For Some, Cost of College Moves Out of Reach

Feb. 10, 2007 — -- Taylor Reed, 22, has a college education, a bright future and $100,000 in student loan debt, something that will burden him for years.

"I'm not going to be able to use the full amount of my income to establish myself," he says. "To buy a house will be a little tougher."

Reed works at a restaurant in New Jersey while he decides how best to use his degree from McDaniel College, a private liberal arts school in Westminster, Md. To get that degree, Reed and his parents took out loans -- the only way, he says, that he could finance his education.

Reed's debt is higher than the national average, which is about $20,000 per graduate.

"The tuition was close to $30,000," he says, "and it kept going up about $2,000 per year."

Those tuition increases are a key point in growing questions about student debt and pricing practices at the nation's private and public colleges and universities.

Over the past 20 years, inflation, as measured by the Consumer Price Index, increased by 84 percent, according to the Bureau of Labor Statistics. But the cost of tuition, fees and room and board at both public and private colleges and universities grew at a rate much faster than inflation.

According to The College Board, those costs tripled. In the 1985-1986 academic year, comprehensive costs at public schools totaled $3,791. For this academic year they are $12,796. At private colleges and universities 20 years ago, comprehensive costs totaled $8,902. This academic year, the number is a stunning $30,367.

The new chairman of the House of Representatives' Health and Education Committee, Rep. George Miller, D-Calif., says, "Middle class families and certainly low-income families find themselves in a crisis with respect to the accessibility of higher education and the affordability of higher education."

Princeton University, the elite Ivy League school in Princeton, N.J., for one, took the unusual step -- albeit a small one -- of not raising tuition for the next academic year, 2007-2008. Princeton dipped into is nearly $14 billion endowment and made other budgetary adjustments to hold tuition steady at $33,000. The last time it did not raise tuition was 40 years ago.

"College tuition puts a pinch on what families can do," says Christopher Eisgruber, Princeton's provost. "And we wanted to recognize that by holding tuition flat."

At the same time, Princeton's administrators and leaders on other campuses argue that criticism of tuition rates is unfair. Higher education, they argue, is a business that can't be compared to any other.

"I don't think the Consumer Price Index," Eisgruber says, "is a very accurate gauge of the kinds of costs that increase in higher education."

Educators' argue that higher education is more labor intensive than other kinds of businesses. Faculties, where salaries must compete with other schools and private industries, are a college's biggest cost. And to insure excellence in education, they argue, more and more professors are needed to keep class sizes small. Costs also grow because of constant updates of technology and research facilities for students and faculty.

After all, they say, colleges are not producing widgets, but the next generation of the country's leaders, educators and well-educated engineers, scientists and economists to keep the economy competitive.

"All of those ingredients," says Princeton's Eisgruber, "are things that are paid for by the university's revenues and its endowment as well as tuition."

Princeton says tuition covers only about half of the cost of the education.

Administrators at public colleges and universities point to a decade of decline in state tax support for their institutions, saying they have had no choice but to pass increased costs to families in the form of higher tuition.

Others point out that despite a recent congressional vote to cut interest rates on federally guaranteed students loans, help for low-income students and their families -- the kind that does not produce post-graduate debt -- has declined by half in recent years.

But those explanations haven't stilled the call in Congress and elsewhere for more detailed answers why a college education costs so much. And Chairman Miller plans hearings to which he will summon leaders of the nation's colleges and universities.

"We have to ask a very serious question," says Miller. "Is this the best education you can provide, and is this the best price for which you can provide it?"

Back in New Jersey, Tara Burgess says the price was too high for her. She's attending a two-year community college because the cost of a four-year school was something she couldn't afford. And as she works as a bartender to make ends meet, even at a two-year school, she worries about the future.

"I'm 22," she says, "when I have children, how am I going to pay for college? If we're paying $40,000 now, what's it going to be?"