Unseen College Costs- A Lesson in Opportunity Cost

The last thing a student wants to hear is that college is even more expensive than the already relentless tuition hikes. While this expense is not a direct bill to pay and the main reason why it is so often unseen, it is highly significant when examining the true cost of a college education. In order to illustrate this very clearly, let us consider attending Penn State University. The cost of tuition for an in-state student for one year is $15,000 and for an out of state student tuition is over $26,000. While a four-year stay will cost $60,000 and $104,000 respectively, 63 percent of college freshmen will take more than four years to complete their bachelor’s degree and spend even more.

While this is the obvious cost of attending college, we must now ask what the student gave up by choosing to continue his education. After high school graduation, many students choose to enter the workforce and typically earn $30,000 a year. Being employed for the four years that it takes to earn a college degree is $120,000 and is the opportunity cost of going to college. Opportunity cost is important to understand because with every choice you make you get and give up something whether you choose to go out and exercise and miss out on your favorite T.V. show or go to college and miss out on income you could have made while in the work force. Opportunity cost is important because you must recognize the complete consequences of your choices and all the tradeoffs you make with every decision. 

Click Here to watch a short video by Prof. Mario Diaz about Opportunity Cost! I will be at an economics seminar at Bryn Mawr University this coming week with the Institute for Humane Studies, so new blogs will not be out until next week. Stay tuned!