4 Ways to Get Out of Paying Tuition Increases?

Answer 1

The financial crisis of 2008 has forced many private and public colleges and universities to raise their tuition costs for future academic years. Several endowments have been partially or completely wiped out due to the Stock Market crash, during which the Dow Jones Industrial Average declined by six thousand points. Raising tuition costs has contributed to speculation about a bubble in higher education, and whether that bubble will burst.

Parents and students worried about paying for college can breathe a little easier, however, since there are ways of avoiding having to pay for increased tuition costs. Dozens of colleges now offer payment plans in which the school locks the price of tuition for the four years that the student is enrolled. These truth in tuition programs often end up increasing prices in other ways, such as in cafeteria food, dorm expenses, and other miscellaneous charges.

There is a downside to this method, however. Colleges raise tuition costs for succeeding classes. In addition, some colleges have ended their tuition lock-in programs because they simply have to raise prices in order to keep up with inflation. Plus, colleges that use this method often end up being much more expensive than other colleges.

Another way colleges attract students worried about expenses is to offer the option for both parents and students to invest in so-called prepaid savings plans. These plans allow students to buy tuition credits that can be applied to their education bills over four years. The programs are usually offered only if the student has tuition expenses over a year away.

Like tuition lock-ins, however, even this program is facing challenges. Some programs also lock-in tuition costs; others require investors to pay premiums over the normal tuition price in order to remain eligible to attend. This results in actually increasing the tuition costs without actually increasing them.

Unfortunately, it appears that without drastic deflation in higher education, tuition prices will continue to rise. Since 1982, higher education costs have risen by almost 500%, which is four times faster than the national inflation rate. Tuition price hikes can be avoided but only at the cost of paying for them sooner rather than later.