The price of a college education in the United States was never cheap, but with every passing year, it seems to be spiraling out of control!
So why is college so expensive? And why are the costs still rising?
Here are some of the reasons behind this relentless upward spiral in college costs:
Why The Average American Struggles To Afford College
According to the national per capita disposable personal income, Americans saved roughly $2,010 per person last year.
If they continued to save at this rate, it would take them decades to afford to send just one child to one of the top universities in America.
Even for in-state students attending public institutions, the cost averaged $10,500 annually. In comparison, in-state students saw an increase of 0.8%, and for out-of-state students, a 1% increase in costs per year.
Elite institutions, despite their funding, are even more expensive than public colleges. For example, tuition and fees alone at Harvard University cost an eye-watering $57,246 per year.
Moreover, this is without additional expenses like housing, food, and books. Once those are added to the equation, undergraduates pay a jaw-dropping $95,438 each year.
The Unyielding Surge In College Expenses
The relentless rise in college costs isn’t a recent development. After adjusting for inflation, college tuition has soared by a whopping 747.8% since 1963, as per the Education Data Initiative.
Another report by the Georgetown University Center on Education and the Workforce showed that the average cost of tuition, fees, room, and board for an undergraduate degree spiked by a significant 169% between the years 1980 and 2020.
However, in the same four-decade span, the earnings of workers aged 22 to 27 only managed a meager 19% increase. Thus creating a stark contrast between the skyrocketing cost of education and the sluggish growth of incomes.
The Erosion Of Confidence
The hefty price tag of higher education hasn’t escaped public scrutiny.
A recent Gallup poll conducted in June revealed a stark decline in confidence in higher education institutions, with just 36% of Americans expressing trust.
This marks a significant drop of more than 20 percentage points over just eight years, and rising costs undoubtedly play a significant role in this downward trend.
Why is College So Pricy?
Several factors contribute to the relentless surge in college costs:
1. High Labor Costs
The primary expense in higher education is the employment of skilled professionals, particularly faculty and administrators. Their compensation has risen over time, mirroring the growth in real wages for skilled workers.
2. Limited Technological Efficiency
Unlike industries that have harnessed technology like AI and robotics to cut labor costs, higher education relies heavily on traditional classroom teaching methods.
3. Contingent Faculty
To reduce costs, some universities have turned to hiring contingent, non-tenure-track faculty with lower pay and fewer benefits. This trend has become more prevalent, with nearly 70% of U.S. faculty members in contingent positions as of fall 2021.
4. Income Inequality
The U.S. has witnessed a significant increase in income inequality since the 1970s. This growing wealth gap allows top-tier universities to charge exorbitant tuition fees because affluent families can afford them.
5. Spending On Luxuries
Colleges have allocated more resources to administrative services and luxurious amenities, aiming to attract wealthy students willing to pay a premium for a lavish college experience.
The Net Cost Of College
Surprisingly, despite the surge in sticker prices, the actual net cost that students and families pay has been decreasing.
Adjusted for inflation, the cost of attending a private four-year college dropped by 11% over the past five years, according to College Board data. Public colleges also saw a 13% decrease in the net price over the same period.
The million-dollar question is whether the relentless rise in college costs will continue.
Experts like Catharine Hill suggest that if income levels keep increasing, this trend might persist.
However, the ever-growing burden of student loan debt remains a pressing issue, making higher education a financial challenge for many.
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This article was produced by TPR Teaching.
Caitriona Maria is an education writer and founder of TPR Teaching, crafting inspiring pieces that promote the importance of developing new skills. For 7 years, she has been committed to providing students with the best learning opportunities possible, both domestically and abroad. Dedicated to unlocking students' potential, Caitriona has taught English in several countries and continues to explore new cultures through her travels.