Increased Tuition Fees
Nowadays, when hiring, employers look for employees with college degrees. Higher education is not only unlocking more possibilities as a qualified employee but also the next step to developing oneself as an individual. While there are people who would like to attend university, many are discouraged by the increase in tuition and consequently, student debt. The following paragraphs will cover reasons why universities increase their tuition, student needs, and pros and cons for attending university.
What kind of tuition fees and increases does this refer to? Below are some examples of both state and private universities:
While there is a difference between public and private universities, they both offer basically the same service: a four-year education. So, what’s the difference? Public universities receive more government funding and grants, while private institutions rely on tuition and donations. While a public institutions tuition, such as the University of Illinois, is roughly $35,000 per year. (University of Illinois, Tuitions) A private institutions’ tuition, such as Harvard, is $67,580 per year. (Harvard at a Glance, Tuition) In Bulgaria, the difference
between a public and private university is $8,570 with the public institution being $3,729 per-year (Sofia University Tuition Fees, ucc.uni-sofia.bg), and the private institution being $12,300 per-year. (Costs and Aid, AUBG)
Comparing the increase in tuition and room and board after inflation from a study conducted by trends.collegeboard.org, there is a increase in the public institutions’ fees by 2.6%, and an increase in private institutions’ fees by 2.3%. One might expect the private institutions to have more of an augmentation than the public institutions. This can be explained by the fact that public institutions are directly dependent on the government and are influenced by the economy, while private institutions are dependent on their student’s tuition and donations. Hillary Hoffower, from Business Insider explains the difference between public and private institutions as, “a surge in demand, an increase in financial aid, a lack of state funding, a need for more faculty members and money to pay them, and ballooning student services.” (Hoffower, Business Insider)
An increase in tuition may be justified, since universities are constantly investing in their resources to offer the best to attract students because of the intense competition. In order to do this, they offer more programs, qualified faculty, better facilities and sometimes, post-graduation network. According to nonprofitfacts.com, the functional expenses of Colgate University for 2013 were salaries and wages (33%), other (23%), grants to domestic individuals (19%), other (12%), depreciation, depletion, and amortization (7%), and fees for services (non-employees) (6%). (Colgate University Expenses, nonprofitfacts.com)
Though university comes at a price, the education, and knowledge that an attending student will receive from their time spent there is priceless. They not only receive training in their field of study, but also get to uncover and explore their interests and hobbies. Once they graduate, they receive a diploma, which allows them to confidently pursue a high-paying job, and expand their horizons.
The reasons individuals attend universities apart from those mentioned above are also to gain confidence about their abilities, create new connections, and become truly independent.
While there is a surplus in student aid, grants, loans, and scholarships- precisely $126 billion dollars, (collegeboard.org) many students do consider the sometimes-harsh consequences that may follow in taking out loans to be able to afford a four-year education. In theory, the college loan system is created to help the student pay for their education, which is great. The interest rate, and debt according to the U.S. Student Loan Debt Statistics for 2019 states that “over $1.56 trillion …spread out among about 45 million borrowers.” (U.S. Student Loan Debt Statistics for 2019) – which the now-graduate will face afterwards though, is not so great. In addition to the formidable amount of debt that students are faced with, the average monthly loan payment is around $400.
One of the reasons prospective students would be discouraged in attending university is because the average wage in Bulgaria is $8,400 per year (Euscoop.com), and the average wage in the USA is $41,400 per year. (Average Salary Information for US Workers, Doyle) With these numbers in mind as well as looking at tuition fees of public and private universities, it is easy to see why some people may be hesitant to pursue higher education or enroll their child in a high-cost university. “…applicants from lower socio-economic groups did put greater importance on the availability of grants and bursaries and the impact of living costs than their peers from more affluent backgrounds.” (Tuition Fee Rise, Morrison) . Specifically, in Bulgaria, students will be more willing to attend a $3-4,000 university rather than a $40,000 university even though there is a noticeable difference in the quality of programs, faculty, facilities, and extracurricular and post-graduate benefits network. While many students may rely on their parents or jobs to pay for tuition, the jobs in that area are sometimes not enough to pay for the tuition, and those who finance the student’s education find it harder to cover the fees.
While many parents have repeated “get a good education, get a good job” so much, that it has become a mantra for some students, ` job markets, especially in the United States, don’t put that much stress on university degrees, where an individual would be able to find a well-paying job, even without a degree. A few examples of jobs which pay over $70,000 a year would include air-traffic controllers ($97,000), Nuclear reactor operators ($93,000), First-line police and detective supervisors ($88,000). (Osterland)
Another way that students may try to avoid paying the high cost of higher education would be to find untrained positions for lower pay. Obviously, there are many alternatives to a four-year program such as vocational training, community colleges for associate degrees, and online programs. For example, an individual will become a nurse’s aide, rather than becoming a nurse, a teacher’s assistant, rather than becoming a teacher. When they avoid going to university and instead, get jobs to support themselves, they reinforce their socio-economic standing of being in a low-income group.
Increasing tuition also influences the economy and in turn, alters the job market. Universities make a positive contribution on a micro level by employing professors, administration, as well as other staff for maintenance and running of the campus. Universities contribute to the macroeconomy by preparing a trained workforce for the national and global market. They also attract foreign students who also contribute to the economy.
If students can’t afford the tuition, universities lose not only students, but university jobs are also in danger. The local area businesses, which are dependent on the students for both income and low-cost workforce will be impacted. This will lead to a drop in the microeconomy and impinge the macroeconomy as well.
Some solutions to offset this might be to avoid unnecessary construction by investing in community facilities- resources such as sports centers, dance halls, theatres, and restaurants. While universities such as the American University in Bulgaria takes pride in their community service program which helps, “Orphanages, elderly people, the underprivileged and those needing help with medical treatment for illnesses…” (Civic Engagement, AUBG), they could save costs on their facilities and support the local economy by coordinating with local businesses such as those mentioned above.
I’ve presented reasons why rising tuition is driving students to seek other options to avoid heavy debt and job uncertainty, even though students receive more than a diploma. Furthermore, I’ve presented the influence on micro and macroeconomics and how the students aren’t attending universities.
I believe universities are improving students’ lives in the long run, though the amount that is spent by universities should be looked at more closely.
Works Cited:
“Average Rates of Growth of Published Charges by Decade.” Average Rates of Growth of Published Charges by Decade – Trends in Higher Education – The College Board, trends.collegeboard.org/college-pricing/figures-tables/average-rates-growth-published-charges-decade.
“Average Salary in Bulgaria Grows by 7.1% to 1077 Leva.” EU Scoop, www.euscoop.com/en/2018/5/14/average-salary-bulgaria-grows.
Boschen, Seth. “Six Ways to Combat Rising College Tuition Costs.” Summit of Coin, Summit of Coin, 2 Apr. 2018, www.summitofcoin.com/blog/4/2/2018/combat-rising-college-tuition.
“Civic Engagement.” American University in Bulgaria, www.aubg.edu/civic-engagement.
“Colgate University Treasurers Office, Office Of Accounting & Control in Hamilton, New York (NY).” NonProfitFacts.com – Tax-Exempt Organizations, www.nonprofitfacts.com/NY/Colgate-University-Treasurers-Office-Office-Of-Accounting-Control.html.
“Costs and Aid.” American University in Bulgaria, www.aubg.edu/admissions/costs-and-aid.
Doyle, Alison. “How Much Is the Average Salary for US Workers?” The Balance Careers, www.thebalancecareers.com/average-salary-information-for-us-workers-2060808.
“Harvard at a Glance.” Harvard University, www.harvard.edu/about-harvard/harvard-glance.
Hoffower, Hillary. “College Is More Expensive than It’s Ever Been, and the 5 Reasons Why Suggest It’s Only Going to Get Worse.” Business Insider, Business Insider, 8 July 2018, www.businessinsider.com/why-is-college-so-expensive-2018-4.
Morrison, Nick. “Tuition Fee Rise Caused Bump Of Up To 74% In Student Debt.” Forbes, Forbes Magazine, 28 Mar. 2018, www.forbes.com/sites/nickmorrison/2018/03/27/tuition-fee-rise-caused-bump-of-up-to-74-in-student-debt/.
Network, QS Asia News. “Intense Competition among Universities May Have Adverse Effects on Students.” QS WOWNEWS, 30 Jan. 2018, qswownews.com/intense-competition-among-universities-may-have-adverse-effects-on-students/.
Osterland, Andrew. “Tuition Sticker Shock? Here Are Good Jobs You Don’t Need a College Degree to Get.” CNBC, CNBC, 31 May 2016, www.cnbc.com/2016/05/31/good-jobs-you-dont-need-a-costly-college-degree-to-get.html.
Охридски, Софийски Университет Св. Климент. “Софийски Университет ‘Св. Климент Охридски.’” Tuition Fees in Sofia University for the Academic 2018 / 2019 Year / International Students / Admission / Home – Софийски Университет “Св. Климент Охридски”, www-ucc.uni-sofia.bg/index.php/eng/admission/international_students/tuition_fees_in_sofia_university_for_the_academic_2018_2019_year.
“Types of College Loans.” Types of College Loans, bigfuture.collegeboard.org/pay-for-college/loans/types-of-college-loans.
“Undergraduate Admissions.” Tuition, Illinois Undergraduate Admissions, admissions.illinois.edu/invest/tuition.
“Universities Have Huge Positive Impact on Local Economy, Study Says.” McGill Reporter, 5 Oct. 2016, reporter.mcgill.ca/universities-have-huge-positive-impact-on-montreal-economy-study-says/.
“U.S. Student Loan Debt Statistics for 2019.” Student Loan Hero, studentloanhero.com/student-loan-debt-statistics/.
