THE NEW LUXURY ITEM: COLLEGE

Chicago Tribune: College graduates can expect to earn $20,000 more per year in income, on average, than those with just a high school diploma. In one sense, that makes college something of a bargain. In another sense, it makes earning a college degree imperative if one hopes to have an upwardly mobile financial future.
Increasingly, though, college is becoming a luxury only America's more well-off families can afford.
For the last dozen years, increases in college tuitions have far outpaced both inflation and increases in family income. Upper-income families may experience discomfort while balancing their checkbooks, but middle- and lower-income households with college-bound kids feel something more like a locomotive crash.
In 1980, a year's tuition at a public four-year college ate up 13 percent of income in the lowest-income families. By 2000, tuition at these colleges and universities consumed 25 percent.
Student debt has increased, and financial aid for the neediest students has lost ground to aid programs and incentives for students without need. In 1981, according to the National Center on Public Policy and Higher Education, 91 percent of state financial aid was allocated on the basis of need or a blend of need and academic qualifications. By 1999, only 78 percent of state aid took need into account.
Budget shorfalls
As if this weren't enough bad news, states facing severe budget shortfalls are scaling back their support of colleges and universities. Nationwide, states already are planning to cut $5.5 billion from higher education over the next two years.
All of this only partly explains the rising cost of college education. Other reasons abound. Celebrity professors are getting ever more lucrative offers to attract them away from private industry and from competing colleges. Health care benefits are soaring. The drive to transform universities into resorts with the latest gee-whiz technology and Olympic-sized swimming pools doesn't come cheaply.
Increasingly, the sticker price doesn't really reflect what students are paying. At the university of Illinois, for instance, half of the students pay less than the full cost of tuition. Nearly a third pay no tuition at all. Some are students who couldn't otherwise afford college. But many are graduate students, athletes, children of the politically connected, children of university employees and top-scoring applicants.
Private universities have been doing this for years in order to boost school prestige. Publics now are following suit. The effect is to shift the financial burden onto those who don't fit into the priority categories.