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Higher Education. Higher Cost. The Shocking Truth.

Higher education is almost 5 times more expensive as it was 30 years ago. Year over year cost of goods has increased, and when adjusted for inflation, U.S. wages actually declined by 0.2% in January. The cost of living, also, has risen 14% over the last 3 years. But something else has happened.

Nearly 14% more Americans have completed a four year college degree plan or higher than citizens 30 years ago. That means two things. 1) There's a demand for higher education, or at least, an inflated demand for higher education, and 2) more people are actually going to college than ever before. Either way, there cannot be an increase in demand without an increase in cost. And that cost has to be paid by someone.

Tuition and fees increased by less than 2 percent between 2016-17 and 2017-18 after adjusting for inflation, according to new College Board reports recently released. Net prices for full-time students at public four-year institutions have increased for eight straight years, for seven straight years for students at public two-year colleges, and for six straight years for those at private nonprofit colleges and universities. So the typical student keeps paying more for college each year.

Financial Aid

Grant aid for post-secondary students totaled $125.4 billion in 2016-17. Colleges and universities are shouldering more of the grant load. The federal share of grant aid topped out at 44 percent in 2010-11 and has since dropped to 32 percent in 2016-17. Institutional grant aid rose from 35 percent to 47 percent during that same time frame.

Expenditures on Pell Grants increased from $15.2 billion in 2006-07 to $35.8 billion in 2011-12, then dropped to $26.6 billion in 2016-17. The number of Pell Grant recipients has fallen for five straight years but at 7.1 million recipients is still 38 percent higher than it was in 2006-07.

Nearly two-thirds of bachelor’s degree recipients from public and private nonprofit institutions borrowed 60 percent of their educational expense. They graduated with an average debt of $28,400. Half of outstanding federal education loan debt is held by just 12 percent of borrowers who owe in excess of $60,000 or more. Another 57 percent of borrowers with outstanding federal education loan debt owe less than $20,000.

Financial aid per undergraduate full-time-equivalent student averaged $14,400 in 2016-17. Grants from various sources accounted for $8,440, federal loans were $4,620, education tax credits and deductions were $1,280, and Federal Work-Study averaged $60.

Graduate students received $27,950 per full-time equivalent in financial aid. Federal loans averaged the largest share, at $17,710, followed by grants at $9,290, tax credits and deductions at $860, and Federal Work-Study at $90.

But here is what's more important to understand. The investment in one's education should be on par with the return that that investment provides. Case in point.

The average cost of getting a bachelor's degree in Elementary Education and Teaching is about $141,936 which comes out to $35,484 a year. Contrast that with the fact that the national average starting teacher salary is $38,617, and you can see very quickly that unless that teacher gets to stay at home with mommy and daddy, eats beans and rice, goes nowhere but to work and back home for four straight years they'll carry student loan debt with them upwards of 20 years or more after they've graduated. This statistic becomes even more shocking when you consider that a master's degree has a minimum $30,000 price tag, which is a fourth of a four year degree plan cost, but won't, necessarily, net you a 25% increase in income.

Since your income is directly related to where you work, the city/state that you live in, and your level of expertise; choosing your field of study, the school your attend, and how you finance that investment should be heavily weighed against the cost of that education.

Is a degree worth it? Only you can decide, but don't let the decision create a negative, long-term affect in your financial and personal future. Seek helpful advice, and don't tackle the decision-making process alone. There's always a better way.













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