Crazy College Costs and the Economy
Oct 2, 2009
Posted by Jody Eisenman | Filed under Uncategorized
As pretty much every American knows, the economy is still in pretty bad shape. Whether you believe that things are turning around quickly, slowly, or not at all, the fact remains that the average American is having a tougher time than they did two years. In fact, today’s unemployment number shows a nationwide unemployment rate of 9.8%, the highest number since 1983. I think it is fair to state that the average college graduate today faces the most challenging job market seen in the last 25 years. As such, college enrollment is down, mostly due to education cost. One would think that colleges should look to cut back on tuition, the same way that many businesses have done over the past year.
Think again. Tuition and fees for public four year institutions rose over 14% last year. Although there are several reasons for this, much of the blame is based on lower enrollment. In other words, since enrollment is down, colleges feel they must raise fees on everyone else! Where have we heard this before? (Hint: think the FDIC and banks, and SIPC and the broker dealers). This is insane in my opinion. Colleges should be looking to cut costs and reduce tuition to it’s’ students. Look at this way. If a broker lost half his clients last year due to poor performance, would he then be justified in raising his commissions on his remaining clients to make up the difference?!
Meanwhile, the unemployment data for today has sent stocks to another lower opening. Once again, the bulls are being put to a test; one that they have met over and over in the last 6 months. Let’s see what happens here.
