College education is smart investment

Originally published in 1/22/02 editions
of the (Northwest Indiana) Post-Tribune

Students and parents are understandably concerned about the cost of attending college. Most Americans understand a college degree is important for a satisfying life and for financial success, but they also know it is a goal that requires preparation, planning and financial sacrifice.

For students and parents, the stakes are high. Over and above the concerns families have for the future, media reports of prestigious private colleges and universities that charge tuition exceeding $100,000 over four years may create the impression that higher education is not affordable.

Although more than 20 percent of American colleges and universities charge more than $20,000 per year for tuition, the average tuition at a public college or university is about $3,500 per year, or around $14,000 to attain a bachelor's degree. Tuition at Purdue University Calumet is below the national average.

Still, the price of tuition has increased at a rate that outpaces the cost of living. Universities must continually buy new computers and laboratories to prepare students on the equipment they will use in their jobs. We also must compete with other universities and private industry to hire the most talented and effective faculty.

Another source of the rising cost of college is the expansion of student services to increase the likelihood students will stay in school and graduate. Fewer than half of all students who start in baccalaureate degree programs graduate. To help students earn their degrees, we must offer stronger support programs.

Because we understand the price of education is a major expense for students and their families, we always ask ourselves whether tuition increases are a good value. Is it better to hold down the price and limit the quality and effectiveness of the college experience, or to increase the price so more students can be educated? This is a question for educators, but it's also a question for students and families who must pay for college experience.

To evaluate one's investment, it is important to remember that the price of tuition is significantly less than the cost of education. At Purdue Calumet, Indiana students pay about 44 percent the cost. In other words, the state (and other sources) subsidize more than half of the cost of attending our university. For every $100 you pay toward your education, others pay $127.

But even if spending for tuition is a wise use of your dollars, is it affordable? Every family must answer this question based on its own circumstances. As noted before, the cost of tuition at a public, four year university is, on average, $14,000 over four years of full time study. To put this in perspective, that is less than the price of a new, modestly equipped, minivan or small pickup. While this is significant investment, it is not beyhond the capacity of most families.

Another way to think about this is the average undergraduate student graduates with a debt of less than $20,000. At our university, 60 percent of the most recent graduating class graduated with no debt, and the average debt for the other 40 percent was about $13,000 - the debt level for a small automobile.

Some additional good news is that the price of a college education can be managed with scholarships, loans, tax rebates and campus employment. At Purdue Calumet we provide almost $700,000 in scholarships annually. We also help students arrange grants and loans. Work-study and campus employment are also available.

Is a college education worth the expense and effort? In addition to the obvious benefits associated with personal growth and intellectual development, studies show college graduates have considerably more earning power over a lifetime than high school graduates. The difference in earning capacity is estimated between $600,000 and $1 million.

In other words, a college education is less an expense that it is an investment.