The University of Cincinnati approved its budget change, reflecting a tuition freeze for Undergraduates as well as a 30 percent reduction for out of state students. 2008 Law School Admissions are down almost 30 percent. Following basic economics, when the markets constraints are in equilibrium, these kinds of changes are necessary and are expected.
“Its supply and demand,” said Dan Bisig, founder of College and Beyond LLC which advises families on college search and financing techniques. According to WCPO news, the tuition increases directly correspond to the increases in demand. So when applications fall in rate, and empty seats are apparent, correspondingly the tuition will decrease, hopefully to incite more applicants. The in-state Pharmacy and Medical schools of the University of Cincinnati see steady demand and are also seeing a 14 percent and 1 percent increase in tuition respectively.
Dan Bisig states: “They’ve got so many spots to fill, they’ve looked at their numbers and saw an opportunity to bump the price tag. When you look at middle-class Americans paying for college, it’s getting tougher and tougher, it forces people to look at alternatives.”
Recent graduates everywhere may consider the role college plays in their lives, and whether or not it’s a ‘good’ investment. I had thought previously that cut and dried, no hands down, college was an investment that spoke for itself.
However, now the language of finance permeates everything. And though education and schooling and learning have a place, there is no question the cost is quite high.
A February NYT article considered degree inflation and how the Bachelor’s degree is the new high school diploma. Briefly it discussed how companies are expecting college degrees when considering roles that traditionally only required a high school education. Shortly following that, an April WSJ article discussed whether or not Bachelor’s degrees are even worth it anymore, relative to decreasing ROI and a floundering economy. Frustrated students everywhere rack up debt and degrees, even as the student loan segment of household debt is the highest it has been in more than a half century. For mature economies, there doesn’t seem to be an easy way out. In Japan, it is common knowledge that a Master’s degree may be a prerequisite for a part-time job in many cases. Japan has low unemployment generally; however, there are many social mechanisms that help the situation, like a non-dependence on critical technology. For people who haven’t been to a business office in Japan, it may seem the same with one exception. The use of computers is highly limited, and most calculations and spreadsheets are done by hand. In this kind of almost Luddite environment, surely America would also have a lower unemployment rate? And yet the unemployment rate for graduates under 30 in America is almost at 50 percent.
The current situation in the United States for higher degree aspirants the situation is even worse. According to USNEWS the average MBA debt taken is about 120K. According to BusinessWeek, the average MBA salary ranges from 90K to 115K. Yet according to salary.com, the average MTA bus driver’s salary ranges from 65K to 105K. Considering the opportunity cost and lost wages, immense debt from tuition, and cost of living, after a net present value of future cash flows, choosing a career seems more difficult these days. And the college argument versus the career argument after high school seems muddled, at least for those with average salaries. Not everyone is a statistical outlier. Ultimately the changes in tuition will give cause for concern across the board for undergraduates and graduate students alike, and may see some people wait for the economic upswing.