# The Cost of Education and a Crippled Generation

People are always talking about it: student loans are too high, kids come out of school overqualified and without a job, etc. In short, were all aware that there is a problem with the rising cost of education in our current time. That being said, Ive seen little by way of quantification of the issue, so I am going to attempt to both quantify and reason about this problem. It is for many one of the greatest plagues of our generation. That being said, this is not a rant about earlier generations (but Ill get to that). In fact, it is simply a realization of the problem with some loose suggestions on how we can begin to tackle the issue.

## The Numbers

The first thing I want to go through is the numbers. I will use my Alma Mater as an example and then we will work our way out from there. I went to the University of Illinois at Urbana-Champaign for an undergraduate degree. Not including the extra engineering fees, room and board, etc. the base tuition and fees for an in-state resident at this public institution was $13,658 (2010-2011 academic year). Today, that number has already increased$15,602. That is roughly a 14.3% increase in 5 years. This is clearly significantly higher than inflation over the same period. Over the last 10 years (2004-2005 academic year to today), we have seen approximately a 96.4% increase in tuition. That is to say, it has nearly doubled; this seems to be a trend every ten years. Lets see what this graph looks like then:

Figure 1. Tuition + Fee rate changes over time.

It doesnt take a math major to realize that this is a scary graph. That curve is moving pretty fast (i.e. seemingly close to exponentially). That means since the 60²s, tuition has doubled every 10 years. We just happen to be at the front of the problem. What I mean is that at this rate, we will have doubled yet again in 10 years and the problem will be far worse than it is for our time now.

Now when you add the cost of simply living in an area, this cost also goes up. If you live in the dorm (which you must in your first year), you can tack on a little more than $10,500 extra per year. Similarly, if you live on the cheap by renting an apartment that you only live in during the 9 months for school, youre probably looking at an at$6,600 per year (at a low $400/mo * 12mo/yr rent +$200/mo * 9mo/yr food). The reality is probably slightly higher than this. But as you can see, for an in-state student, tuition is clearly in the low-mid $20,000²s/year just to attend this school. Over 4 years, this easily totals to more than$80,000; a small mortgage before even having a full-time job.

This is not just a problem with the University of Illinois. In fact, this issue is systemic throughout the US higher education system. According to the National Center for Education Statistics, the overall trends look something like this (in current dollars):

Figure 2. Plot of overall college tuition increases over time. Data provided by National Center for Education Statistics.

Though less pronounced than the previous trend for our look at a specific university, we see a near-doubling in each 10-year period with the exception of 1991-2001 (with an approximate increase of a mere 61%). Overall, the problem everyone is talking about appears to be real. The cost of education is growing and fast.

## The Other Numbers

So far we have belabored the point that the cost of education is rising quickly. Everyone already knew this in some sense, but I wanted to establish a base for discussion so were all on the same page. If you still dont believe this is the case, there are many resources discussing this issue if you only look. That said, we havent discussed the other side: people make higher salaries than they did 30, 20, or even 10 years ago, right? That must mean things are keeping up and the economic burden is the same, yes? Well, from what I can gather: not exactly. Again, lets look at the numbers rather than agreeing to the, it feels more burdensome than you make it sound philosophy.

According to the US census, median income of US workers over a similar period of time looks like this:

Figure 3. Median income of US worker holding bachelors degree or higher in current USD. Data provided by US census.

This chart certainly shows that wages are not keeping up with the cost of tuition. In fact though there is likely insufficient data to fully make this case it appears that income increases are beginning to level off (i.e. theyre increasing but at an ever-decreasing rate). Lets see if we can break this down to get a rough idea what has been happening. Below is a table created from the data I’ve referenced factoring the cost of education as a percentage of (gross) income:

Table 1. Percent of annual income for 4-year education per year. Dollar amounts are in current USD with a 2-year discrepancy between the current USD between tuition and income (so results may be slightly skewed).

This chart shows us that a disproportionate amount of our annual income will go to education. Furthermore, the salaries are from the census of all people (i.e. all generations) having a bachelors degree or higher. This means that many of these people may be deep into their career making higher salaries while new grads are likely at or below the median in many cases (read: you [and your salary] dont typically peak at the beginning of your career).

## Conclusion

This issue is currently a hot topic in our society. In fact, most people are affected by it since it is likely that they find themselves in this situation or they know someone close who is (i.e. a child, perhaps?). Though many are talking about it, it feels as if there is not much real discussion on-going about improving the situation (at least in any sizable quorum). If there is, it seems to be well hidden from the everyday public who is most affected by it. Of course there are discussions in Washington, but politicians do a lot of talking and perform very few actions, so that’s not always very useful (/end cynicism).

There exist valiant efforts such as Kahn Academy and Coursera for those who are looking to learn (i.e. supposedly the primary reason for education). However, these solutions are incomplete. We have not quite made it to the point where knowledge is equivalent to a degree. In many cases, having a degree is more important to getting a job than possessing the relevant knowledge. This is clearly backwards. Until we can get passed these issues as a society, I fear we may be stuck for now and in 10 years, some other 20-something year old will write a similar blog discussing the same things.

As I said before, though it seems there is no large on-going discussion about the issue, many are already talking about it. Let’s turn those whispers into a full-blown dialog. If our generation turns out to be apathetic on this issue, we could doom our future.