Question

College tuition has risen significantly in the last few decades. For the sake of this problem, let us assume that over the last 20 years, the cost of college, including total tuition, room, and board, paid by full-time undergraduate students went from $2,871 to $16,789 at public institutions and from $6,330 to $33,716 at private institutions. This is an average annual tuition increase of 6.1% at public institutions and 5.7% at private institutions. Over the same time, average personal income after taxes rose from $9,785 to $39,409 per year, which is an average annual rate of growth of personal income of 4.8%. Have these tuition increases made it more difficult for the average student to afford college tuition? No, because the increased costs were in all likelihood offset by commensurate increases in financial aid. Yes, because the rate of increase at public institutions was greater than at private institutions, and average students are more likely to enroll at public institutions. Yes, because income did not increase as much as tuition at either private or public colleges and universities. No, because average incomes remained above the average costs of attending both private and public institution

Answer 1

Answer:

Explanation:

To know whether the increase in tuition made it more difficult for the average student on affording the college tuition we have to make a comparison of the increase in tuition with the average rise in personal income after taxes.

The average rise for annual in tuition at public institutions of 6.4% is 30% higher rate of rise compared to the average annual rise in personal income [= (6.4% - 4.9%) / 4.9% = 0.30].

The average annual rise in private institutions of 6.5% is 33% higher rate of rise [(6.5% - 4.9%) / 4.9%] = 0.33).

Thus the calculations reveal that for a typical person it has become more difficult to afford college.