The average American saved $5,011 last year, but sending a child to a top-rated US university would require 75 years of savings. College costs continue to escalate, posing a significant challenge to families across the nation.
According to data collected by US News & World Report, the average tuition at US private colleges rose by approximately 4% last year, reaching just under $40,000 per year. Public in-state schools saw an annual increase of 0.8% for in-state students and around 1% for out-of-state students, with a cost of $10,500.
However, these figures pale in comparison to the substantial price tags associated with highly rated or selective institutions. Harvard University, for example, charges $57,246 in tuition and fees per year, amounting to an estimated annual expense of $95,438 when factoring in housing, food, books, and other living costs.
Unrelenting Tuition Increases: The Struggle to Afford Higher Education
The rising cost of college education is not a recent phenomenon. The Education Data Initiative found that, when adjusted for currency inflation, college tuition has increased by 747.8% since 1963. According to the Georgetown University Center on Education and the Workforce, the total cost of tuition, fees, room, and board for an undergraduate degree increased by an astounding 169% over the course of four decades, from 1980 to 2020. Unfortunately, wage increases have not kept pace with these rising costs. In the same 40-year period, earnings for workers aged 22 to 27 only rose by 19%.
The financial strain of higher education has taken its toll on public confidence. A recent Gallup poll highlighted that Americans' confidence in higher education has reached a record low, with only 36% expressing trust in the system. The poll, conducted in June, noted a decline of more than 20 percentage points from eight years ago. While the reasons behind this drop in confidence were not specifically probed, experts suggest that the skyrocketing costs of postsecondary education likely play a significant role.
Several factors contribute to the rapid rise in college prices. One major factor is the high cost of employing professors. Skilled faculty members comprise a significant portion of higher education, and their wages have steadily increased over time. Unlike other industries that have leveraged advances in technology to offset labor costs, universities have not witnessed efficiency gains in reducing these expenses. The reliance on human teachers and the traditional classroom model continues to drive costs upward.
To mitigate expenses, some universities have increasingly relied on contingent, non-tenure-track faculty who receive lower pay and lack access to benefits. The National Education Association reports that nearly 70% of US faculty members held contingent positions in fall 2021, compared to 47% in 1987.
According to CNN, another contributing factor is the competition for affluent families. Income inequality in the United States has surged, with the top 10% of Americans holding nearly 70% of the country's wealth. This disparity allows highly ranked universities to charge exorbitant prices as they cater to families who can afford the steep costs. These families, in return, expect luxurious services, well-maintained campuses, small class sizes, and desirable amenities. Scaling back on spending or cutting back on such amenities would risk alienating these affluent students and families.
Moreover, declining state subsidies have added to the burden. State legislatures allocate less funding to public education than in previous years. According to the National Education Association, state funding for higher education declined in 37 states by an average of 6% between 2020 and 2021. Consequently, colleges and universities increasingly rely on student payments, leading to a rise in student loan borrowing.
Student Debt Explosion: The Looming Crisis of Educational Loans
While sticker prices continue to rise, the net price of college-reflecting what students and families actually pay-has seen a decrease. College Board data reveals that the average student at a private four-year college paid $32,800 for tuition and room and board last year. Adjusted for inflation, this represents an 11% decrease in the actual price paid over the past five years. Similarly, the net price for public colleges averaged just over $19,000, reflecting a 13% drop over the same period.
As the debate around the sustainability of rising college costs continues, experts suggest that as long as incomes continue to rise, the trend may persist. However, the growing student debt crisis adds another layer of concern. The average student loan debt at graduation has skyrocketed by 2807% since 1970, even after adjusting for inflation.
With the recent Supreme Court decision blocking President Joe Biden's student loan forgiveness program and the impending resumption of student loan payments, the nation faces a daunting $1.6 trillion in outstanding loan debt. The affordability of higher education remains a pressing issue, requiring comprehensive and innovative solutions to ensure equitable access to quality education for all.
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