Are Colleges Really That Expensive?

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Colleges are expensive, yes. There is little doubt about that. However, what we often don’t talk about are the other expenses associated with being a college student today. The “other expenses” are as “expensive” as college itself. Guess what? The majority of these extra costs are related to technology! Let me explain…

College tuition where I work at cost students $7,700 in tuition a year before room and board is added to the bill. Not a bad price in today’s market, is it? Since young adults have to pay rent and eat whether they are college students or not, I will not talk too much about housing and meal plans in this article. By taking this fair metric, college costs are really then the price of tuition, student fees and books which again, I believe is the true costs of education in the United States.

For the sake of simplicity, let’s assume that college students at university A spend 9K a year in “college only” expenses totaling a lifetime investment of 36K a year. Is it little money? Of course it isn’t but this value isn’t that far off from what the market will pay recent graduates when they leave the university with a degree in communications, on average. I predict student value after graduation to be between 28 to 32 thousand dollars in medium size to large cities. So in reality, students aren’t really making a very bad investment by going to get a college education as a 4K in upside down is in reality a negligible value, especially in a period of 15 to 30 years. I would be much more concerned if the value of tuition was 20K per year but let’s not forget that there are schools out there that cost you $7,700 a year!

Look, my problem with this debate isn’t necessarily with the price of tuition. I agree that tuition is expensive or should I say… Tuition is keeping up with inflation and depreciation of currency maybe both. I will let you think a bit about the former…

My problem is with constituents who talk about the large debt that students accrue without taking into account the brand new (or used) car payments they have, car insurance policies, speeding tickets received, gasoline, smartphone bills, clothes, beer… College debt is much more than college tuition and that’s a fact.

Today in my office, I calculated the “college expenses” of a student totaling 10K in extras! How fair is to say that college is bankrupting students when they themselves spend that amount of money in unrelated college expenses? Let’s not forget that folks can always find an on-line education option so driving shouldn’t be an excuse to have a car payment. The truth is that the cost of tuition is as much of a problem as the new attitudes of the millennials and their technology consumption expenses.

Students will spend four to seven years of their lives in college living as an adult and live fifty to seventy years of their adult lives as a poor college student. It will happen — but be aware that this reality isn’t necessarily because “tuition” is expensive. College students are also part of the problem as they spend a lot of money in expenses that simply don’t matter. College students need, more than ever, mentorship in finance an a big wake up call. I help my advisees and clients to save money during their four years of college. Are you saving any money from your college experience? Yes, No? A little bit? A lot? You better!

We are lacking caring professors who tell the students the things they need to know for life and students who are willing to look beyond the obvious and critically investigate their own circunstances in life. I took the stance to be pro-students but that’s just me. I do realize that my motto of “If you do what is best for the students, you will do what is best for you” isn’t for everyone but at least it should be considered as an option by many in higher education.

Take the lead and help students to realize that they are also part of the problem when it comes to student debt. They need to know that college isn’t as expensive as people say it is and that they themselves can help reduce their own “student debt” simply by reducing the extras (smartphone fees, device prices, car payments, insurance gas…) they opt to have.

There are additional variables that are not being accounted when one is calculating the value of a college education. As I said previously, I do believe that colleges aren’t cheap… They are far from being cheap but let’s also not ignore the fact that we have a 3% to 4% inflation a year plus depreciation of currency. Next time you hear someone telling you how expensive college is, engage them in discussions relating to the variables we discussed in this article.  It makes into a good conversation. Cheers!

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