Are We Overestimating the Cost of College?

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Everyone knows that college has become ridiculously expensive but there is finally some good news. Those cost estimates may be a little higher than we thought.

The New York Times ran a piece on their economics blog The Upshot in which they examine the way in which government estimates for college costs go even higher than the actual costs for four years of college. The Bureau of Labor Statistics tracks such prices and estimated that since 1992, the cost of a basic degree plan has gone up 107 percent making it the largest household budget item to increase since that time. That number may have made you jump out of your chair but it’s not as alarming as it seems.

The estimates didn’t take financial aid into account when compiling their statistics and only examined the costs for those who had to pay completely out of pocket and could afford to do so. That doesn’t mean that there hasn’t been a significant increase in costs since 1992. If you add scholarships and other financial aid assistance, the costs has risen by just above 50 percent for a public, four-year institution and around 25 percent for a private, four-year institution, according to cost estimates compiled by the New York Times.

The original numbers may be off and the Bureau of Labor Statistics’ methodology may be flawed but the truth remains that college has gotten more expensive in the last 20 years thanks to misguided spending plans and state budget cuts that put more financial burdens on the students and their families.

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