quality and focus on yielding best results for students will not go down, only time can tell whether this would actually be true.

In my opinion – this is not an example that other colleges might follow, as Sewanee’s needs to stay competitive in a heated market where costs of tuition is not only depended on professors – as their salary is definitely not the reason for the steep rise but other economic and social factors like better infrastructure, better athletic facilities, higher spending on marketing and advertising.

Thus, rising tuition cost is a reality of life, where borrowing/debt is not only justified but a real need.


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