It’s one thing to dream about sending your children to a great college, but another to pay for it. Like healthcare, taking the family to a baseball game, or just simply trying to catch a movie on a Friday night, college tuition is one of those expenses that never seem to fall or even plateau. The rising cost of college far outpaces our economy’s average rate of inflation.
Setting aside the more subjective arguments regarding why college costs keep increasing, there are a handful of objective factors that simply cannot be denied. While any one of them can do enough damage on its own, collectively, they create more than just a minor headache as you try to strategize how to send your kids to college without breaking the bank.
For the many public university systems throughout the country, each has felt a drastic tightening of the proverbial belt over the last few decades. As many states struggle to meet pension requirements and the funding of various public programs, state-funded college systems have often been amongst the first of the budget cut targets
Although restricting tenure for professors and placing salary freezes on different positions has been an attempt to counteract the budget cuts, in reality, the results of such measures come nowhere near resolving the funding crisis. Instead, tuition has skyrocketed over the last 20 years, and in public, state-funded universities now place far more importance on attracting out-of-state and international students simply due to the higher tuition rates they can charge.
Middle Management Bloat
Just as damaging, since it affects tuition rates and private universities, a rapid increase in managerial and administrative positions has significantly raised labor costs for colleges throughout the country. Of course, when coupled with state funding issues and stagnating alumni donations, universities pay for the higher labor costs through tuition rate increases.
In that regard, universities suffer the same ailment as many companies as middle management bloat severely cuts into revenue and eliminates any profitability or, in the case of state-funded schools, even the ability to balance budgets and breakeven. The rapid rise in for-profit institutions over the last decade has also played a hand in the rising tuition state of higher education.
Establish a Realistic, Responsible Strategy
Given the nature of the various causes, both parents and students should not expect college tuition rates to halt their meteoric rise anytime soon. In fact, from a planning perspective, assuming tuition inflation rates will continue to far outpace other areas of inflation will help prepare you for the inevitable.
Discussing the matter with a trusted professional is your best option to establish a financially responsible strategy. It allows your children the many benefits a higher education will provide them.
Are you looking to help your child or children pay for the high cost of a college education? If so, would you like to learn how to shop for college and see how to pay for it down to the penny? Let us show you the proven process we use with our clients with college-bound children. Simply click here or call (763) 445-2772 to schedule a complimentary consultation today!