Michigan Increases Tuition 3.9% In-State, 4.4% OOS
Per Mlive, Michigan is increasing tution by nearly 4 percent this fall - 3.9 percent for in-state students and 4.4 percent for OOS students.
http://www.mlive.com/news/ann-arbor/index.ssf/2016/06/u-m_tuition_story…
The increase puts freshman tuition and fees for Michigan-residents at $14,402 in the lower division — up from $13,856 in 2015 — and $45,410 per year for non-Michigan residents — up from $43,476 last year....and this does not include room and board, which is also being increased.
http://www.mlive.com/news/ann-arbor/index.ssf/2016/06/u-m_students_face…
Here's U-M's recent tuition history:
2016-17: $14,402
2015-16: $13,856
2014-15: $13,158
2013-14: $13,142
2012-13: $12,994
2011-12: $12,634
2010-11: $11,837
2009-10: $11,659
2008-09: $11,037
2007-08: $10,447
2006-07: $9,723
Out of state tuition
2016-17: $45,410
2015-16: $43,476
2014-15: $41,578
2013-14: $40,392
2012-13: $39,122
2011-12: $37,782
2010-11: $36,001
2009-10: $34,937
2008-09: $33,069
2007-08: $31,301
2006-07: $29,131
Michigan is hardly alone with tuition increases, Recently, about half of all students, undergrad and grad, are not from Michigan.
If you want cost of attendance numbers, here's the link, and it is not pretty:
I've already told my daughter that she will need to get a scholarship for college. She's only 1, but I think she understands that financing an education at these unsustainable price increases just isn't feasible.
Saving what you can now will still help her. even if it's just a little bit at a time. It adds up over 17 years.
Yeah, in all seriousness we are already saving a bit, hoping that the miracle of the markets (not the miracle of compound interest, which is nothing these days) will help us out over the next 17 years. I think it's still going to be a drop in the bucket, but it's something.
"not the miracle of compound interest, which is nothing these days"
Uhhh.... what do you mean by that?
17 years is plenty long enough to have compound interest do its work. Outside the 2000s (-1% growth), every decade since the 1950s has seen the S&P500 grown by, minimally 6% annually. In fact, in many decades the average annual growth was double digits.
http://www.simplestockinvesting.com/SP500-historical-real-total-returns…
Throw $5,000 into an index fund, conservatively count on 6% return on investment (after fees, inflation adjusted) and in 17 years that $5,000 becomes $13,000. That's not counting additional deposits.
"What can't go on forever ... won't."
Eventually this mode reaches a limit and breaks. It's not just Michigan.
We are rapidly approaching the point where the cost of a college education does not provide the return. Some would argue we are past that point. For some majors it's certainly the case.
It's certainly already at that point for out of state students; especially for a lot of LS&A degree programs. An out of state student coming in for something like a degree in the arts is coming out with $200,000 in debt. That's insane, there's no way most will be able to pay that back within any reasonable amount of time. That's something that is going to stick with most graduates for most of their life.
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It's beyond insane. If you attend Michigan and go to med school as an OOS student, it will cost you 235,832 for undergrad and 315,385 for med school per cost of attendance figures that I just looked up. That's 551,000, largely after-tax dollars, and I suspect from having just put two kids through Michigan, that the numbers are low.
You are either going to be paying the equivalent of a big mortgage virtually forever or you better have considerable family wealth. Either way, this is a disaster that gets worse by the day.
College level education needs to be redone from beginning to end.
I'd like to know what the average actual cost is for students. I know that I had a nice fat $3,000 per semester grant from UM just from the general scholarship fund. Didn't apply outside of filling out the FAFSA, just got my small chunk from the scholarship endowment.
What percent of students receive a chunk from the endowment? What's the average amount for students that receive a chunk? Is it different for in-state vs. out of state?
Those are significant question I, unfortunately, don't have the answers to.
Agreed, We are already starting to see the end of the free-for-all in pockets here and there.
Many lower-tier institutions can not justify the increases any more, and many majors in all institutions can not justify it.
It is still being floated by many international students who value the prestige of an American college education, but there are only so many of them to go around.
It's supply and demand. Universities - rationally so - kept raising their expenses and their prices . . . because they could. Now they can't. They will have to adapt to a 2% growth world like countless other organizations have for the last decade.
Elite institutions like Michigan will be on the tail end of this trend, but they will have to deal with it eventually.
You can't keep raising prices at double the rate the rest of the country can forever.
The Ironic thing is that many of those international students can get a college education for next to nothing in their home countries.
But it's often mediocre compared to top American universities. Even if the US has fallen behind in a lot of sectors, like manufacturing, we are still the cream of the crop when it comes to good higher education. I hope we can maintain that.
What good is that cream when increasingly more and more people have no chance at being able to afford such education? We're not there yet, But if things keep going the way they are by the time I die higher education will have become a luxury only enjoyed by the aristocracy types.
Hey, I'm with ya. I'm just saying that it make sense for an international student with the means to afford it, to come get a good US education, even if their alternative is Mediocre National Institute of X at only $500 per semester.
A US university education is a status symbol in many foreign countries. There are many cases where the local cheap/free education is very good, but parents still send their kids to the US for college for the prestige of it.
It's a de-facto luxury item like a Mercedes Benz versus a Honda Accord. The Accord will do just fine, but there's no panache to show off to your friends.
That can be true, but it is not the reason why college tution has steadily outpaced inflation for decades.
You're saying tuition hasn't outpaced inflation because of foreign students? Maybe, but I actually think it is a mult-factorial problem and wealthy foreign students willing to pay whatever price is part of the problem. Like most complex problems, there are a lot of different reasons this has come to pass.
http://www.motherjones.com/politics/2014/09/college-tuition-increased-1100-percent-since-1978
http://www.savingforcollege.com/tutorial101/the_real_cost_of_higher_education.php
"According to The College Board®, the average 2014-2015 tuition increase was 3.7 percent at private colleges, and 2.9 percent at public universities. However, looking back at the last decade, the 10-year historical rate of increase is approximately 5 percent.
These figures are substantially higher than the general inflation rate, and also higher than the average increase in personal incomes."
is in the right general direction, but still off in specifics.
I attended/graduated in the 80s. In those days, the net present value of a college degree was so positive that attending was a slam dunk decision from the top tier institutions all the way down to the bottom quartile. Tuition was just starting to become unmoored from a reasonable facsimile of a cost-plus determinant.
But concurrent with the changing dynamics of college sports, big money became the driver. Tuition/Ticket Prices were raised because they could be raised, and since the money had to go somewhere (Taj Mahal facilities on campus/for non-revenue sports, administrative staff), it did.
College is still projected to be a positive net present value investment for the typical student, especially at elite universities, but due to the tuition extracted from the student, the risk of a negative NPV has skyrocketed.
Attending college is no longer the slam dunk decision it was for everyone back in my day.
Unfortunately these days, for as little as most college degrees actually teach you about the professional working world, they are essentially a prerequisite for almost any job that can get you anywhere. And now with so many people applying to, and going to college, a lot of positions won't even consider you unless you have a masters degree, as a way of thinning out the herd.
Unless you're savvy and street smart enough to start your own business after high school, or you're in the great fortune of being able to go into a family business with a position lined up only for you, colleges know you're basically screwed w/o any kind of degree to your name. They'll keep raising the rates until people stop going. And considering that most of us need a degree to get any semblance of a decent job, they know they can continue getting away with it for a while.
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College is mostly about signaling to employers that you are intelligent and motivated. To a lesser degree, it is also about making connections needed to get a job. The irony is that as college has gotten more expensive it has become easier than ever for a smart and motivated person to use online materials and other free resources to teach himself enough to perform well in an entry level position in most science and technical fields.
As soon as employers realize that they are choosing to employ grads based on signaling rather than actual ability--which I think is coming, albeit very slowly--then it will open the doors for those who are capable but not "credentialed" to get good jobs right now. This will start to make college less indispensable and hopefully drive costs down for everyone.
Figuring out why costs continue to grow in the first place (i.e. where is that money actually going) is a somewhat harder queston, but I think it can be addressed.
As was said above, costs continue to grow because they can. As long as universities can bring in the revenue to cover their ever-rising spending budgets, they will keep raising their budgets well beyond the rate of inflation.
It's very much like Athletic Department budgets. They will keep going up and up until the money runs out.
And it will eventually run out. All bubbles eventually burst.
For some majors it's certainly the case.Though to be fair, many jobs/grad schools do not necessarily care what your specific major was in undergrad, as long as you meet whatever their requirements are.
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He'll pay it off quicker by passing those cost off to us.
Why are universities looking to put up such a financial roadblock to those who would seek to provide services that are most beneficial to society?
Eh? 1.2k is 1/4 of your income per month as a doctor? What speciality is that? That works out to ~120k pre-tax income. That's on the extreme low side for a doctor. I know multiple doctors that finished in the last couple of years where their starting jobs are all in the 250-500k range.
That's what any self-interested entity does.
Would a market-based approach be better? Shouldn't Medicare just step away from the weird subsidiy/free labor situation and let the hospitals and AAMC sort it all out?
Medical resident pay is fucking bullshit.
It should be 100% market based.
Entry to associate level investment bankers work the same amount of hours and make 3-4x the amount that residents do and one could easily argue that medicine > finance in terms of societal importance.
It's absurd.
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That's what mine are and still miles away from 10%. At 6.7%, if you have good credit you can refinance those through companies like SoFi for significantly lower rates.
Problem lies in law school grads and undergrads who are in social work, human resource, teaching, and the like. They don't start out where medical professionals do and they are not able to pay back the debt as quickly.
Small note on teachers: The Public Service Forgiveness Program applies to just about any primary and secondary education job. The program allows you to forgive the balance of your loans after making 120 payments (10 years). The payments can be income-based payments; 10-15% of your disposable income. The catch is you have to be working at a qualifying job for each of those 120 months, but basically any non-profit and not-for-profit applies.
If you make less than $50,000, you can essentially pay about $400 a year in student loans for 10 years and whatever balance is left is forgiven. More likely, though, your first several years your income-based payment will be much, much less. Maybe around $250 a month. So, say you average an income-based payment of $375 over 120 payments. That's $45,000. Whatever your loan balance is, you only pay 45k.
Not bad.
However, the program started in 2008, so we've yet to experience people actually finish it... So... we'll see.... I'm counting on it, with some safety nets in place (investing the difference of what my accelerated payments would be in a Roth IRA).
I was surprised at how small a % of its funding the University of Michigan gets from the state. It was something like 8% when I last saw the numbers.
We might as well go private and call ourselves the University of Harbaugh.
What are the drawbacks? Asking seriously.
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It must have been awesome to see Yost's teams work their magic.
When we last one a national championship it was ~20k. Which was reasonable if you were in say engineering and starting jobs were in the range of ~60k. Current out of state pricing is just this side of insane.