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How Higher Education is Responding to Higher Costs

One of the big subjects of debate right now is whether or not student loans and education will account for the next economic bubble. Not too long ago, outstanding student loan debt surpassed $1 trillion, and student loan debt is now larger than credit card debt. The rising cost of higher education has caused many to pause and wonder if a college degree is really worth it [3].

Many parents, anxious about the cost of college, are looking for ways to prepare. It’s smart to prepare for college, of course, but some think that there are some things the higher education industry could be doing to help bring college costs back into the realm of affordability. Sure, it’s important for parents and kids to save for college [4], but shouldn’t schools be looking for solutions to the rising cost of college as well? Luckily, according to CNN Money [5], some are beginning to respond to concerns, and are offering options that can save college students money:

Tuitions Cuts and Freezes

Surprisingly, some colleges are actually cutting tuition. CNN Money reports that there are some colleges, like Seton Hall and the University of Charleston, that are dropping their tuition costs in order to make the experience more affordable for students. Tuition cuts are a great way to reduce the overall cost of going to school, especially when you consider that the rule of thumb for tuition increases is to plan for 8% a year.

Even those colleges that aren’t cutting tuition are looking for ways to help keep costs from getting out of control. Some colleges are institution tuition freezes for the next few years. Others are considering offering guarantees. For example, you can avoid tuition increases for four years. Your tuition costs remain the same throughout your college, meaning that you are exempt from tuition increases that may come later on — as long as you graduate within four years.

3-Year Degrees

One of the recent trends in college education has been to see an increase in the amount of time it takes to get a degree. Taking 5 years to complete a 4-year degree was starting to become commonplace prior to the financial crisis of 2008, and in some cases has even been encouraged by the recent economic troubles. However, taking 5 years to get through school can become quite costly. In order to help reduce overall costs of attending university, some schools are rolling out 3-year programs. These accelerated programs allow students to earn their bachelor’s faster, and save money in the bargain.

Other incentives, reports CNN Money, also include a graduation guarantee, that insists that students who meet certain requirements will graduate in four years — or the school will pick up the tab for extra time.

Bottom Line

These aren’t bad options for students (and their parents) looking to reduce the cost of attending college. However, it’s also important to realize that there might be some consequences with the lower costs. Financial aid might be harder to get, or you might not be offered as much of it. Additionally, some schools might skimp in other ways, such as in providing student services, or in quality of instruction. It will be interesting to see how the situation plays out.

(Photo: Mandy_Jansen [6])