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Articles / Paying for College / The $500,000 College Degree

The $500,000 College Degree

Dave Berry
Written by Dave Berry | Aug. 6, 2015

And you think today’s college costs are unreasonable. Well, hold onto your hat. As Ronald Reagan used to say, you ain’t seen nothin’ yet!

A recent Forbes article by Troy Onink begins with this sobering statement:

If you want to pay for one of the top 100 colleges on Forbes Best Colleges list in 18 years, you better start saving early and often. Most of the elite private colleges today are already over $60,000 per year and increasing in total cost at about 4% per year. If you do the math, your child’s projected four-year college costs will be year 1: $121, 549, Year 2: $126,411, Year 3: $131,467 and Year 4: $136,726 equaling $521,153, or to simplify – a cool half of a million dollars!


This message is for all couples out there who have just welcomed a new baby into your family. Obviously, that half-million-dollar price tag is a “sticker price” and does not take into account both need-based and merit-based financial aid, scholarships, and other discounts. However, the Big Threat lurking within this story is student loans. I’ve ranted on before about how student loan debt can lead to a lifetime of misery if left unchecked, and that’s with today’s current sticker price hovering around $250,000, half of the projected cost 18 years down the road.


Of course, escalating college costs have been classified as a “bubble” frequently, which implies an impending burst, much like what happened to the dot-com bubble of the early 2000s. What will happen with college cost over the coming decade or so is anyone’s guess. However, the big caution those of us, who are hoping for a burst, should acknowledge is that the so-called Top-100 schools Forbes mentions are currently happily turning away a significant majority of their applicants. As long as people are willing to pay the freight, the bubble is going to keep expanding.

As if to take the edge off my above statement regarding “sticker price” … does not take into account both need-based and merit-based financial aid, scholarships, and other discounts,” Onick issues this warning:

If the $500,000 headline wasn’t enough of an alarm, please realize that many of the elite colleges DO NOT OFFER ACADEMIC SCHOLARSHIPS FOR GOOD GRADES AND SAT SCORES. You’ll pay sticker price unless your family’s finances are such that your child will qualify for need-based financial aid.

When Onink says, “unless your family’s finances are such that your child will qualify for need-based financial aid,” he’s pointing out one of the few “perks” of being low income. In general, if you’re family income is in the $50K or less range, you may be surprised how affordable seemingly UNaffordable schools can be. Anyway, the point for most starting-out families is: Buckle your seat belts and your wallets.

To sample the pulse of the College Confidential discussion forum’s generally highly informed members, I posted a thread about Onink’s article. Not unexpectedly, it inspired a strong response. Let’s take a look at some of the reactions.

– I remember visiting colleges in 2009 and 2010 and collecting brochures where most were just breaking over 50k. Now there is rarely one under 60k. … Strike that. Some are inching closer to 70k.

– Something will have to happen between now and then or the cost will simply become too prohibitive to allow the near-inelastic demand to continue. And not enough people will be able to gain admission to the elite schools that provide a lot of need-based aid. The future looks dire if the cost increases continue to outpace inflation by 200%+ (unless wages also begin outpacing inflation…).

– I wonder how much would be the average instate tuition at the current rate of increase per year. In state tuition, room and board is about $30,000 in some states now.

What would be the predicted costs for example for an out of state student applying to University of Michigan in the future. It is quite high right now. I’m sure in state and out of state tuition fees for state schools would increase quite a bit as well.  

– It is outrageous at some level although, if one is dedicated enough, one can get merit aid by making crazy test score numbers and having a high GPA regardless of socio-economic status. I guess that is as fair as it gets. Elite universities can’t be for “everyone” after all. But I must admit, at 50+ or 60+ or 70+ it is just unattainable and probably stupid to even think about schools like that for most folks. That is the sticker price, after this and that discount, you are still on the hook for 30+ or 40+ a year and you might have debt for the rest so you didn’t really avoid the cost you just delayed it. There is something profoundly disturbing and wrong with that picture regardless of what the market will bear.

– My S went to a very good school that is in the top 20 but a school which anyone applying to HYPMS would think of as a “safety.” They give only need based aid, no merit aid. With an income between $120K-$130K/yr my S was given $160K in aid over 4 years – bringing the cost to us down to $80K – the exact same amount it would have cost us to send him to an instate SUNY.

– The historical numbers and their subsequent projections do not look great for middle class families. In my case, I am greatly concerned by what will happen in 20-25 years. I already know that it would take half a miracle to duplicate what my parents could afford in terms of education. And that does not relate solely to college as the cost of private schooling has also become extremely expensive. For some the cost of private K-12 is higher than college.

Okay. You should read the remaining posts to get some good insights.

As for these most-expensive schools, does price necessarily equal quality of education? There’s an excellent, older article out there from Inside Higher Ed about Not Getting What You Paid For, by Scott Jaschik. It addresses this issue. Here are some key points:

“Everyone knows there’s a reason the most expensive colleges in the country — generally private residential institutions — charge so much. The money they spend on hiring the best faculty members (full-timers of course) and on keeping student-faculty ratios low results in a higher-quality education. Right? …”

” … The Wabash National Study (also done by the center Blaich leads) tracks 45 colleges and universities, most of them liberal arts colleges, but also other kinds of institutions. The study is designed to identify measures of good practice that result in students at all educational levels learning more. Four such practices (for which there are scales) are “good teaching with high quality interactions with faculty,” high expectations and academic challenge, interaction with ideas and people different from one’s own, and “deep learning” through characteristics identified by the National Survey of Student Engagement. …”

” … The result was that there was only a very small relationship between spending on education and the quality of the educational experience as measured by those four factors. The relationship is so small that Blaich said that a college would have to spend an additional $5 million per 1,000 students to increase the “good practice” score (on a scale of 100) by a single point. …”

Again … Yikes!

There are a lot of quite thoughtful comments following Jaschik’s article that are worth reading, although if you’re targeting one of Forbe’s Top-100 schools (or an equivalent), you may find yourself in a serious quandary about your education dollars’ ROI.

Welcome to higher education today!


Be sure to check out all my college-related articles on College Confidential.

Written by

Dave Berry

Dave Berry

Dave is co-founder of College Confidential and College Karma Consulting, co-author of America's Elite Colleges: The Smart Buyer's Guide to the Ivy League and Other Top Schools, and has over 30 years of experience helping high schoolers gain admission to Ivy League and other ultra-selective schools. He is an expert in the areas application strategies, stats evaluation, college matching, student profile marketing, essays, personality and temperament assessments and web-based admissions counseling. Dave is a graduate of The Pennsylvania State University and has won national awards for his writing on higher education issues, marketing campaigns and communications programs. He brings this expertise to the discipline of college admissions and his role as a student advocate. His College Quest newspaper page won the Newspaper Association of America's Program Excellence Award, the Pennsylvania Newspaper Publisher's Association Newspapers in Education Award, the Thomson Newspapers President's Award for Marketing Excellence and the Inland Press Association-University of Kentucky School of Journalism and Mass Communications Inland Innovation Award for the Best New Page. His pioneering journalism program for teenagers, PRO-TEENS, also received national media attention. In addition, Dave won the Newspaper Association of America's Program Excellence Award for Celebrate Diversity!, a program teaching junior high school students about issues of tolerance. His College Knowledge question-and-answer columns have been published in newspapers throughout the United States. Dave loves Corvettes, classical music, computers, and miniature dachshunds. He and his wife Sharon have a daughter, son and four grandchildren.

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