It’s no secret that today’s colleges are substantially pricier than they were in the past, which is a factor to consider when it comes to retirement planning. Economic inflation and recession, competition between schools, and student loan debt all contribute to this spike. Read on for an understanding of the increasing costs of a college education.
Inflation
Simply put, the United States dollar is not as valuable today as it was in the past. Thus, prices must be increased as the cost of products and services rise with inflation. This is one reason today’s colleges may cost tens of thousands of dollars per semester, whereas they may have only cost a few hundred dollars in the past. However, the cost of a college education today does not necessarily even out.
Competition
If inflation was the only reason a college education is become more and more expensive over the years, tuition would still be significantly lower than it is. A college stands to be more successful if it is well-attended, and there are countless options for new high school graduates to choose from. Many colleges will invest in amenities that might draw in applicants, but they want to recover this money in the long run; thus, they make tuition more expensive to cover the costs of these amenities that were designed to draw the applicants in.
Student Loans
Inflation and competition are two of many factors that have disproportionately increased the cost of a college education, and student loans have not helped the imbalance. Potential students will take out loans so that they can afford to go to college, but they end up owing significantly more than they took out thanks to steep interest rates.
Thanks to these rising costs and additional expenses, it’s a good idea to start retirement planning in Tucson early on. At Financial Directions, LLC, we are happy to help you with estate planning, retirement planning, and college savings. Call us at (520) 408-7777 or check out our website for more details.
