Runaway cost of college hurts Americans more than the China trade war

May 24, 2019 by

Private-college tuition is rising at more than twice the rate of U.S. inflation

If college professors are genuinely worried about the costs of President Donald Trump’s tariffs, here’s an idea. Why don’t they help out by… er… cutting the cost of college?

It’s one thing to hear complaints about the burden of rising prices on the average American household. It’s another to hear them from people who raise their own prices by twice the rate of inflation every year.

New estimates from the Federal Reserve of New York suggest — guess, actually — that the latest round of tariffs will raise prices on an average U.S. household by about $830.

The calculations are based on research from economists at top schools such as Columbia, Princeton, UCLA and Yale. These are institutions that now charge kids as much as $200,000 for a liberal arts degree.

Consumer price inflation so far this millennium has been about 2% a year.

Private colleges: Try 4.6%.

Sure, the tariffs might end up adding to the costs of things like clothing, technology, and household appliances. But the prices of these things have been falling for years anyway.

According to federal data, clothing costs less than it did 25 years ago. Ditto consumer durables . And technology costs are in free-fall. They’ve halved in 10 years.

Consider: Apple’s AAPL, +0.23%    iPhone X was $999 when it was launched 2017. You can get it today, new, for $699. During the same period, says the College Board, private colleges have jacked up the cost of a degree by another $9,300. But heavens, yes, let’s worry about the crushing burden of rising iPhone prices. How will kids ever be able to afford their professors’ compulsory textbooks?

If graduates end up being crushed under their student loans, well, let’s pass those costs onto the taxpayers instead. The one thing we could not possibly do, of course, is actually cut the costs of the degrees.

Source: Runaway cost of college hurts Americans more than the China trade war – MarketWatch

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