Dear Mr. Econ,
What happened to the American Dream of a college education and home ownership?
– Anonymous Iguana Reader
This is the third part of a three-part series addressing the reader’s question about the American Dream. In this installment, Mr. Econ tackles college education.
Now let’s look at the specific factors, in addition to the general ones, that place a college education beyond the grasp of many middle class people.
The basic factor here is price. The price of a 4-year college education has skyrocketed. From 1980 to 2010, the estimated cost of earning a 4-year degree has risen from $ 2,550 per year at a 4-year public college/university, or $ 15,014 at a private school, to $ 5,594 and $ 32,800 in 2010. Increases of around 490%. At the same time, middle class wages and their purchasing power are stagnant or falling. Further, during this period, the consumer price index role only 165%.
So we need to take a look at the components that contributed to this astronomical cost increase of a 4-year college degree.
One of the main factors is the decrease in government support for higher education. At major state colleges and universities, state legislatures have drastically cut back the support they have provided to 4 year state institutions. We can see this locally in the more than $ 38 million that was recently cut from the University of Florida’s budget by the state legislature. UF is not alone.
In addition, Federal spending on higher education has been stagnant, with the exception of the increases from 2009 through 2011 due to the American Recovery and Reinvestment Act. According to the National Center for Education Statistics, federal funding has fallen from a high of about 18% of a college or university’s revenue to below 10%.