Why College Is So Expensive In America

Why College Is So Expensive In America

College in America: it’s four years
of all nighters, keg stands, ethnically diverse welcome brochures, Pinterest
perfect dorm rooms and crushing student debt. I have $69,812, $47,000,
$90,000, $35,000, $350,000, $60,000 worth of student loans. My
minimum student loan payment is $1,000 a month. It should take me about 10 years to
pay that back, I will be roughly 36, 45-years-old, I don’t know how old I’ll
be when I pay that off. I was actually on campus at Penn State and I
saw that I had so much to pay and it just was overwhelming. I didn’t know how
to do it, I never saw a number that big. I just went to school for
a few months found out that it was not what I wanted at all, and now
I have this forty thousand extra dollars that I have to pay and nothing really
to show for it. If I wasn’t paying this student debt, oh my God, I would
just invest all of my money. It feels like I will have a roommate for the
rest of my life because my debt is so much. You can’t point at someone
and say, this person made your student debt load so much more, it’s the
whole system. So why is college so expensive, and is it worth it? Higher
education today is made up of three main sectors. They all bring in money
from tuition but where they get the rest of their revenue varies. Public schools are your state schools
like SUNY or Iowa state. They get money from the government. Private
for-profit schools like the University of Phoenix or Capella University
get money from shareholders. And private non-profits are those like Yale an
American University, they get a lot of their money from donors. More on
that later. But choosing a college hasn’t always been so complicated. In
1636, America’s first college was founded. You might have heard
of it before, Harvard University For hundreds of years college in America
was a pretty exclusive club to get into. But we’ve come a long
way from Harvard’s first graduating class of just nine men in 1642. In
2018 more than three million Americans were expected to receive a college degree. The demographics of American
higher education have been utterly transformed. In 1944 the G.I. bill was signed
into law giving veterans money to attend school. The G.I. Bill of Rights looks
after the money end too. That’s right. Tuition is taken care of. Funds
are provided for laboratory fees, books, supplies and equipment are included. Just a few years later, nearly
half of Americans enrolled in college were veterans. You cannot underestimate the G.I.
Bill. This educated an entire generation of men and some women too. And
it opened the doors people who hadn’t even thought that they might go to
college. The G.I. Bill changed what American families could aspire to. But not everyone was able to take
full advantage of the bill’s benefits. It was significantly harder for women and
people of color to get the tuition money and enroll in college
because of the widespread discrimination by both schools and banks. Dateline Russia 1957. In a moment the story. In the
50s a little beach ball sized satellite launched into space by the Soviet Union
had a big impact on the American education system. The first Sputnik. People were worried
about this clash between the Soviet Union and the United States. And
suddenly it was popular to study science and math. It was patriotic. In the 60s the civil rights movement
helped push the doors open even wider to give women and people of
color access to higher education. In those years students at University of
California schools paid less than a thousand dollars in registration fees. No
tuition if you were a resident. But with the 70s
came the taxpayer revolt. If you want something you pay for it.
Don’t expect me to pay for it. It’s your problem not mine. And so
what happened was the student loan process exploded. And then came the
U.S. News and World Report. It was one of the luckiest
or most ingenious publishing decisions ever. In 1983 U.S. News and World
Report published a list of America’s Best Colleges. It became a highly data
driven ranking. Every one of the criteria that U.S. News used
depended on name recognition, traditional quality, prestige and most of all
wealth. Rankings played a big thing for me. I was an athlete and
so I was pretty competitive. There have been a ton of new lists
since the 1983 ranking but the U.S. News and World Report still reigns king.
And colleges keep a pretty close eye on it. If you ask them they will say they
pay no attention to it. But within the conference rooms of the admissions
office and provost offices across the land, I can assure you they
pay very close attention to it. One thing they’re paying attention to
are their test score averages. By the 90s, colleges started boosting base tuition
and using the extra money to give merit based scholarships to kids
who tested well. The chief data strategist at U.S. News and World
Report downplayed test scores as a major factor in their ranking, saying it’s
less than eight percent of the methodology today. And that “We’ve
seen schools perform best in the rankings if they emphasize and
perform strongly in student outcome areas like graduation and retention rates.
He also said they further decrease the weight of SAT and ACT scores.
Tuition costs at both public and private colleges have doubled since the late
80s, even when you account for inflation. Even so, more Americans
are getting college degrees. But state funding for public universities has taken
a hit. States spent less on higher education in 2017 than they
did in 2008 before the recession. And that means students are spending more.
The tuition they’re paying is a big moneymaker for colleges. 2017 was the
first year ever that most state schools got more money from tuition
than they did from government funding. If you’re sitting in the state
legislature and you’re looking for money, the university system is one of
your biggest costs. So when you realize well we cut them 2 percent last
year, they didn’t go out of business. Let’s cut them another 2 percent. What
happens is you pass the buck. It goes from the
taxpayer to the student. The average student graduates with
about $37,000 in student debt altogether. The U.S. has
$1.5 trillion dollars of it. I had this mindset that I was gonna
go to college undergrad and then I was gonna go to grad school and get my
PhD. I thought that I would get through it and then come out on the other side
with a job and then be able to pay it off. But that did
not go according to plan. Rachel Brandt got her undergraduate degrees
in math and economics from Iowa State. Then she moved to New
York to pursue her master’s in economics. She left grad school after her
first semester to better cope with mental health issues she was going through. I thought that I would just withdraw
and be fine. But then a couple of weeks after I withdrew, I got an
email from the school saying that I owed them $6,000 right away. And that was
rough. So I didn’t know how I was going to pay that.
And that was very stressful. Three, four, five, six, seven different student loans that all
have to be paid with different interest rates. The number just keeps going up. I
will be paying $867 in rent a month and that’s about how much I’m going to
have to be paying in loans. I look at my bank account every
day and it’s very scary. Rachel is far from the only one
not to finish a degree she started. Only about 57 percent of undergrads complete
their degree within six years. One option students turn to for a
more flexible and at times more affordable path to a degree are for-profit
colleges like University of Phoenix or DeVry University. The industry has been
in flux, but today a little more than 900,000 students attend for-profit colleges
in the U.S., many of whom use federal loans to
help cover the cost. I feel like I want to do
something practical that would that would clearly lead to a specific job. The Art
Institute of New York City was suggested to me. Now, I really regret that it
was because it turned out to be a terrible financial experience. Despite for-profits being just a small
fraction of all colleges in the U.S., for-profit students default on their
student debt at a much higher rate. Chyna is a first generation college
student from New York who studied web design and interactive media at the Art
Institute of New York City when it was run as a for-profit. I withdrew from the school, that
was something could have entirely taught myself using tutorials. For-profit schools date all the way
back to colonial times. Not everyone could attend institutions like Harvard,
so entrepreneurs saw a business opportunity and began teaching reading, writing
and trade skills *** for a fee. Benjamin Franklin was a big
fan of for-profit schools and the practical skills they offered. In
1994, University of Phoenix’s parent company Apollo Education Group went public
and laid the groundwork for the for-profit education
corporations of today. But this big business approach
to education hasn’t come without controversy. With so much money on the line many
turn to the schools that show the best numbers, the best chances at a new
job when you graduate. But can you believe what some of those
for profit colleges tell you? When I went there for the so-called
tour it was it was basically a sales pitch. That should have been a red flag but
it wasn’t because I was 18, not having parents who completed college, you
know, being a first generation student it’s like I
didn’t have the discernment to just leave those kind of
schools alone. The Art Institute did not respond to a request for comment.
However the director of Cato’s Center for Educational Freedom defended
the for-profit system, saying non-profits make a lot of money too.
They just distribute it differently. He said traditional colleges often use it
to “make the lives of people working in them more comfortable.”
He also said everyone in higher education is almost certainly seeking
profit and there is little evidence that people in for profit schools
are less focused on students best interest. Since Chyna left, the Art
Institute of New York City along with 43 other Art
Institute campuses shut down. There are a number of
lawsuits against various campuses. However Chyna’s not able to qualify for loan
forgiveness because she left the college just before the cutoff date. And she
feels trapped. Since she hasn’t paid off her student loans in full, she’s not
able to get her transcript, which she needs that to apply to state schools.
So for now she’s enrolled in another for-profit school in the hopes of using
the degree to apply to a master’s program at a state school. I feel like all these for-profit
schools they prey on people who are already who come from low
income backgrounds. Enter the non-profits. Amari Lilton is from St. Louis but
went to undergrad at a private college in Chicago. Now she works at an
advertising agency in New York City and is paying off her more
than $40,000 in student debt. You want to have the college
dream without the student debt, because you’re just coming into something and you
feel like I’m gonna have all this independence I’ll be able to pick
my own classes I’ll have this freedom I’ve never had before. So you want
to go to the coolest place you can. Every college wants to be the best.
They want to compete with the next college. They want to attract the
top students. That means they have to have the best facilities they
have to build new buildings. And remember tuition discounting? While
the sticker price of non-profit colleges are rising, so is the tuition
discount rate. The price you see on a college website is higher than
what many students end up actually paying. You would think that most of
the money is going to the cost of running the school, but nearly
half of undergrad tuition at non-profits goes to help other people pay
for their schooling. Amari didn’t pay the full price of tuition at her
private college but she’s still facing more debt than she was expecting. I just cried. Yeah I just cried because I
had no clue how I was going to do it. I dream about it. It’s always on my mind. If I’m like
going out to lunch and I’ll just say, oh my God I hope this goes through
because I know they just took my money out. I just hope, I hope. I want
to double my payments by the end of this year so $2,000 a month. My goal is to
not go into my 30s with debt. If I go to Wells Fargo and say like
I want a portfolio with all my best investments help me out, they won’t
take me seriously because I have $250 in the bank. So where do we go from here? I’ve
been studying this for a long time and advocating for reform and this is
the hardest type of problem to fix because it’s structural. It’s all of
us. It’s the whole market. Jarrett Freeman ran for New York State
Senate in 2016 when he was just 26 years old. I declare my candidacy for
New York State Senate. And a big part of his platform
was education and student debt. I was actually on campus and I saw that
I had so much to pay and it just was overwhelming. I didn’t
know how to do it. I never saw a number that big.
Americans are becoming less convinced that a college degree is worth it. In 2013,
53 percent of people thought a four year degree was worth it. In 2017
only 49 percent of people thought so. I think that it’s so ingrained in your
head that you have to go to college, that college is the next step after
graduation. I think in hindsight I see that college is not for everyone. Overall I feel a little jaded about
college being worth it for everyone, or at least for students
directly out of high school. Knowing what I know now, I would have
even taken a few years off before I went to college. There is this
idea that 18-year-olds are supposed to know what they want in life. And now
that I’m turning 25 tomorrow, I still don’t know exactly what’s going on. That mindset could be a problem
for the future job market. It’s expected that by 2020, 65 percent of jobs
in the U.S. will require people to have some college education to even be considered.
So there are a lot of jobs that require you to spend some money
on school before they’ll pay you to work. In many cases that
sum is a lot of money. Student debt is a national crisis.
Unfortunately we don’t have bills on the floor that are
actually addressing that. The reality is there probably isn’t
just one solution that’s going to solve everything. It will take a
lot of different approaches, and different approaches are being tested across
America. One of the proposed solutions is an income share agreement.
Essentially, instead of taking out loans, students could agree to repay an
investor a percentage of their income for a set amount of years after
they graduate. The idea has support from politicians on both sides of the
aisle and some schools are starting to test it out. In New York
City, Governor Cuomo implemented a program that gives middle-class residents free tuition
at select state schools. And some billionaires like Bill Gates are
giving their own money to try and fix the system. And of course
there’s the idea to offer free college. I do not agree with free college.
I think that when you give someone something for free they do not realize
the value of it, and that’s just my opinion, and I think that there
should be some cost associated with it. Free college is a great idea. I
am fully supportive of free college. The catch is: who’s going
to pay the bill? In other countries taxpayers foot most
of the bill. So instead of paying student loans later in life, you’re
paying higher taxes. Roughly two dozen countries across the world provide free
or almost free college to its citizens. The solution probably won’t be that
simple in the U.S. But with student debt rising and the need for
a college degree becoming more and more important, the future of American
education depends on figuring this out.

100 thoughts on “Why College Is So Expensive In America

  1. US people need to stand up for the affordable higher education, rather than trap their student with huge debt.

  2. The government wants you to live that paycheck to paycheck that’s why no law has ever been put into place on how much colleges and universities can bill students

  3. Every college I visited (except maybe Villanova?) said that their financial aid policy was meet 100 percent demonstrated need and zero loans! J get that demonstrated need might be a bit less than actual need, but seriously, most of my friends here who’se household income is even 100k barely pay anything for school (tuition including room and board is 70k/per year)!! And outside of need based financial aid, I was offered full rides to multiple schools simply by applying for merit based scholarships when I submitted my app. Miami of Ohio was not even an essay (common app and check a box), and they offered me a full ride.

  4. 15:07 O man does that depend on the degree type big time. Underwater basketweaving (aka. history, liberal arts, gender studies, etc.) hell no not worth it. Engineering, material science, chemistry, computer science, etc. yes worth it. All about the market value (mostly) of the degree

  5. Education in the military isn't free. I paid into my GI Bill. We have a bunch of veterans in the family and this is a common conversation. The GI Bill doesn't even cover everything. So, you could serve, use it and still end up with thousands in loans/debt. GTFOH

  6. Tax payers should foot the bill. Why? Because when you're seventy-eight years old and retired in need of surgery for one chronic ailment or another, you want someone who is well qualified to do the surgery. Similarly, someone well-qualified to fix your roof or plumbing. You're investing in your future well-being as a taxpayer. And taxpayers with windfall income far beyond their actual needs should obviously pay more back to the society from which they so heartily received. Duh.

  7. The problem really is, like Frank Wu said in the video, systemic. We're using our universities as the de facto career placement system, and as is, they will never be affordable. Universities are wonderful places, but they were conceived by a scholarly elite to serve their own need for a place to collaborate and study their whole lives–all of the idiosyncrasies of college life, like boarding on campus, the concept of a rounded education, and emphasis on theory over practice, are consequences of that intent.

    I think the quickest way to cut through the knot is to reform our accreditation standards so that community colleges, voc schools, and even high schools can award degrees with the same prestige and legitimacy. In short, what we need is competition.

  8. I find that most of these issues is because people don't think. They are don't stop to logically think things through. Whether it be degree options, school options, future job option/opportunities, and living arrangements. These people also accept loans like it's free candy. Many of them are able to receive Pell Grants. Lack of education on their part is what causes the issues. People like to go out of town for "the college expereince" when it costs them a metric butt ton. People need to grow up, and quit blaming others.

  9. Americans. Fools. In México You can have good free superior education. And even private universities are not that expensive. I

  10. In my country four years' college course only costs u approximately 15,000 to 20,000 dollars(adjusted by consumer price index) and 4 yr graduation rate stays afloat around 96%.Colleges are mostly state-run.Unluckily from this yr on our ministry of education is on a call to clamp down on graduation rate and if u are the one like me whose major is predetermined by ur parents against ur own will,that completely sucks.

  11. Yeah right if college degrees are important and having as much educated people they would not lett colleges charge you arm and a leg

  12. When the government stepped in and starting enabling the handing out money without making sure that the person receiving the money could handle the loan. Much like they did to the housing market. Gave people outrageous loans they could never repay… that is when the price of collage starting going up and up. Much like the housing crisis. Housing prices soared. All in the name of equality. When it comes to government less is ALWAYS more.

  13. More American families these days are doing college in Europe where, if you have strong enough academic qualifications, Germany, Finland, Sweden and other countries have tuition-free university. It works for them because most Americans who do that just stay in Europe and contribute much more to the economy after they graduate, so it's a net gain instead of cost to the country. And since the Americans who do this are so strong academically, they become skilled workers who then often also start businesses. Win-win. It doesn't even cost extra taxes in Europe, the economic gain for a debt-free uni grad more than pays for itself.

  14. Meanwhile I'm here in Europe (Germany), enjoying my debt-free life as I have to pay only 600€ (about 660$) for one year of good quality education, including public transport. 🥰

  15. I could tell you why college is so expensive in less than a minute. The government subsidized tuition so there was a massive influx of students and no incentive to not raise tuition. If you want to lower the cost get the government out of the student loan business and make bankruptcy apply to student loans. This will incentivize both school and banks to make sure people who get student loans are capable of succeding in said school and being profitable.

  16. I went to community college for the basics and then completed my degree at a public University. Some semesters I was full time and others part time depending on what I could pay. I worked full time and worked for an employer that offered tuition reimbursement to help pay some of the semesters. It took me 6 years to complete my degree. I felt desperate at times bc I would see my classmates graduating before me and it seemed I was taking for ever. Working my ass off to pay for school at my pace was the best decision I’ve ever made. I have 0 student loans!

  17. It got expensive the second the government guaranteed loans. That’s why. Government ruins everything it touches Stop taking classes for worthless degrees

  18. Some them was slow. Go your ass to a state university. 40k for a couple months? Wtf was you thinking? Also stop showing us them sad ass apartments😂

  19. When my mom went to college at the end years of WW2, only 10% of HS students were taken into colleges. In the 60’s college opened to all (pretty much) to go. It let in the academically inferior .

  20. I know a few people that in addition to student loans made other bad financial decisions that set them back…like opening up credit cards to charge McDs & Dominos. Credit cards are like personal loans…they are the worst and have no place inside an undergraduate’s pocket.

  21. They are being slaved early by the bankers and they will pay until they die. Sad. Good thing in our country because of our president, my kids university education is free.

  22. As mentioned, there will take a lot of different changes to make higher education viable for most people. Fist of all when they decide to enroll, they need honest counselors that can give them a heads up on what they can expect to get paid in four years and what the top pay for that choice can pay, what are the demands in the area. Secondly, they need to educate people on how to manage financially during those four years. If they are the first in their family to go to college, their parents need just as much counseling as the student they need help in researching career paths. Thirdly when entering college at 18 yrs old, are they mature enough to handle the exposure to the real/partially shielded world? Some are just not ready to be on their own. Fourth, do you really need a four year degree for the area of interest you might want? Check out internships that pay at least some minimum wage or a trade that allows you to pay as you go. Peoples expectations change as they are opened up to different possibilities so plan, choose wisely and prepare to sacrifice and expect to work hard for your dreams. Joining the military is still a great way to get your education. If you tell them what you're interested in and the military has nearly all the careers that are found in civilian life, then maybe that is a good choice for you. Just realize that the military will also get you a first class education, they want smart soldiers, not cannon fodder.

  23. This gurl be spending on expensive food and fancy kitchen gadgets. She shops at whole foods that is a store for the rich

  24. I already quit my job and am enrolling in courses as we speak. The unfortunate truth I've realized as a 30 y/o who never finished his college degree, in today's economy, if you want a career, and more importantly, full control of that career, you have to go to college. Like she said, more jobs are requiring college degrees just to even get a job.

  25. Even when you give a degree to someone for a lot of $, they don't understand the value of it. $60K COLLEGE DEBT for a fine arts degr're that pays $12 an hour. Who's talking to these kids before they choose a career ad college?

  26. Sorry for this question, because I sincerely can’t understand, I’m Brazilian! Even in Brazil and Argentine we have free university (COMPLETELY FREE), but also in Europe, most of the countries in Europe the Universities are free (exceptional United Kingdom) even for immigrants. My question is why Americans don’t go to study in Europe? Is a opportunity to learn a new language and travel around amazing countries and have a great education and a incredible experience of life.

  27. The problem isn't so much what college costs but the kind of crap degrees they are spending the money on. A degree in Social Work that on a good year might pay you 30K is going to take you 20 years to pay off 100K in loan debt.

  28. Get government completely out of schooling and watch the schools adjust cost so that they can get students. Prices will go down.

  29. This video fails to address the very question in its title. Why is College So Expensive in America? I think the very drive to over priced tuition is guaranteed loans from the Federal Government. The institutions that charge this overpriced service has no skin the in the game when it comes to the success and failure of their customers/students. They can raise the cost to whatever they want as long as a student who has no foundation in personal finance can borrow any and all cost (living, tuition, books, insurance..etc.) while going to school.

  30. বাংলাদেশের পাবলিকের পোলাপাইন দেখ কত শান্তিতে আছস

  31. The American System is so bad! I am from Europe and can't imagine that. I'm studying law for free and we even get money from the government so that students that are from a not so wealthy background can study without problems and don't have to work that much while they are at university.

  32. It was waaaaay much harder for black people than it was for white women please don't down play this historical fact

  33. In mn we have something called pseo (post secondary education opportunity) this allows you to go to college free in your junior and senior year of high school. Your college classes also count as your high school credits as well. You are allowed to take 16 credits a semester. By the time I graduate high school I’ll have my associates degree and have taken 75 credits.

  34. I went to Jr college for electronics before joining the AF. I mowed grass and etc for the city school system and lived with my Mom. No college debt.

  35. In Taiwan around 38% of the college students have tuition loans, averaging 10K USD in total.
    And Taiwan’s NTU is among the top 100 uni according to QS.

  36. Good intentions of feds backing student loans brought terrible results. It always happens in capitalism. Gov tries to help poor ppl, and capitalism takes advantage of it. It's so hard to create the right balance. If we suddenly stop giving loans, poor ppl lose access to education. If we drop the costs, professors get fired and education quality gets lower. It's a difficult problem

  37. The average inflation was 1.8% over the last 10 years. The inflation rate for the cost of college is 7% per year.

    Step 1,convince everyone they have to have a college degree. Tell them he lie that it doesn’t even matter what the degree is in. As long as you just have a degree you will be successful.

    Step 2, get legislation passed that prohibits anyone from being denied a loan for college.

    Step 3, make sure nobody shows students that their $100,000 BA in History (or many other Arts degrees) will at most get you a job making $35,000 a year.

    Step 4, keep ripping people off.

    A marketable skill is 10 times more valuable than a college degree.

  38. I had $100,000 in student loan debt when I graduated in 1996. I paid it all off in seven years by working long hours and making sacrifices. It can be done if you just stop worrying about it, working hard, and living a modest lifestyle until it is paid off. Simple.

  39. Allow students to file bankruptcy if they can't find a job that pays well. This will cause the loan industry 2 normalize its prices to what people can afford.

  40. why are people not going to community college first? Esp to take those classes everyone has to take regardless of major? Why is trade school looked down on? wonderful high paying jop opps there

  41. I came to this video for an in-depth look into the campus characteristics, prestige competitiveness, and market demand that make US colleges unique and expensive. Like many of the students featured here, I finished not getting what I came for.

  42. You have to pick a job, research the salary, find a school that will give you a payment you can afford. Public… schools. When you work no one cares where you got your degree 🤦‍♀️

  43. .. AN EDUCATED MAINTANENCE WORKER APPLIYING FOR A MINIMUN WAGE JOB..WHAT EVER JOB HE CAN GET….a bankrupt college graduate with a high level education and no job…He's overqualified or he's got no hand experience…He's credit rating is very low…The HR manager will see hin as a treat to his job…The co's supervisors will not approved his application (too highly educated)….ITS AN UPSIDE DOWN WORLD…WHAT AM I SAYING…( i haven't got a high school diploma..but a have a trade…)

  44. …A plumbler or and electrician or and air conditioning and heating specialist will make more than an engineer…It's a matter of fact. My co-worker's son graduated as mechanical engineer and he wanted to get a job in the Co. where his father and I worked (that was 15 years ago.) and he been driving a big rig since then, and making more money than our present engineer…

  45. if you want to go to college figure out how to pay for it. it isnt our job as tax payers to fund your person things you do with your life

  46. It shouldn’t be the tax payers job to pay for people to go college, most people don’t finish and not every goes for the college route

  47. No they need to vet and tell people no if they decide to major in something that isn't economically viable or stop giving them student aid if they change their major too many times. More than 2 times should stop funds. It saves them from not paying anymore if they decide to drop out. But ultimately, it's the college's fault for not stating precisely what gives a better ROI.

  48. They're a failing business. It's supposed to be fixed with a Business Plan.
    Not price-gouging.

    They're given all this money for a reason. To prepare our future generations.

  49. combination of greed based college system and poor personal spending habits.8'17" – that lady says that she is drowned in debt all while using MacBook Pro.

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