The Rising Costs Of College

Monday, April 22, 2024
Library Study Students

The Rising Costs Of College

college students in a classroom NSHSS

Since 2000, the average college tuition in the U.S. has more than doubled. Why does college keep getting more expensive?


First: The Good News

NSHSS is here to help you on your college journey, so before we look at the reasons why tuition keeps rising, we’d like to share some resources that show how a college education is attainable on any budget:

While tuition is definitely increasing, this definitely does not mean that college is out of reach for students.


So Why is College Tuition Rising?

In 1980, the inflation-adjusted price for one year of college – including tuition plus living costs – was $10,231.  By 2020, the total price increased 180% to $28,775.  The price of higher education is the fastest-growing segment of the economy, besides healthcare.

Economists point to several factors which explain this rise, including:

  • Financial aid not keeping up with the rate of inflation

  • reduction in state funding for higher education

  • the rising cost of non-academic services

The Importance of Financial Aid

Financial aid isn’t really the cause of rising tuition…though it is definitely one side of the coin.

Federal aid under the 1965 Higher Education Act was designed to permit economically less-privileged students to attend college.  It has proved enormously successful:  There are over twice as many undergraduate students now than 50 years ago.

At the same time, colleges have come to depend on this aid.  Federal and state sources of aid provide about 57% of tuition for public schools and roughly 44% of tuition at private colleges.  

With over 80% of college students on financial aid, this external funding has become an inextricable part of the funding model for colleges.


State vs. Federal Funding

The affordable tuition for in-state residents at public colleges has made a high-quality college education possible for millions of Americans.  The U.S. is widely regarded as having the best public universities in the world.

But even in-state tuition has been rising steadily.

The problem is that state funding is inconsistent – varying with state budgets and economic cycles – and has been decreasing.   While federal aid has remained at the same level or grown, state and local funding has dropped 25% in the last 20 years.  This cost difference has been passed on to students.  

Non-Academic Offerings

The cost of running a college has increased significantly, and this is has proved to be a large driver of increased tuition.  However, many of these increased costs do not relate directly to classroom-based education.

In 1981, post-secondary institutions spent $13 billion on non-academic services.  By 2015, those administrative expenses had risen to $122.3 billion.

Some of these administrative functions have come about because of new federal and state regulations, such as Title IX requirements and the Family Educational Rights and Privacy Act (FERPA). Schools have also tried to outdo each other by offering students value-added services and amenities, such as plush dorms, and gourmet cafeterias. 

Some question whether the high tuition and financial aid burden is justified by offering climbing gyms,  4-star cuisine, and dorm rooms with flat-screen TVs.  They argue that these outside-of-the-classroom perks do not necessarily enhance schools’ primary education mission.   

At the same time, these are the types of amenities that are likely to appeal to prospective students choosing between colleges.  Some schools feel compelled to offer these “extras” – or lose the most promising students to their competition.  


NSHSS is Here to Help

While the rising college costs could be better news, NSHSS is here to help.  Since 2002, NSHSS has supported young academics on their journey to college and beyond as they prepare to become the leaders of tomorrow. The mission behind NSHSS is to recognize academic excellence and honor high-achieving students, providing them with the resources and network to excel in college, career, and community. In doing so, NSHSS connects members with global events, scholarships, college fairs, internships, career and leadership programs, partner discounts, and more. Discover what makes NSHSS worth it to student members and how you can get involved.