This much is indisputable: Over the past decade, the cost of college risen even as pay for bachelor's degree holders has fallen. It's been a deeply disconcerting trend, but if you plot the data in a certain way, it can look outright terrifying.
This CITI chart appears to have been precision-engineered to scare the living hell out of parents and 17-year-olds alike. It illustrates how average tuition and fees at four-year public colleges, adjusted for inflation, have jumped 72 percent since 2000, while earnings for bachelor's holders between the ages of 25 and 34 have fallen 14.7 percent. Joe Weisenthal posted it on Business Insider, noting that it helps explain why student debt has become such an immense burden. The picture practically looks like a wide open mouth, getting ready to devour the value of your diploma.
But don't start hyperventilating. Notice that CITI's chart indexes its data -- meaning it processes the numbers to show percent change over time. That's why the trends look so dramatic. But when you look at it in terms of actual dollars and cents, it's much less frightening.
To demonstrate, I hunted down similar data to what CITI used -- there are a few important differences I'll explain in the footnotes -- but kept the raw dollar figures. Notice that the jaws disappear.
According to the College Board, the net price of college tuition -- that's the figure after grants, tax credits, and discounts are factored in -- has indeed risen by roughly 75 percent between 2002 and 2011.* But that translates to just about an $1,130 increase -- or 2 percent of your median young bachelor's holder's annual earnings, at least if they work full time. That may sound surprisingly low, but remember we're not talking about the University of Virginia or Georgia Tech here; we're looking at approximately what most American students, the vast majority of whom don't go to elite colleges, pay for school. And even though the premium isn't quite as high as in years past, Americans with a bachelor's as their highest degree still make about 50 percent more than high school graduates, whom I've included here for some additional context. In short, there's not much question that going to college is still worth the cost (assuming you can graduate).
Is higher ed still as good a deal as in the past? Maybe not. Is rising tuition a problem? Undoubtedly. But again, we need to keep what's unfolding in perspective. America's growing student debt burden is due to price hikes, sure, but it's also the result of increased costs of living and the fact that more and more students are heading to campus. And ultimately, we're not yet at the point where those with the ability to graduate are really being priced out of an education. The trick is making sure we don't get there.
*The College Board doesn't t have equivalent figures for 2000 or 2001, nor does the Department of Education, so far as I can tell, so I'm not exactly sure where CITI got their figures, which . Also, when talking about returns to education, it's usually preferable to use median income data instead of averages, which actually tend to skew high. Finally, I would like to thank Anthony Carnevale of Georgetown's Center for Education and the Workforce for unearthing most of the income numbers for me, as the Census Bureau's main data tool -- believe it or not, it's actually called Data Ferrett (sic) -- is a bit of a mess.