Tuesday, April 5, 2011

A penny saved...

...ain't going to cut the mustard for tuition anymore.

But of course there's a lot of folk out there that'll
lend you some pennies, with interest, and your parents as co-signers. Somewhere along the line we forgot that "children are our future" and decided to turn them into cha-ching. The chart below shows what's happened for yearly tuition (only tuition, mind you) since 1996 at my alma mater, UNI. A small directional public school. Sorry about the blur...home-made OpenOffice.org docs don't seem to import well:

What a sweet linear relationship! I wish I saw that in all my data. As you can see, every year tuition increases around $362. Next year (11-12) just came out, and yep ~$370. So my paltry freshman ~$2,500 per year doubled in less than 10 years (~2004-5). And by the time Noah and Sophia get to college age, tuition could be $12,700! Per year. Excluding books, room and board. Including those costs it'll be around $22,000.

BTW, the same time tuition costs shot up almost 200%, Iowa median income stayed stagnant, from $44,000 to $48,000 (9% increase). So its not like our state is getting rich, or keeping up with inflation.

This isn't sustainable...and looks exactly like another bubble. Public universities were founded on the idea that helping college student costs is a public good. Now students are viewed as proxy cash dispensers for either 1) their well-off parents, or 2) future jobs. Most of the time it's probably #2.

Anyway, I've got 16 years to save up ~$160,000 for my kids.

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