Many investors are losing sleep over the wild swings in the market. But for many parents with young children, the truly dismaying numbers are evidence that the cost of sending their youngsters to college keeps going up. The latest figures show that average tuition and fee costs are increasing at about double the rate of consumer inflation. The total price tag for attending four years at the average public college, including tuition, fees, room, board, and books is more than $39,000, assuming the inflation rate remains the same. The comparable figure for a private school education is over $100,000. That's a lot of money even for parents of considerable means. Little wonder higher education is a hot topic in local and national political campaigns. What's behind the skyrocketing cost of a college sheepskin? There are many factors at work, from paying faculty better salaries to investing in high-tech gear. But among the most important reasons is this: The message is out that college graduates clean up in the new economy. For instance, in the 1990s, the inflation-adjusted earnings of workers with a college diploma rose by more than 18%. High school graduates lagged behind with an 11% gain. With two-thirds of all high school graduates now going on to college by the following fall, colleges can increase the price they charge consumers. It's easy to raise your price when your "product" is in great demand. The current system of paying for college is showing definite signs of strain. The biggest worry is evidence that the traditional gap in college attendance by income and race is widening. Still, until the financial aid system is overhauled, the burden is on parents to save as much as they can for their children's college education and on students to take on as much debt as they can.

 


FOR OTHER INSTALLMENTS OF CHRIS' COLUMN