From WSJ (Subscription required):

Questions for students:

• Create a one sentence description for the trends seen in each of the two graphs.
• A friend says, “What a bummer that college costs keep rising at an incredible rate!” Using the data from the graph on the left, provide a response to her assertion.
• Since 1990, all consumer prices (aka the rate of inflation) have basically doubled. Using the rule of 72, make an estimate as to what the inflation rate has averaged from 1990-2016.
• What factors do you think could be leading to the recent shift in college costs?
  • For Econ teachers, there is a good supply/demand example to explore here where supply is the number of students in higher education.

Excerpt from WSJ article summarizing the trends:

U.S. college tuition is growing at the slowest pace in decades, following a nearly 400% rise over the past three decades that fueled middle class anxieties and a surge in student debt.

Tuition at college and graduate school—after scholarships and grants are factored in—rose 1.9% in the year through June, broadly in line with overall inflation, Labor Department figures show. By contrast from 1990 through last year, tuition grew an average 6% a year, more than double the rate of inflation. In that time, the average annual cost for a four-year private college, including living expenses, rose 161% to about $27,500, according to the College Board.

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Looking for more resources on college costs? Check out this NGPF Activity: Compare Sticker Price to Net Price

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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