More on the cost of schooling

On a recent post in reddit, someone else was complaining about the cost of schools in the US.

This is fairly similar to an earlier comment I wrote a few years back, but though I should post it here.

The question was about if the US actually supports students, why do so many people get expensive student loans. In some nations the cost to attend government-owned schools is often fully paid by the government. In other nations the government pays a large subsidy, but not the full cost. In the US it seems that many vocal people shout about how the acquired several hundred thousand dollars in student debt, often more than the cost of a home.


The US strongly supports citizens getting education. Millions of people use those programs every year. Unfortunately there are also many thousands of idiots willing to enter into hundreds of thousands of dollars of debt without considering the consequences.

There are (or were when the stats were published in 2010) 5758 post-secondary schools (colleges and universities) in the US.

Relative to most other nations, that is an extremely high number. Based on some quick Google searches, only India has more at around 8500. The next highest nations are Argentina (1705), Spain (1415), Mexico (1341), and so on. Many nations have only a double-digit number, or a low number relative to their population. The UK has 242 (the nation makes a distinction with 109 “university” schools and 133 “higher education” schools), Germany has about 70. Australia has 43, but considering their population that is actually relatively good.

Based on US government stats, the median cost as of 2010 is $2916 per semester. So half of the schools, roughly 3000 colleges and universities, charge less $3000 per semester to study as their baseline.

But the costs are not a bell curve. If you were to chart the number of schools by costs, the bulk of the schools are in a bulge in the low end, but the high end of the scale goes way, way, way up. It is a lump around $2000-$3000 with an extremely long tail going up to around $30,000 per semester. While MOST schools charge under $3000, many schools — especially the popular and private schools — charge much more.

A useful tool listing schools broken down by type, you can sort by cost.

Public schools tend to top out around $20,000 per year, or about $10,000 per semester. Based on that tool, about 300 major 4-year public schools, and nearly 900 major 2-year schools cost under $6000/year. (You can generally get an associates at a 2-year school then transfer to a 4-year school and continue for the remaining two years.)

That is extremely affordable for most people. Even if the student put the entire cost of the school into a student loan, their degree will cost less than an automobile and can be paid off within 5-10 years.

The private schools, and especially the for-profit private schools, are the expensive side of the chart. MIT is $21860 per semester. Harvard is $22000 per semester. USC is $23000. Scripps College is $23,700. Columbia University is $25,504. That is NOT affordable to most people. But many people still choose these school.

Too many young students look at the brand name, they look at the popular schools, they look at the schools with extensive sports teams, they look at the schools with famous people. But they never stop to look at the price tag.

That’s the primary side, the cost of education.

The second half is funding for students.

It is extremely easy to get scholarships and grants in the US. Nearly 90% of all students are receiving federal money.

Most people qualify for at least a few scholarships and grants if they take the time to apply for them. It is pretty easy to get federal grant money, typically $4000-$10000 per year. If students do their homework and maintain a B or B+ grade they should qualify for a few scholarships of $500 or more beyond those grants.

So getting a few thousand dollars is easy, and nearly 90% of students are getting that funding.

The difficulty is in determining just how far the money will go. That depends on the cost of the school.

If you get $8000 for a one year federal education grant, that will pay for the entire school year at an inexpensive school. It will only pay a portion of a single semester at an expensive private school.

So when you put all that together…

You get smarter people who figure out what they can afford, they apply for federal aid and for private scholarships, they search for inexpensive schools, and they work hard in school to learn all they can and earn good grades. Most people graduate with only a few thousand dollars in student debt, if they took on student debt at all.

But then you also get people who have very little money, they apply to the very expensive schools, then instead of looking for free grants and scholarships and free money they turn directly to student loans. Instead of paying $2000-$3000 per year after grants and scholarships, they voluntarily sign up for loans of $50000 per year. Assuming they graduate, instead of having either directly paid or taken out loans for $12,000 in school, they have $200,000 in loans.

Other people apply for those loans, as you pointed out in your original comment, they do not qualify for the loan. The banks are smart enough to figure out that $50,000 * 4 years = $200,000 which is far more than the individual is likely to repay in a reasonable time frame. But the young and foolish student does not understand this, crying out “I really want to attend the big-name school! Loan officers are so unfair!”

For me personally, I worked my way through school. I attended an inexpensive school for a bachelor’s degree, then went to a different inexpensive school for a graduate degree. I paid my living expenses and much of my tuition directly. I maintained high grades and received both grants and scholarships. When I was finished, I had about $8000 in student loan debt that I was able to pay back quite easily.

I have met and talked with people who are too financially illiterate to attend school. They complain about having signed for over a hundred thousand dollars in student debt. They made foolish decisions, often attending school for 3 years, or 4 years or 5 years before being dumped from the program. Occasionally there are protesters who hang signs on their necks to show their enormous student debts; I see those signs and interpret them as saying “I’m too stupid to get a university education.”

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