The Economics of a Degree in a College Town

Over the last 20 years, the mindset of Americans attending college has shifted dramatically. College was once seen as the best decision a student could make in their academic career, but now, some potential students and parents see college as a negative value proposition.

The data say otherwise, however, according to Michigan State University professor Charles Ballard. And current MSU students and alumni say that while cost is clearly a concern, there is clear value to a college education.

Ballard, an expert in the economics of education, says that since the 1980s, the rate of return of earning a college degree has gone up significantly and has stayed that way especially for STEM degrees. The professor said that misinformation has discouraged students from attending college and that’s unfortunate, but the true value of an education only comes when students stay in school.

“The benefits [of a college degree] will only be realized by students who finish their degrees. That’s why perhaps the best thing that has happened at MSU in this century is the set of student-success initiatives, which have helped to increase graduation rates.”

Some potential students don’t get that far in the thought process. The projected costs of tuition without aid can seem to be too daunting to risk. Like other schools, Michigan State has tried to address this issue with the introduction of the Spartan Tuition Advantage scholarship.

First-year in-state students who are Pell Grant eligible and who come from a household with an income under $65,000 per year, are automatically eligible for the scholarship under the program, which will cover full tuition for up to eight semesters through a combination of federal, state, and institutional gift aid.

The program reaches into the lower reaches of middle-income families. The median household income for the state was $68,505 in 2022, according to the U.S. Census.

For a lot of potential students and parents in the U.S., one of the biggest concerns around college is the steadily rising cost of attending a four-year university.

In the 2000-01 academic year, the average total cost (tuition, room & board, and fees) of attending a four-year public university in the U.S. was $13,938 in real dollars, according to the National Center Education Statistics (NCES). That number increased to a peak of $23,063 in the 2019-2020 school year. That’s a 65% increase in just 20 years.

There was a slight dip in the cost of college in the years that followed, most likely due to Covid-19 and classes being moved online. Still, the overall increase in tuition has shifted the mindset of parents and students drastically and changed the equation of college selection.

Sofia Aguirre, an MSU student studying Digital Storytelling says costs played a huge role in her selection of MSU. “When I was planning to go to college, the thing that I was most nervous about obviously was money, like how much is it going to be? I literally chose Michigan State because it was the college that gave me the most scholarship.”

That sentiment is not uncommon in East Lansing, or on many college campuses, but it is just one of the many factors that can be a deciding factor on whether or not a student will attend a university.

Lost in some of the dollars-and-cents equations for students, is the other part of the college experience: students having a chance to figure out what they want to do with their lives and explore different career paths. College can be an opportunity to be independent and learn what you like and dislike in your studies, but the higher price tag on that experience means it is harder to just go into freshman year “undeclared.”

Josh Wright, a recent alumnus of Michigan State University, says he was worried about what his major was going to be, and that was one of the main reasons why he attended community college for two years.

Even after those years in community college, he said he still wasn’t 100% sure what he wanted to do. “I chose statistics which obviously changed … I went straight to graphic design, a complete 180, and I’m so happy I did that.”

Even with a degree in something you may love, there is still the worry that you won’t make enough to pay back the tuition. With some majors within the STEM category, it can be easy to make back the money to pay off loans, but in other, more creative majors it can be more difficult.

This is part of a series of posts from students at the Michigan State University Journalism School. The students will be covering four counties around Michigan during the 2024 campaign for the Detroit Free Press working with the American Communities Project typology.