Colleges are losing pricing power
After years of relentless tuition hikes, many colleges and universities are facing a backlash and more students and parents are looking at value. They don’t want to be stuck with outrageous student loans, and now many private colleges are offering record financial aid to keep classrooms full.
Posted in: Your Education
Tags: affording college, college, college affordability, college costs, college education, college tuition backlash, college tuition breaks, college tuition revolt, colleges losing pricing power, cost of college education, crippling college costs, dramatic rise in tuition, going to college, is college worth investment, picking a college, reducing college costs, soaring costs of college, soaring tuition costs, tuition costs, value of college
Dealing with rising college costs
The issue of rising college costs is a hot topic these days, as young students and families grapple with the issue of how to pay for a college education. Too many young people are saddled with crippling college debt, and as this has gained more attention, it has certainly focused the minds of many Americans as they weigh their options.
Universities are reacting as well, and some of the trends are very promising. Davidson College has created an innovative no-loan policy.
“When I got my acceptance letter and my tuition bill, it told us that everything was mostly paid for,” she recalls. “I had heard something about Davidson’s no-loan policy, but it didn’t make sense because it sounded too good to be true. My mom was like, ‘This can’t be right. We need to go talk to them.’ ” The admission counselor explained that, because of the Davidson Trust, the school was able to cover 100 percent of demonstrated need without loans. Her mother cried. “At the time, I felt kind of embarrassed. When we walked back to my car, she said, ‘I’m so happy. I feel like I should make [the counselor] something.’ ”
Other schools like Harvard are also making it much easier for students to get grants instead of loans in order to lower the student debt burden. Families and students need to do their research, and you have to factor in costs and debt into your decision. Otherwise students will have this debt hanging over them for much of their careers.
You can read more about the student debt crisis and the value of a college education versus the costs here, here and here.
Read all of these materials, and you’ll be much more prepared for the decisions you’ll have to make.
Posted in: Your Career, Your Education
Tags: affording college, career vs education, choosing a major, college, college affordability, college costs, college education, college experience, college major, cost of college education, crippling college costs, Davidson College, Davidson College no loan policy, debt free degree, dramatic rise in tuition, going to college, is college worth investment, leveraging college degree, maximizing college degree, no loan colleges, picking a college, reducing college costs, soaring costs of college, soaring tuition costs, tuition costs, value of college, value of college major
The crippling cost of college
One of the themes we keep emphasizing has to do with the crippling costs of a college education today in America. Sure, college campuses are much nicer with all the new buildings and new technologies, but they are failing in their basic mission if students leave there with massive student debt that will hang over them for the rest of their lives.
More publications are doing good work discussing these problems. In Newsweek, Megan McArdle asks whether college is a lousy investment.
Why are we spending so much money on college?
And why are we so unhappy about it? We all seem to agree that a college education is wonderful, and yet strangely we worry when we see families investing so much in this supposedly essential good. Maybe it’s time to ask a question that seems almost sacrilegious: is all this investment in college education really worth it?
The answer, I fear, is that it’s not. For an increasing number of kids, the extra time and money spent pursuing a college diploma will leave them worse off than they were before they set foot on campus.
Given the costs, it’s hard to argue with her on this point. She discusses how college was critical for many families in building a better life for the next generation. But sitting on an English degree with $150,000 of debt seems like a pretty bad deal.
That said, we can’t overreact to the current economic conditions. When the economy improves, more of these kids will get jobs with their degrees.
Yet something has to give, and it was very encouraging to hear President Obama challenge colleges to slow down tuition inflation.
Also, the future of free college courses looms on the horizon. Universities would be wise to start figuring out how to lower costs, or they might really have a problem in the future.
Posted in: Your Career, Your Compensation, Your Education
Tags: affording college, college, college affordability, college costs, college education, college lousy investment, cost of college education, crippling college costs, dramatic rise in tuition, educate yourself, emergence of self-education, free college, free college courses, free college education, free learning tools, free online classes, free online lectures, going to college, is college worth investment, Megan McArdle, Newsweek, online learning, online tools, picking a college, reducing college costs, revolution in college education, revolution in higher learning, self-education, soaring costs of college, soaring tuition costs, student loan crisis, student loan reform, student loans, tuition costs, value of college, virtual classroom, virtual learning
The virtual classroom of the future is here now
The idea of college kids congregating in libraries on college campuses will likely never go away, but a revolution in higher learning is underway that can shake up the university system in the United States and around the world.
The trend of putting college courses online for free is exploding, and the idea of a college education may never be the same. That’s probably a good thing, as the cost of a college education has been spiraling out of control. We believe that the emergence of self-education through free online tools will be one of the great trends of the 21st century.
Steve Klinsey is the founder and CEO of New Mountain Capital and has been very active in education reform for years. He has published a very interesting commentary in Baron’s discussing this topic.
The American Dream is increasingly blocked by steadily rising college costs, and America’s student debt stands at more than $1 trillion. Fortunately, the combination of readily available technology and a simple regulatory change could create a low-cost or even a no-cost alternative path toward a college degree. The edX program recently announced by MIT and Harvard points the way toward a massively open online course movement.
EdX is designed to make MIT and Harvard college courses widely available online, building on the MITx program that already offers MIT courses free of charge online to any student anywhere. EdX will support students’ learning and grade their work, and a certificate from the program will be granted for successful course completion. EdX is also offering to give its online-course-delivery software to other educational institutions that want to broadly distribute their courses.
Last fall, Stanford offered an introductory Artificial Intelligence course for free, online. It reported that 160,000 students, from high schoolers to retirees, enrolled from 175 countries, and 22,000 students completed the rigorous course.
Princeton, the University of Michigan, the University of Pennsylvania, and others are pursuing similar paths. The Open University system in the United Kingdom and Western Governors University in the U.S. have been pioneering this philosophy as well.
Digital technology can revolutionize the cost structure of education, just as it has for other forms of information. However, regulation needs to change to enable the advance, particularly in the area of accreditation.
He goes on to discuss ways that some sort of certificate of completion can be given to people who complete these courses online, and how the government can incentivize universities to come up with a standardized system to handle these certificates so that prospective employers and other universities can count on them.
This is yet another example of the tremendous power the the internet and social media. The exponential effect this can have on global learning is simply staggering and also very exciting.
Hopefully, the days of ridiculously priced college educations will be coming to an end.
Posted in: Your Education
Tags: affording college, Baron's, college affordability, college costs, college education, cost of college education, dramatic rise in tuition, educate yourself, EdX, edX program, emergence of self-education, free learning tools, free online classes, free online lectures, online learning, online tools, Open University system, picking a college, reducing college costs, revolution in higher learning, self-education, soaring costs of college, soaring tuition costs, Steve Klinsey, tuition costs, virtual classroom, virtual learning
Fixing college tuition
We have some serious problems in the country surrounding college education. We have some of the best universities in the world, so the issue is not quality. The issue is price. The cost of college is soaring, and aggregate student debt will exceed $1 trillion!
President Obama is trying to address the student loan crisis with some sensible reforms, but the bigger long-term issue has to do with the cost of a college education.
Steven Goodman addresses the problem and proposes a solution.
Since loans now comprise 70% of financial aid packages, the growing tuition burden falls squarely on student-borrowers who may have saved for college but who still can’t meet the high cost of attendance. Two-thirds of American undergraduates are in debt. This year, student loan debt will grow to more than a trillion dollars, outpacing credit card debt for the first time. As hundreds of thousands of high school seniors prepare their college applications, and their parents compile documents required for financial aid, Congress needs to seriously consider legislation that will rein in future tuition increases.
There are many reasons for the dramatic rise in tuition, including demand for better student residences, cutting-edge laboratories, IT improvements, cuts in state subsidies and administrative growth. Regardless of which factors are most significant, the fact remains that there has simply not been enough external pressure to force universities to contain costs. Ironically, the accessibility of student loans, while admirable at first glance, has contributed to tuition growth. And while President Obama’s recent proposal to cap student loan repayments depending on income is a step in the right direction, it doesn’t address the bigger problem of runaway tuition in the first place.
This is where government needs to firmly step in. The federal government contributes billions of dollars to research and development on campus and allows universities to function as tax-exempt institutions. Self-policing of college costs has not worked; government needs to tie its support of higher education to college costs.
Read the entire article as it presents a sensible argument.
Posted in: Your Education
Tags: college education, cost of college education, dramatic rise in tuition, financial aid packages, minimizing student loans, soaring costs of college, soaring tuition costs, student loan crisis, student loan debt, student loan reform, student loans, tuition costs, value of college