Posted by: nickgerlich | October 26, 2007

Making The Grade

There was once a time when attending college was the domain of only the wealthiest families. Fifty or sixty years ago, only the sons and daughters of blue-blood lineage could begin to afford higher education.

Today, it is quite the norm for 25% of our adult population to have an undergraduate college degree or higher, and college enrollments have never been higher. The irony, though, is that tuition costs have also never been higher.

And are not about to go down. Ever.

TuitionIn fact, tuition increases each year continue to outpace the rate of inflation by at least a magnitude of 2. It’s not cheap to go to college or pursue graduate degrees. Add in the costs of books, activity fees, commuting and/or dorm/meal expenses, and you have an annual investment that makes house payments seem pretty easy.

And that’s the key word right there: investment. While our economy will always have need for laborers without benefit of a college education, an increasing number of jobs do require such a pedigree. And a master’s degree is often the only ticket for advancement once you get that job.

According to MSNBC.com, we’d better be ready for continued escalation of education costs. And from my perspective on the inside, I will agree. There is a diminishing pool of qualified PhD holders from which we can hire to fill faculty openings. The shortage is especially critical in business.

The result is a rapid increase in the salaries reqauired to hire (much less retain) doctorates. The laws of economics are at play in this equation. And as painful as this is for those of us with many years at WT, we are looking at hiring freshly-minted PhDs this year at salaries that meet or exceed those of the most senior faculty. If we don’t cough up the money, then we won’t get new faculty.

Ouch.

But in the end, it is students who will pay the price. State governments nationwide are demonstrating reluctance to fund higher education, preferring to offload that responsibility to corporate and personal benefactors, as well as the students themselves. And faced with the market reality that an MBA can easily (and quickly) earn more money in industry than a PhD can in academia, we will probably continue to face faculty shortages.

A further result of all this is that students are forced to borrow ever more money to purchase their education. It is not uncommon for public school students to graduate with a diploma in one hand, and debt for $25,000 or more in the other. Multiply times 6 if you go to a private school.

The private undergraduate institution I attended in the 1970s cost about $4000 per year back then, which was a lot of dough back in the Carter era. That same school now costs nearly $30,000 per year.

But is all this expense (and debt) worth it? Absolutely. While we may still read about college dropouts like Bill Gates and Michael Dell becoming billionnaires, the odds of this happening to you are rather slim. The vast majority of us will need, at minimum, an undergraduate degree to have any hope of making it in industry, and a master’s degree to climb the ranks.

We are saving aggressively for our daughters’ college educations. We don’t want them to accrue massive amounts of debt, but I bet that we’ll only be able to subsidize a public education for them. By the time they’re ready for college, private schools will likely cost $40,000 per year. And we’ll be more than happy for them to stay at home and attend WT.

As for my students, I agree that it is hard to make it happen. It’s not cheap, and it’s only going to get more expensive. But the price of not getting an education now will be even higher.

Dr “Student’s Blues” Gerlich

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