How Inflation Has Impacted College Tuition Across the Country
College tuition is not known for coming cheap, no matter the decade, but it has gotten decidedly pricier in recent years. In terms of keeping up with inflation, however, there are some encouraging signs. Inflation is that term for the set of economic forces that drive up the costs of all our goods and services. Right now, the United States is in a period of significantly increased inflation, at a rate of 8.6%, considered the highest rate since 1981.
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The three biggest factors driving inflation right now, according to NBC News, are an increase in labor costs, energy prices at an all-time high and rising interest rates. Though, it has also been aggravated by the pandemic and Russia’s war in Ukraine. Whatever causes inflation, however, we feel it everywhere — even in college tuition.
According to a recent report from the Georgetown University Center on Education and the Workforce, in the 40 years between 1980 and 2020, the average cost of the college experience — including room, board and tuition — rose by a staggering 169%. A college student in 1980 could attend a four-year college for about $10,000 per year, according to the National Center for Education Statistics. By 2019-20, the total price increased to over $33,000.
In general, according to FinAid.org, tuition increases at about twice the rate of inflation, or 8% per year. However, in recent years, the good news is that rate may actually be slowing down.
To measure the year over year increase in tuition, GOBankingRates drew data from the Bureau of Labor Statistics Consumer Price Index for All Urban Consumers. What we found is that while the national average for tuition, other school fees, and child care increased by 2.5% between May 2021 and May 2022, college tuition and fees only increased by 2.1%, and high school tuition and fees increased by 2.9%.
Between February 2022 and March 2022, college tuition only saw a negligible 0.2% increase, same for March 2022 to April 2022, and only 0.1% from April 2022 to May 2022.
Inflation isn’t the only thing affecting college tuition, however. According to BestColleges.com, college enrollment has been declining during the pandemic, likely as a result of health concerns on campuses and the high cost of tuition. From fall 2019 to 2021, undergraduate enrollment dropped by 6.6%, which translates to a loss of around a million students. As a result, some colleges have been forced to lay off faculty and staff and increase tuition rates.
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Colleges such as Boston University and the University of Virginia have announced increases in tuition and fees for the 2022 to 2023 academic year. Additionally, the cost of federal college loans will be more expensive for the 2022 to 2023 school year, as loan interest rates are increasing from 3.73% to 4.99%, and graduate loans from 5.28% to 6.54%, according to the United States Treasury.
The one bright spot for college students and their families is that, while inflation will continue to drive college tuition upward, it may not be at the same alarming rate as the rest of the economy.
In contrast, look at some of the other goods and services that inflation has driven upward much more significantly recently. The general rate of inflation is higher than usual, reaching 8.6% in May, 2022, according to The Bureau of Labor Statistics’ (BLS) Consumer Price Index. The cost of food at home (i.e. groceries) was up 11.9% in May 2022 from the year prior, while food away from home was up by 7.4% for the same time period.
Additionally, commodities were up 8.5% and services 5.2%. Energy was up by a whopping 34.6%. All of this signals harder times ahead for everyone to afford the same goods and services you have always purchased.
However, The Wall Street Journal suggests that once a college student has paid for their tuition, being a student is a kind of safety against inflation since most major costs are already paid, including such essential things as room, board and meals, when those are provided by the school.
Additionally, they point out that in general and on average, tuition is rising slower than inflation, and this is good news for parents and college students. While it doesn’t solve the larger problems of inflation, it means that at least getting a college education isn’t immediately going to become a massively more expensive enterprise, as well.
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This article originally appeared on GOBankingRates.com: How Inflation Has Impacted College Tuition Across the Country
