Stagnant Middle Class Feeling Pressure Of Rising Tuition Costs

The cost of a college education is rising, but the wages that pay for them aren't.

Over the last 20 years, while pay for the average American worker stagnated, college tuitions have risen drastically, according to an article by CNN Money. In fact, the average cost of tuition at a public college had risen to $6,500 by 2008, from just $2,800 in 1988.

Wages over the same time period have actually declined, once adjusted for inflation. For perspective, if pay rates had increased at the same rate that tuition has, the average American would now earn $77,000 a year in 2008, according to CNN Money. In reality, the average American earns closer to $33,000, or $400 less than 20 years earlier when accounting for inflation.

Pay of the average worker has not only taken a different course from tuition, but from economic productivity, too, according to a study this year by the Economic Policy Institute. While U.S. productivity increased by 80 percent between 1979 and 2009, the hourly wage of the median worker went up by 10.1 percent. The country's high unemployment rate, currently at 9.1 percent, has only intensified that downward pressure on wages.

And then there's federal student financial aid programs. Since 1992, the maximum amount of financial aid a student could receive from the federal government for a four-year degree has remained at $23,000, in spite of inflation and rising tuition costs. Consequently, two-thirds of students graduate in debt, and the average student owes $23,186 on average, according to figures from FinAid.org cited by CNN Money.

Below is a chart showing the rising tuitions rate of colleges and the stagnating median income of Americans provided by CNN Money. Click chart for more info:

Comments

[Cherie Lyon]

12:53 AM on 06/23/2011

Come on, folks. We, working folks, and we, business folks, HAVE TO WORK TOGETHER or we lose. Some compromises have to be made on BOTH SIDES so that we don't all sink together. Am I the only one here who thinks this is sensible?!

[Sunny California]

05:46 AM on 06/22/2011

Why is no one placing the blame on business who require a 4 yr degree to be a receptionist or something? Really? I had a receptionist job in high school. Gimme a break.

[Cherie Lyon]

12:48 AM on 06/23/2011

So did I. I want honest businesses and honest working folk to make a deal to work with each other. I don't know how to get that started, but it should HAPPEN! We all should be making bonds/bargains to work together so we can restart our economy. It won't happen, though, if business folk don't recognize workers as their greatest assets, and honest working folks won't bargain to win their right to work. JUST SAYIN'!

[ginione2]

10:50 PM on 06/21/2011

There will be no middle class soon. What more has to be said? Our Federal Government has seen to that. If you, who think they are still middle class. expect things to get better, you better start thinking. You will be relegated to low class or you better pump yourself up and rise above or else. The middle class is going to pay, and pay heavily for all the responsibility heading your way. Good luck!

[Cherie Lyon]

12:50 AM on 06/23/2011

Read my above reply. Honest middle class business needs good honest workers and everyone has to compromise so we can win. If we don't, the rich boys and overseas bosses win.

[Indaba]

10:36 PM on 06/21/2011

The fact that middle class incomes have not risen for three decades but government expands the amount of money it takes to spend on what...that fact is what each voter needs to ask their politician to explain. Where is the return?

[flashL1ght]

06:31 PM on 06/21/2011

If you want to study something past high school that doesn't lead to one of the "professions," then don't bother. That's for wealthy children, who have trust funds to supplement their income. People should be able to study without the crippling debt load. A well educated, critically thinking society is inherently priceless. The job afterwards... is their own fault, but a unpayable debt load shouldn't be their punishment for self-improvement. America has turned into the land of opportunity is for those who were born into it.

[Madbunny]

05:46 PM on 06/21/2011

Solution: Education is free, but entirely optional with GPA riders, all the way through college.

Then we won't have an entire class of people saddled with loans they have to spend the next decade paying off. Doctors will be able to focus on their practice instead of student loans, Engineers will be able to get that house a few years sooner.. etc.

The value of an educated populace and electorate can't be understated.

[Patriotology]

03:29 PM on 06/21/2011

Those facts have a liberal bias! Prepare for nickel trolls!
Nothing like some numbers with an agenda to enrage the bagger base.

[Madbunny]

05:47 PM on 06/21/2011

Facts! Noooo, I guess they need "balancing" with some 'not facts'.

[jcaunter]

02:59 PM on 06/21/2011

Yeah. Guaranteed government loans that can't be clear via bankruptcy would tend to do that. Just think, if the government had never decided to get into the education business, most people would still be able to pay for college by working part time over the summer between classes.

The more I think of all the bad things the government does whenever it tries to "fix" a problem, the less liberal I become. Vote Ron Paul in 2012 if you love peace; he's promised to start bringing the troops home the first day he's in office. Vote for a Obama or any of the other mainstream Republican candidates if you love endless wars and foreign interventions at the behest of international oil companies and war profiteers.

[UDKM2010]

12:46 PM on 06/21/2011

Easy money. Too many people, borrowing too much money to attend college has increased the demand and thus the price of college. Wages as stated did not go up as much and weren't the driving force, it was the debt people took out to attend. Similar in many ways to the housing problem.

[jcaunter]

03:02 PM on 06/21/2011

Uh-huh. And how is it that the lenders decided to give all these unemployed students guaranteed, no-collateral loans for tens of thousands of dollars in the first place?

[Patriotology]

03:31 PM on 06/21/2011

oh oh, mr carter! to make a profit off of usury?

[moutonnoir]

04:04 PM on 06/21/2011

did you consider that perhaps the students are actually good for the money, and it is saddling students with 18% interest that is the problem?

do you know anything about these (terrible for them) loans the students are getting?

You act like these loans are a gift from the government - but in reality these represent the government's hands-off deregulation approach allowing students to be treated like credit card users.. And they are NOT the same..

[Debbie Wathen Clute]

06:17 PM on 06/21/2011

During the Bush years, people were borrowing like drunken sailors and everyone was trying their best to live way beyond their means. Remember the McMansions?

[jdbond]

08:43 AM on 06/21/2011

College education? Sounds elitist. We don't even need high school education for types of job getting created in this country (Texas you rock!).

[brutus1065]

01:52 AM on 06/21/2011

College tuition is a joke. There is no American institution that is run less efficiently than universities. If the idiot republicans want to rail against socialism and the need from competition and free markets- there is good example.

I have a question. Do college presidents and tenured professor in Wisconsin lose their right to bargain before signing their high-wage employee contracts. And what about high-paid football and basketball coaches. Are they still able to sign million dollar deals with publically funded schools while local teachers lose there right altogether to negotiate.

[jdbond]

08:45 AM on 06/21/2011

Actually, football coaches are highly paid, not professors. Goes to show the crass commercialization of education.

[Peanut Santiago]

01:41 AM on 06/21/2011

Wages are stagnant or falling.....and a lot of things are going up in price, not just tuition.

The middle class is being decimated.....and a life of hard work is not as likely to lead to a comfortable lifestyle while working and in retirement.

The working class is little more than the working poor today.

[Thehapypig]

10:00 PM on 06/20/2011

Looks like our education system needs reform in more ways than one

[CPA 4 Life]

09:36 PM on 06/20/2011

Another meaningless comparison propagated by HP in a long line of epic fails. The value of an education is equal to the earnings (and nonmonetary benefit) DIFFERENTIAL between workers with and without a college degree.

Median income simply approximates how much someone makes with an associate's degree or less. As half of the workforce does not have a bachelor's degree.

[oilfield]

12:21 AM on 06/21/2011

yes, there are lots of meaningless comparisons that they publish here.

[manface]

02:57 PM on 06/21/2011

Are you trying to say wages are not stagnant, or college is affordable, or both?

[CPA 4 Life]

03:13 PM on 06/21/2011

I'll try to dumb it down. Upon graduating HS manface has two options. One is to directly enter the workforce. Earning $25k a year and receive a 3.5% pay raise every year. The other option is to go to college for 4 years. Upon graduating college, manface expects to earn $40k a year and receive a 4% pay raise every year. What is the value of the education? Well it is the difference of what manface will make with a college degree compared to what manface would make without the college degree. Of course, because the cash flows occur at different times you need to understand the basics of Discounted Cash Flow Analysis to properly compute the value of a college education.

[Patriotology]

03:33 PM on 06/21/2011

They are saying pay no attention to these numbers behind the curtain. Everyone knows that numbers and facts have a liberal bias. That someday their anti-reality ray will become a reality and 2+2=5 will finally be the right answer muhahahahah!

[Linda from Deerfield]

09:20 PM on 06/20/2011

How is this news? Tuition increases have been out of line for a long time, as have health care and health insurance increases, property tax increases, and home mortgage increases for anybody who didn't buy 20 or more years ago.