US graduate education is not as expensive as it seems!

American universities are broken down in 3 basic types:

In 2021, the median American household earned $71,000 but American private universities cost $80,000 per year.  Most rich-country public universitys are cheaper than American ones. America has the 2^nd highest fees in the OECD, behind England.

“University costs are out of control,” says the conservative Heritage Foundation. Vermont senator Bernie Sanders have advocated for free university and loan forgiveness for years. Both Republicans and Democrats finally agree. University seems to be unaffordable. But is it really?

The Supreme Court does not think so. In 2023 it struck down the White House’s pricey student loan bailout. Contrary to popular belief, public and private university net costs have decreased. Most American undergraduate degrees are affordable, and university is growing cheaper. Few students pay American universities’ sticker price:

• According to the non-profit National Association of College and University Business Officers private universities cut tuition by over 50%.
• Endowed schools are generous. According to US News & World Report, the average Princeton student spends $16,600 per year for tuition and fees (compared to $56,010)

Moreover, tuition is free for families making $160,000 or less. Though public institutions are cheaper, these tuition savings might make private universities cheaper. Alternative 4-year degrees can save Americans money. 2-year public community universitys cost less than 1 year of tuition at a 4-year institution, and students can use those 2 years to a 4-year degree.

University usually pays off, despite the many tales of people drowning in debt for worthless degrees. This is especially important in countries with a high-income inequality. This imbalance makes university worth the upfront expenditure for most people.

The wrong conclusion is a result of the OECD methodology, which compares American institutions’ sticker prices to their peers’ abroad. Sticker prices are growing while net costs are stable or falling. The College Board, a NGO, found that:

So rich pupils subsidize impoverished ones. According to Beth Akers of the conservative American Enterprise Institute, this gap between the sticker price and the net price is confusing yet important to institutions for marketing purposes:

• Consumers link greater pricing with higher quality.
• Merit scholarships disguised as tuition savings flatter kids and their delighted parents.

Even with subsidies, education might feel unattainable to many. Many people in free or low-tuition countries indirectly pay for university through higher taxes. Americans pay fewer taxes, but that lump-sum tuition bill can be intimidating. In America loans can help students and families that can’t pay cash even though accrued interest can quickly make a fair cost outrageous.

University quality and benefits vary. Some for-profit universities are known for recruiting poor and non-white students and offering minimal value. Depending on the studies major the payback time varies.

As Americans are tough to convince about the university degree value, the confidence of Americans in American universities is falling. In July 2023, Gallup found that the number of Americans that have “a great deal” or “quite a lot” of confidence in higher education is steadily decreasing:

• In 2015 it was 57%
• In 2018 it was 48%
• In 2023 it was only 36%