Tuition costs at U-Va. had already been growing rapidly. A decade ago, the price, excluding room and board, was just over $4,000 for in-state students and nearly $17,000 for out-of-state students per year. Now it's nearly $10,000 and $32,000, respectively.
Even before the financial crisis intensified the upward pressure on college costs, the price of a degree was soaring. Since 1980, the average cost of tuition and room and board has grown by a staggering 121 percent while median household income has risen a mere 18 percent, according to federal data. But the credit boom earlier this decade provided some relief for families.
Wall Street financiers packaged student loans into securities and sold them off to investors, who could trade them just like stocks. That, in turn, provided more money for lending, helping to make student loans cheaper and more available. Even people with poor credit histories could easily get a loan.
Gee, where have I heard this story before? Let me think... oh yeah. I remember. This was the very same story behind the housing bubble and the ridiculous run-up in real estate prices.
Some educators worry that college programs will sacrifice quality to contain costs or become limited to those who can afford it.
"The big macro question is: Will we have to sacrifice the quality of education, or the access, based on talent rather than the ability to pay?" said Marx, the Amherst president. "Either of those make America less competitive for the next generation."
Horseshit. If people can't afford your product the price will drop, Mr. Marx. I suggest you get your spending priorities in order right away.
They get no sympathy from me. Far too many American families commit financial hari-kiri because Junior MUST GO TO COLLEGE AT ALL COSTS, even if Junior wants to do something else with his life. Like... dunno... maybe be an auto mechanic. Or a plumber. Or run a restaurant.