This is why state colleges cost so much

Is the cost of college worth the price?

Stubbornly low funding for state colleges is driving up the cost of tuition for American families and exacerbating underlying problems in public university systems, experts said Thursday.

The average student in the class of 2015 is graduating with $35,000 in debt, making it the most indebted cohort on record. The pain is being felt in particular at state universities, where the cost of an education has risen 50 percent faster in roughly the last decade than at private schools, according to Peter Cappelli, professor of management at the Wharton School of the University of Pennsylvania.

As states have cut back on support, the only way to close funding gaps is to raise tuition, he told CNBC's "Squawk Box." Colleges have been able to get away with tuition hikes in part because parents are willing to pay for higher education no matter what the cost, he added.

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The cost of public education has now reached the point at which families must now consider whether their child's post-graduation debt loads are sustainable, he said.

"It's certainly true that you're going to make more money as a college graduate than you will as a high school graduate, but whether you can make enough to pay off the costs of going is an important question," he said.

Cappelli is the author of numerous books on higher education and hiring, including "Will College Pay Off?" and "Why Good People Can't Get Jobs."

He said it is now far cheaper for students who qualify for financial aid to attend private school because affluent institutions are receiving more aid dollars these days. The gap between state university and private school costs for financial aid recipients has narrowed to about $9,000 per year, he said.

The problem is it is much harder to get into Ivy League schools, he said.

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A critical question is whether students will graduate in the first place, he said, noting that only 40 percent of full-time students earn a degree within four years, and 30 million—and perhaps as many as 35 million—young adults do not finish their studies.

The high number of students who drag out studies or drop out is partly down to financial concerns, but also a factor of the way schools structure their programs, he said.

"If you're a parent, that's what you want to pay attention to: How easy is it to complete a degree, particularly in these majors where you have all these requirements to complete?" he said. "I think often people find they have to hang around longer just to complete the majors because they can't get the courses at the times they want to get them."

The fault does not necessarily fall on students who don't want to wake up for early classes, he said. "It's really when the colleges get to be squeezed in terms of resources. Frankly a lot of it is preventable. College majors are not designed around the kids. They're designed around the faculty."

Problems arise when students cannot take courses when professors are on sabbatical and colleges do not find replacements, making it difficult for students to graduate on schedule.

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Dramatic reductions in state's college funding have not only led to higher public tuition, but reductions in areas that help students succeed, said Michael Mitchell, a policy analyst at the Center on Budget and Policy Priorities.

"When a four-year college doesn't have the resources on hand to provide for all of the necessary courses or needs to shut down a class, that has an impact on the students and that has an impact on the quality of education they're going to receive," he told "Squawk Box."

College is also contending with other underfunded initiatives, Mitchell said, including K-12 education and infrastructure and transportation projects. In the wake of the financial crisis, states have a number of priorities they need to reinvest in after seeing huge declines in their resources, resulting in large budget cuts, he noted.

Some states are also cutting taxes rather than reinvesting in areas like higher education, he said.

"We're seeing some states as they're growing more slowly now starting to put some dollars back in, but it's still well below what it was prerecession," he said. "It will take a little bit of time for states to put those dollars back in. But that will only happen if they make responsible budget and tax policy decisions."

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