Earlier today I noted the obvious: college costs are skyrocketing. But cost growth is only half of the equation when it comes to deciding whether college is affordable; the other half is income growth. If your costs go up, but your paycheck goes up even more, you are fine. The problem for most Americans is that their real incomes (that is, adjusted for inflation) haven’t even begun to keep pace with rising tuition costs. Over the past thirty years, real median household income has risen only 13 percent. Worse yet, real median household income is actually lower today than it was in 1999.
That is a scary graph for parents and students looking at college. They know that staying competitive in today’s economy demands being above average. But if they have to borrow to pay for college and their future wages follow a path like the one in the graph above, they will have a hard time paying back their debts. As I heard someone say recently, we could be looking at the first generation of college students who will still be paying off their college loans as their kids get ready to head off to college.