Christina Garcia had her heart set on going to the University of Washington in Seattle.

But with annual out-of-state tuition topping $25,000, the recent Cedarburg High School graduate and her family calculated it would cost more than $40,000 per year to go to school at her first college choice. In the end, it only made sense to head to another UW — the University of Wisconsin-Madison.

That decision came as a pleasant surprise to Garcia’s father, a dentist in suburban Milwaukee, who has been “putting money aside” over the years with the idea of helping his two children get through college. Likewise, Garcia’s grandmother had also been saving.

“It’s funny, because grandma said, ‘Don’t worry, I’ve got enough to pay for college,’” says Daniel Garcia, Christina’s father. “But she was thinking about when I went to college. I’m like, ‘That won’t cover one semester today.’ ”

Grandma hadn’t heard: According to a 2008 report by the National Center for Public Policy and Higher Education, average college tuition and fees jumped by 440 percent over the previous two-plus decades — a mark that easily outpaces skyrocketing health care costs, which saw a 251 percent increase over the same time period, and is more than four times the rate of inflation. At UW-Madison, tuition and mandatory fees totaled $2,004 for an in-state undergrad during the 1989-90 school year. Twenty years later, it had more than quadrupled to $8,314. And for the upcoming academic year, that figure will bump up another 8 percent to $8,983.

With state budgets across the country in dire straits due to the lingering economic crisis, continued spikes in tuition and fees, especially for those attending public institutions, seem likely for at least the next couple of years.

No one, it seems, can provide a clear explanation for this escalation in costs. UW-Madison administrators blame the hike largely on what they say is declining state support. Even a 2009 series (“Why does college cost so much?”) by the Chronicle of Higher Education, came up with little that was conclusive: “We started this debate by asking a handful of people — some on the streets of Washington, others in the corridors of power — why tuition has increased faster than the cost of nearly any comparable good or service, including health care, over the past few decades. The question stumped even the most polished policy wonks, and continues to frustrate everyday Americans.”

Like parent Randy Schultz.

“We’re horrendously concerned about these costs,” Schultz, the father of an incoming freshman at UW-Madison, said during an orientation program earlier this month on campus. The sheriff’s deputy from Ashwaubenon also has a son who recently finished his first year at UW-Eau Claire. “My wife and I both came from nothing and worked hard our entire life. We want to do everything we can to make sure our children don’t start their life in the hole tens of thousands of dollars, or worse. But it’s a real stress on the family. It’s very difficult to stash away enough money without living in poverty along the way.”

Although most students, parents and leaders of higher education still view a college degree as a ticket to a brighter future, some are starting to question whether it’s worth it.

“For some, getting that college degree remains a very good investment,” says Richard Vedder, an economics professor at Ohio University and the director of the Washington, D.C.-based Center for College Affordability and Productivity, a higher education think tank. “But for others it’s just not. My main concern with people promoting college as something you must do is that sometimes we fail to point out that the rate of return on your investment isn’t always that high. Over time, we are seeing that as the costs of colleges are rising, those financial benefits of earning a college degree aren’t always keeping pace.”

Adds Schultz: “When you look at the big picture, going to college is obviously the right thing to do. But what families are experiencing now because of the constant cost increases over the years, you just wonder if the time will come when it isn’t doable or a wise investment.”

UW officials committed

UW-Madison officials say they are committed to making their institution accessible and affordable to all, with Chancellor Biddy Martin playing a leading role in ratcheting up efforts to raise more need-based aid to ensure those who most require financial assistance are being “held harmless” from tuition increases. And compared to other Big Ten Conference schools, Wisconsin’s flagship remains a steal for in-state students, with only those attending the University of Iowa paying less in resident tuition and fees ($6,824 in 2009-10).

Nonetheless, what some might consider a bargain, many others view as a growing burden — especially when one factors in all the costs associated with earning a degree. The one-year cost of attendance (including tuition and fees, books and supplies, room and board, travel and other miscellaneous items) was less than $7,000 for an in-state undergrad at UW-Madison in 1989-90. Today, the school estimates the cost for one year of schooling to be north of $20,000.

Add it up, and a kid from Wisconsin will pay about $80,000 to earn a degree at UW-Madison — and that’s if they can make it through in four years. Of the freshmen who entered the university in the fall of 2005, barely half (52.4 percent) graduated within four years.

As the price of earning a college degree continues to race skyward, so does the average amount of debt accrued by students.

According to UW-Madison’s Data Digest, 43.6 percent of undergraduates earning a degree in 1989-90 graduated with debt. On average, these students owed $7,754. Twenty years later, the number graduating with debt increased only slightly, to 48.1 percent. But for those who had debt, the average nearly tripled to $22,858.

“They told us those numbers at SOAR, and it’s like, ‘Geez!’” says Elsa Brettingen, a kingergarten teacher and mother of two from River Falls who was attending UW-Madison’s Student Orientation, Advising and Registration (SOAR) program with her son, Alex, earlier this month. She notes that Alex qualified for just $200 in student aid and will likely take out some student loans. She and her husband are also considering dipping into their retirement accounts. “But this is pretty important to us and very important to Alex, so we’ll all sacrifice a little and do what we need to in order for him to get a great education.”

Schultz says his youngest son, Jon, who starts at UW-Madison this fall, will also have to take out loans, despite the family’s best efforts to live a modest life: “We weren’t driving new cars. We don’t have a cabin up north. We take very reasonable vacations.” Hopefully, he adds, “we can keep it to a small amount over the years.”

UW System spokesman David Giroux says concerns about affording a college education are understandable, especially for those who don’t qualify for significant student aid but are in no position to cover the full costs themselves.

“But we put an awful lot of things on our credit card in this society, and some of them are wise purposes and some of them aren’t,” he says. “There’s a lot of evidence to indicate that a college education — even one where you take out a reasonable amount of debt — is a really good investment. Especially since the vast majority of loans that our students take out are federally guaranteed, subsidized, low-interest loans.”

Payback calculator

In an effort to illustrate to students and their families the value of a college degree, UW-Madison’s website features a “payback calculator.” The tool estimates how much better off an individual can expect to be financially over a lifetime with a college education. The site combines user information, the cost of a UW-Madison degree and the approximate amount of financial aid a student would receive with data from the Census Bureau to give a tailor-made guesstimate.

According to the calculator, an individual who graduates from UW-Madison can expect to earn between $175,000 (if receiving an education degree) and $750,000 (for those with an engineering degree) more in lifetime earnings than someone with just a high school diploma.

But when looking at these estimates, Vedder, of the Center for College Affordability and Productivity, says most people fail to consider that just as many people will fall below the average payback level as soar above it. “So they graduate and maybe they major in sociology or anthropology or history or from the school of education, and they go out and get a job making $30,000 per year,” says Vedder. “And then they find out, gee, if I had become a truck driver or an electrician or a plumber, I’d be making $40,000. So there are times when it’s not a great investment.”

Vedder also notes that his analysis of Bureau of Labor Statistics figures shows there is a diminishing economic advantage to getting that college degree. To back his point, he notes the unemployment rate for someone with a bachelor’s degree today is roughly 5 percent, which is about half the overall unemployment rate of around 10 percent. But back in 1970, he says, the overall unemployment rate among four-year college graduates was only about one-fourth that of the general population (1.3 percent compared to 5 percent). He also notes in a recent blog post for the Chronicle of Higher Education that in 2000 the mean annual pay of women with bachelor’s degrees was 79.4 percent higher than that of female high school graduates. By 2008 that differential had declined a bit, to 76.7 percent.

“So the benefits of going to college have leveled off as the costs continue to rise,” says Vedder. “It’s just something people should think about. In the past, people have sometimes been too optimistic about the financial benefits of earning a degree.”

All would agree that even with the help of tools such as the payback calculator, trying to predict the future (many college freshmen have no idea what career they want to pursue) or pinpoint how much debt is OK to take on is no simple task. And figuring wrong could be a significant burden on a young adult for years to come.

“It’s dangerous when people take out quantities of debt that restrict their career choices,” says UW-Madison history professor Jeremi Suri. “If you take out a lot of loans, how are you going to be able to pay that back if you go and become an elementary school teacher in Racine or a social worker? Sometimes this leads to people going into jobs they wouldn’t necessarily want to do. So that’s a big problem and I don’t think anyone should pretend it isn’t. I’m not opposed to people taking out loans and investing in their future, but you have to be careful.”

Adds Brettingen, the River Falls teacher whose son is set to start school at UW-Madison: “My husband and I don’t make huge salaries. So that’s something Alex is really considering when choosing a career — to try and find something that’s a little more lucrative but that you still love.”

Officials say tuition hikes necessary

UW-Madison officials say tuition hikes have been a necessity as the percentage of the university’s budget covered by Wisconsin taxpayers has dwindled over the years. In 1989-90, the state funded more than a third (33.9 percent) of the university’s budget. This past school year, the percentage dipped to 18.7 percent.

“Historically, the biggest spikes in tuition have coincided with the biggest cuts from the state,” says Giroux, the UW System spokesman. “The funding we receive from taxpayers today subsidizes about 40 percent of the costs of each resident undergraduate, and that’s down from 60 percent 10 years ago.”

But Mike Mikalsen, a spokesman for Rep. Steve Nass, R-Whitewater, calls that “bad math pushed by the education leaders.” He notes the drop in the percentage of UW-Madison’s budget being funded by taxpayers is mostly due to the explosion in the university’s budget, which was $821.4 million in 1989-90 and jumped to $2.45 billion last year.

In fact, it would be inaccurate to say the state has slashed funding to UW-Madison over the decades. The university received $278.5 million from Wisconsin taxpayers in 1989-90, and that number increased to $491.9 million in 2008-09, a rate that outpaces inflation. The state’s contribution did tumble to $457 million this past academic year, due to the massive state budget hole.

Jane Wellman, executive director of the Delta Project on Postsecondary Education Costs, Productivity and Accountability, notes there are several key factors leading to ever-increasing prices associated with obtaining a college degree. She says in times of economic growth states spend a lot of money on higher education and when times are tough they cut funding. “And they do it because they know the institutions can make it up if they have to in tuition.”

Wellman adds that since so much of what colleges do — mainly teaching students in the classroom — is labor intensive, institutions often find it difficult to cut costs, especially when demand is high. And the desire to get into UW-Madison is at near-record levels. In February, the university announced it received 24,990 undergraduate applications. That’s an increase of 726 from the previous year and marked the fifth time in six years the number of undergrads seeking admittance went up. Twenty years ago, 14,193 applied to get into UW-Madison.

Meanwhile, everyone from President Barack Obama to state leaders to the colleges themselves are talking about the need for a larger percentage of the population to obtain some sort of post-secondary degree so the nation and state can be better positioned to succeed in what some are calling a future knowledge-based economy. This past school year, the University of Wisconsin System enrolled nearly 180,000 students, a record number.

“So the last thing colleges want to do is cut services when they think they need to be providing more,” says Wellman. “So you combine those factors and you’ve got the making of a perfect storm.”

According to a Delta Project report released earlier this month, sharp increases in spending between 1998 and 2003 by a handful of colleges and universities created competitive pressures on spending everywhere.

“It’s the old arms race,” says Noel Radomski, director of the Wisconsin Center for the Advancement of Postsecondary Education, a higher ed think tank on the UW-Madison campus. “There’s the race to acquire the best faculty, which costs more money. It means new buildings and a new union and everything else that might attract new students and their parents. Everything is ratcheting up.”

But, Chancellor Martin counters, that’s the price of doing business if the state of Wisconsin wants to continue to have a “world-class research university ... that gives students an unparalleled educational experience, and that attracts talent, investment, visibility and new revenue to the state from all over the world.”

“There is very little UW-Madison can do about the market-driven nature of higher education in the 21st century,” adds Martin. “Given that our tuition is already one of the two lowest in our peer group and that our administrative costs, as a percent of our budget, are also among the lowest, and given repeated budget cuts, we do not have as many levers to pull as some of our peers might.”

Tuition costs may scare off some

The rising sticker price of college may nevertheless keep some students from even considering attending UW-Madison and other institutions like it, fear Radomski and others.

But leaders within the UW System and UW-Madison are trying to make sure that doesn’t happen. In each of the past two years, the UW System’s Board of Regents raised tuition 5.5 percent at the system’s 13 four-year schools. But through a “hold harmless” provision, those coming from families making $60,000 or less won’t pay the increase.

“We do have to do a better job of explaining to people that if you come from a family that has financial needs, you will not be paying the sticker price,” says Giroux. “No one today would walk into an automobile dealership expecting to pay the sticker price. There are rebates and incentives and wiggle room on the sticker price, and people almost always go in expecting a break. Well, the majority of our students do get a discount, too. We need to find a better way of explaining this so people aren’t scared away by the sticker price.”

Yet many attending UW-Madison don’t qualify for aid in the form of grants. In fact, the vast majority of undergraduates on the Madison campus come from families that make significantly more than the state’s median family income of about $60,000.

Prior to the start of the 2009-10 school year, UW-Madison implemented its Madison Initiative for Undergraduates — a tuition surcharge that is designed to raise more need-based student aid, to provide more student support services, and to add more faculty and instructional support to improve access to high-demand courses and majors. Part of this initiative, which raises tuition for in-state undergraduates by an additional $250 four straight years above any increases set by the Regents, states that if students apply for aid, demonstrate a need for financial help, and come from a family earning less than $80,000, they will receive a grant to offset the $250 hike. But of Madison’s roughly 29,000 undergrads, only one in five qualified for this “hold harmless” provision.

“By providing additional need-based aid for students with documented need, we’ve tried to insulate the working-class students and their families,” says Giroux. “This means that people with the ability to pay get fewer public subsidies, and scare resources are reserved for those with real needs.”

But, argues Mikalsen, the aide to Rep. Nass, this formula is putting significant pressures on many middle-class families.

“The classic example, and we hear from people all the time on this topic, is the family where both parents work as teachers,” says Mikalsen. “They each make about $50,000, have two or three kids, and don’t qualify for aid. Those families are being squeezed out.”