The Economics of College Tuition

Welcome to your asbestos ridden apartment. Don’t puncture the walls or floors or anything lest you release the deadly chemicals that will fill the air and probably give you cancer. We hope you enjoy your last semester here at the university.

I was just about to sit down at my desk to write a letter to the president about this insufferable circumstance when I realized—no desk. I’m only a student, it’s not like I need a desk or anything. I had a desk in my old room 10-103. I had moved there from the dorms after my freshman year. Those were the good ole days. 

Seriously, what student doesn’t need a desk? To write on, to set your computer on, to pile tons of college kid stuff on. This desk is important. And necessary. When you pay a lot of money to go to school I reckon you just come to expect a desk in your apartment. And if you are going to college, chances are you ARE paying a lot of money.

Every year my tuition has gone up. The increase is usually somewhere between two and four percent. Mark Cuban can tell you how if you click here. So now, tuition is a good bit higher than it was when I was a freshman. But guess what? My scholarships have all stayed the same. No increase. Get this… the current inflation rate of the U.S. dollar is at 2%. Now that will fluctuate and change but generally inflation will have a positive percentage.

Why does this matter to you? Because businesses know this and you don’t. Suppose you work at a job where you make $50,000 per year. You do a good job and the company you work for is doing well. During your year of working at this company, the U.S. dollar experiences an inflation rate of two percent. If you don’t receive a two percent raise in salary at your job you will be making less money than you did the year before.

Now let’s apply this principal to college tuition. You are a college student and you receive a scholarship for $10,000, and your tuition for a semester is $15,000. After two semesters your tuition costs go up to $15,300. Now your $10,000 scholarship is worth less than it was at first.

So inflation causes the cost of running a college to increase which in turn means students have to pay higher tuition. It would just be nice if our scholarships increased as well. But then again, perhaps two percent isn’t really anything to worry about.

I would encourage freshman to take as many hours as they can early on because it ain’t going to get any cheaper. By the time you’re a senior, you will be ready to graduate because your scholarship isn’t worth as much anymore, if for no other reason.

 

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