The cost of college has been steadily increasing over the past decade (at least), and the ongoing COVID-19 epidemic could make higher education even more unaffordable, research shows.
Some 56% of students feel they can no longer comfortably pay their tuition, according to a June 2020 survey, which polled more than 10,000 current freshmen, sophomores and juniors from 200-plus colleges and universities across the country. The survey also found that 7% of respondents have had to unenroll to find full-time employment or alternative education options.
But even before the coronavirus pandemic hit the U.S., the cost of college was beyond reach for many. It's risen 25% over the past 10 years, according to December 2019 research from CNBC Make It. Today, the average private school costs $48,510 per year, and public universities clock in around $21,370.
Here's what you need to know about the current cost of college.
Why is the cost of higher education rising?
Experts speaking with TMRW pointed to a few top reasons.
1. Less higher-education funding from states
In 2009, after the Great Recession, states started investing less in universities and colleges because they were also facing an economic crisis and had other "more mandatory" financial priorities, like health care and social security benefits, explained Tamara Hiler, director of education at the think tank Third Way.
"What they can cut is the tuition credits or financial aid that they were providing to students," Hiler told TMRW. "Schools were required then to make up the loss of the money they were getting from their state, increasing tuition costs. That's why we saw a pretty big spike after 2010."
Most states' funding for higher education still has not rebounded to pre-recession levels, even if their revenues have, according to a 2019 report by the Center on Budget and Policy Priorities (CBPP). What's more, even schools in states that have increased funding "aren't rolling back the (tuition) increases that they've already made," Anna Helhoski, student loans expert at NerdWallet, told TMRW.
2. More people are seeking out higher education
The amount that many states have been investing in higher education has declined only "somewhat" in recent years, according to Michael Hansen, director of Brooking Institution's Brown Center on Education Policy. But as the number of people enrolling in college nationwide rose, there was less money available per student.
"Once you factor in the fact that more students are going to school, then it becomes a much ... more evident gap in funding that has emerged over the last two to three decades," he said.
From 2008 to 2018, 41 states spent less per student after adjusting for inflation, according to CBPP.
3. Colleges are expanding their offerings
As entry-level jobs increasingly require undergraduate degrees, colleges are competing with each other and, as a result, are making changes on campus to increase the value of the student experience.
"That means hiring more faculty, building more dorms, making other types of capital and technological improvements," Helhoski explained. "These are very real costs that colleges are taking on, and unfortunately, they put more responsibility on the students to meet those costs."
4. The student loan system
Hiler said the ubiquity of student loans may also lead colleges to increase their tuition costs, a theory called the Bennett hypothesis.
"We have a loan system that has ... allowed families and students to say, 'OK, this is not something that we have to worry about right now because we can just borrow to pay for that,' without having to really question deeply what they're actually paying for," she explained.
Hiler added that some schools, especially for-profit colleges, take advantage of the student loan system by setting their tuition at the maximum amount undergrad students are legally allowed to borrow.
"They know that they're setting a price that people can borrow and not have to question that," she said. "There is some controversy around this (theory) ... but I do think there is some correlation."
What is the average cost of student loans after college?
Roughly 62% of college graduates in 2019 took on some student debt and owed on average a total of $28,950. This is slightly down from the 2018 average of $29,200, according to the Institute for College Success and Access. The average U.S. household with student debt owes $47,671, according to NerdWallet’s 2018 household debt study.
What is the most expensive university in the United States?
Columbia University in New York City is the most expensive university in the U.S., according to data from the National Center for Education Statistics. It costs $86,257 a year. Also high up on the list are Northwestern University, outside Chicago, at $78,654 and Barnard College, also in New York City, which costs $78,044.
What goes into the price of college tuition?
Tuition and the total cost of attending a school are different, all three experts stressed. Tuition is usually separate from room and board, and other fees. Helhoski encouraged students considering attending a certain school to look at the net-price calculator on the institution's website, which it's legally require to have.
Generally speaking, tuition covers "anything that's delivering the education aspect," Helhoski said. This usually includes: faculty salaries, institutional support, research, student services, campus maintenance and more.