Is the Cost of College a Bargain?

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For more than two decades, as the cost of college has climbed at twice the rate of inflation, critics have argued that bloated bureaucracies, overpaid faculty, and unnecessary amenities are inflating tuition. Yet in a new book—Why Does College Cost So Much?—economists Robert Archibald and David Feldman argue that college isn’t actually overpriced.

The reason: although the total cost of attending an in-state, four-year public university has nearly doubled to $16,140 since 2000, the benefits that come with it have increased considerably, too. Indeed, over the same time period, the difference in wages between those who attend college and those who don’t has climbed by 20 percent.

Yet in the aftermath of the recession, a more important question is who’s losing out in the process? Even though aid packages have risen by more than 50 percent since 2000, one recent study found that college enrollment could fall by 3.6 percent due to the housing bust, which has made it harder for families to finance their children’s education.

“The prices are rising precisely at the time when minorities and lower-income families are having the most trouble meeting costs,” says Rucker Johnson, a professor of public policy at the University of California, Berkeley. In other words, college may still be a good deal, but its price is rising at a time when fewer people can afford it.

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