At long last, we’ve got an answer. In about 2086, if trends continue, the average cost of college will exceed the lifetime economic benefits of attending college.
In 2086, the group projects, “tuition would total approximately $725,000 in today’s dollars, or the bargain price of $181,000 per year.” And $725,000 is the same present benefit of a college degree over a high school diploma, according to the report.
The report used the work-life earnings data of college graduates compared with earnings of high school graduates, using information from the U.S. Census. The report then used National Center For Education Statistics data “collected over the past 40 years measuring average tuition, fees, room and board in 2011 dollars” to measure projected growth of the cost of college. The point at which to two items intersect is the year 2086.
Here’s the graphical representation:
At that point college would cost $181,000 per year, “assuming tuition costs continue to increase at present rates.”
This is, it’s worth pointing out, a little silly.
College costs escalate, for sure, but they don’t skyrocket automatically and they can’t do so forever.
Because college tuition doubles at roughly twice the rate of inflation, and has done so for about 20 years, we assume this is always the case. It is not. It rises so fast because it can, because people are willing to pay higher rates. But it can’t go up forever. Very few Americans, even the relatively affluent, would be willing to pay anything like $181,000 a year for college.
There’s no reason to think the trends of college tuition will continue just like this. The magic year, 2086, is 72 years from now. But current college pricing trends haven’t been going on for anything like 70 years.
College pricing is complicated (there’s a huge difference between what in-state and out-of-state students pay at public colleges, and a gigantic difference between the sticker price of college and what real students actually pay) but here are some real trends in college pricing.
Here’s the cost (thanks to the Chronicle of Higher Education) of the University of California system since the 1970s:
The cost sure gets higher, but it doesn’t increase at the same rate.
Looking at really long-term trends and the numbers look even more interesting. Here’s Yale’s cost (thanks to this site) since 1787.
It’s a pretty strange line. The 2086 deadline assumes the trends in college pricing will continue for far longer than they’ve been going on so far. There’s no reason to think this.
College pricing is a function of many things, including institutional costs, federal financial aid, student loans, the American economy, and just simple demand. Changes in policy have a dramatic impact on how much colleges can charge for tuition. The G.I. Bill alone, which provided virtually free college education to American World War II veterans, radically changed the nature of college pricing. And the world is going to look a lot different in 70 years.
As a metaphor, however, it’s an interesting progression. The problem with college isn’t that it’s not “worth it.” It’ll be worth it even at $180,000 a year. But such a study indicates just how much college costs, and how strange current college pricing really is.