There is more to college costs than tuition and fees, and neither are the primary drivers of rising college costs, according to a new research report from the Federal Reserve Bank of New York.
In addition to those out-of-pocket costs — and the costs of room and board, which are not included in the Fed report — are the opportunity costs that college students forfeit when they attend classes instead of collecting wages. Those costs have been rising steadily since 2012 along with rising wages in a tightening labor market.
“It turns out that the opportunity cost of college is much more substantial than out-of-pocket costs, though both have been climbing in recent years,” write the Fed researchers. “Students pursuing a bachelor’s degree could expect to forgo more than $120,000 in wages, which is almost four times net tuition costs.”
The researchers, Jaison Abel and Richard Deitz, both assistant vice presidents in the bank’s Research and Statistics Group, used data from the U.S. Census Bureau, U.S. Bureau of Labor Statistics and The College Board in their calculations.