The two wide spots in the 2010 US “Population Pyramid” reflect college-age Americans and their parents. For years—since I was an undergrad, really—I’ve suspected that when a graph of the annual cost of college crossed the annual income of average Americans, there would be a problem. It recently occurred to me—now that I’m a parent of two high-schoolers—that the real issue is slightly more complicated.
I’m not a statistician, but I suspect that if you were to look at the numbers, you’d see some interesting things. First, the average US family size (2000 census) was 3.14, with an average of .90 children per family. But wait! 52% of US households had no children at all. The average number of children, in families that have children, is 1.86—for convenience let’s call that 2. This means there are really two groups of people in America: half of us have kids and the other half don't. We probably have different perspectives on education as a social good.
So, in a family with children, the average is two children. They tend to be close in age, which means they tend to get to college age at roughly the same time. So, going back to that population pyramid, on average those college-age Americans in that first wide spot have a college-age sibling. About 60% of American kids go to college, and they’re more likely to go if a sibling also goes. So, in those college-oriented families, the parents in that wide spot that centers on age 45-49, on average have two kids in college.
Add to this the conclusions of studies like the one done by the St. Louis Fed, and the picture becomes even clearer. Their “wealth curve” shows that married couples with children have only half the net worth of married couples without children. And the overwhelming majority of the wealth in America is held by people aged 55 to 75. So what we’re looking at is a big batch of Americans coming to college from families of modest means.
Annual average tuition, fees, room and board (TFRB) at four-year private institutions has grown from $18,312 in 1986, to $30,367. Average TFRB at four-year public institutions has risen from $7,528 to $12,796 over the same period. So if you’re the average family described above, you're looking at over $240,000 to send your two kids to private schools, or $100,000 for public. And the bills come over a six or seven year period.
When I was an undergrad, there was no FAFSA. Parents were not automatically expected to pony up the funds. I saved, took out a small student loan, and worked. That’s not even an option for my kids. But beyond the personal implications, what do these changes mean for the American economy? What are the long-term implications of scooping all the savings, home equity, and retirement nest-eggs of middle class Americans, into this one bucket? Or of this group of Americans taking on huge additional debt? And what will happen to an American higher education industry that has become accustomed to these revenues, when people can no longer afford them, when credit dries up, or when the population pyramid shifts again in ten years, and the narrower bands of parents and children reach college-age?