By Isfar Munir, Contributing Writer

Student loan debt continues to be recognized as a major issue in the United States, along with the soaring growth of college tuition costs. It wasn’t always this expensive to get a degree, but despite these new costs, college enrollment continues to increase. A projected 3.9 million more people enrolled into full-time undergraduate programs in 2016 as compared with 1990, representing a jump in enrollment of a little over 55% (figured based on NCES published figures). Sure, the population of the United States has increased as well, but not at anywhere near this rate. While all of these students have indeed, managed to find a place to go, top colleges and universities have seen their acceptance rates plunge.

Some would say this is great, as a more educated workforce is a necessity for future growth. Personally, I hesitate to call it such a great thing. Let’s talk a little bit about cost.  The similarity between tuition rates, particularly among private schools, is frightening. If we account solely for tuition plus room and board, Harvard University charged roughly $60,000 last year. Most would agree that once you factor in professor quality, alumni network strength, and prestige, Harvard represents a better choice than, for instance, Santa Clara University. At least to me, it’s astounding that Santa Clara would charge more than Harvard; hell, it seems odd that Santa Clara would charge anywhere near the same price as Harvard. But sure enough, Santa Clara University costs a whopping $61,000 per year. For some people, Santa Clara University is a great choice, but I have difficulty accepting that it is a better choice for a majority of students. And if you get what you pay for, Santa Clara seems to be overvaluing its education.

Of course, sticker price is not what is typically charged. Many, perhaps even most, students attending private schools receive financial aid. Thanks to the College Scorecard rolled out by the Department of Education, we now have a better understanding of the average costs after financial aid across different institutions. These financial aid numbers probably aren’t the absolute best, but they can be helpful, and are pretty standard. The cost represents how much is charged, on average, to recipients of federal financial aid attending a given institution (note that Federal Stafford Loans are counted as aid), after all financial aid given by the school itself, the state, and the federal government is subtracted from the sticker price of the school. Harvard ends up costing a little over $14,000 on average for aid recipients. If we look at only those whose family income lies between $48,000 and $75,000, the average cost falls to just over $5,000. For the same set of people (Federal Aid Recipients), Santa Clara University charges in excess of $34,000 on average. For those that fall in the aforementioned income bracket, the average cost is slightly north of $27,000. Santa Clara University charges over twice what Harvard does for the average aid recipient. The current median income in the United States is just over $50,000 per year. For someone making closer to that amount of money, Santa Clara University charges over 5 times the Harvard rate. If we look at other highly prestigious schools with smaller endowments than Harvard, such as Johns Hopkins and Duke, the cost for those who earn close to the median income in the United States is about $15,000 and $14,000 per year respectively (the average cost at both Duke and Johns Hopkins is about $27,000).

Now for the kicker. When you pay for a college degree, you have a reasonable expectation that the degree can be parlayed into a well-paying job. College Scorecard can help us here too; it gives the median annual salary for students 10 years after they graduated. We must note that these salary figures are limited to a pool of federal aid recipients, meaning that the salary figures for very wealthy students who didn’t receive any aid aren’t reported. This is an important limitation to our numbers, but as a median, this figure is less skewed to start with, excepting students who are still in graduate school six years after they graduated (assuming they graduated on time) and well-connected persons that hit the salary jackpot. And besides, if college is the great equalizer, whether or not one received financial aid as a student shouldn’t really affect how much salary that person makes later on. The average salary incomes reported by our prestigious schools of Harvard, Duke, and Johns Hopkins are about $87,000, $77,000, and $69,000 respectively. At Santa Clara, the salary figure is just under $68,000.  While this is a perfectly respectable salary, consider how much more it cost for the average aid recipient at any of the other three schools I’ve mentioned. A John Hopkins degree can be expected to bring nearly the same income as a Santa Clara University, but costs roughly 20% less than the Santa Clara degree for the average aid recipient, and nearly 50% less for someone whose family makes roughly median income.

Santa Clara University is comparatively expensive, and I’m sure there are people perfectly willing and able to pay for it without incurring much debt at all. That being said, Harvard, Duke, and Johns Hopkins are all more likely schools of choice for America’s wealthy. And the far more selective schools are the type of schools that wealthy students are able to attend, having  had  access to the type of  education that makes them attractive to top schools. The students who attend Santa Clara University, on the other hand, are, in general, less well off than the average Harvard or Duke student. We can infer that the student who goes to Santa Clara, as such, is an aid recipient, and a member of the exact class of people that is paying the most for their Santa Clara education relative to what they would be paying if they had gotten into a better school. What’s the point I’m trying to make? Students are paying far more at Santa Clara for a lower post-graduation income than what other prestigious schools charge in exchange for a higher income post-graduation.

All right, maybe Santa Clara University is ripping students off. But are we? I’ve thrown around a lot of numbers, so I’ll tabulate them all now. In addition to the schools I’ve already discussed, I’ll throw in Haverford, Bryn Mawr, and, for good measure Swarthmore.

The salary and cost figures refer back to what I’ve described in the previous paragraphs. I’ve included exact numbers. I’ve also created this Salary to Cost Ratio and applied it once to the average cost for aid recipients and once  to the cost figure for those that fall in that Median Income containing bracket of $50,000-$75,000. The ratios don’t mean anything in exact terms, but are useful as relative indicators of how much income you can be expected to receive on average in comparison to the cost of these schools. Before I tackle the Tri-Co, let’s use Harvard as an example. Harvard does freakishly well on both ratios. It’s clearly a really good deal, but, then again, we probably could have guessed that from the get-go.

As for the Tri-Co schools, after their addition we add median salaries that fall below the previous low-salary king of Santa Clara University. Swarthmore is the only school with a median salary below $50,000 per year. Considering that all of the Tri-Co schools have sticker prices in excess of $60,000 per year, it would be easy to say that the Tri-Co education doesn’t seem to be worth the price of admission. However, when we throw the cost factor back into the mix, the picture changes.

Haverford ends up doing quite well in this analysis, with the lowest cost and highest salary post-graduation of the Tri-Co schools. If we look at just general aid figure alone (not the one for median income families only), Haverford even beats out the much wealthier John Hopkins by about 13% and Duke by 8% on the ratio figure. In fact, in this limited selection of schools, Haverford is second only to Harvard in ratio of net-cost to post-graduation salary. When we look at Median Income aid figures, Haverford falls below again, with Duke and Johns Hopkins, although its’ numbers remain quite respectable.

Bryn Mawr represents an odd case; it’s the worst performing school when just the average aid instead of aid to the Median Income bracket is considered, even worse than Santa Clara University. The ratio jumps significantly when we consider aid to the Median Income bracket. Bryn Mawr is providing money where it counts (unlike Santa Clara), but at the expense of what I would consider a raw deal for many. For a school of Swarthmore’s reputation, the numbers don’t outperform Santa Clara University by a massive amount (5% and 12% respectively). While Haverford is the supposed “safety school”, I would say it’s the smarter financial choice compared to Swarthmore.

Now I want to look at another factor: the growth in enrollment of undergraduate students. The number of prestigious institutions that have large endowments that generally work as a gateway into a well-paying job hasn’t significantly grown in number since 1990. Yet there is currently an insatiable demand for college degrees, which leads more students into institutions that historically don’t lead to the highest of salaries, and worse, don’t have the resources to offer the best in financial aid. These non-competitive degrees are more likely to result in debt, and these degrees lead to underemployment relative to what would be needed to manage the debt taken on to earn these degrees. This is compounded by the rapid growth in the number of college enrollees; while there are more jobs now that require college degrees, I am skeptical that there are enough to absorb all of these new college graduates. Given the supply of people with degrees, regardless of institution, the salaries these degree-demanding jobs would offer would be deflated.

Is this the only cause for the student debt crisis in America? No. Should the value of a college degree be based solely on expected income? No. But it is utter madness that an ever growing cohort of students is being charged more money for what is in all likelihood a lower salary later down the road. The cost of college degrees, at least in part, should relate to their future benefits; an education is an investment, after all. Many college degrees, both at sticker rate and actual rate, do not fairly reflect their future value. As for the Tri-Co, while the post-graduation salaries would appear to be lower, the after-cost value remains high. Liberal arts colleges still have a great deal of value where it counts.

From the print edition published Oct. 5, 2016

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