Managing Money In A Crisis
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Why does college cost so much?
From soaring tuition to slashed state budgets — going to school is beyond expensive.
For years, the cost to attend a public or private college or university has increased sharply, and there doesn’t look to be a slowdown anytime soon. And even though the cost of living continues to grow — food, housing, medical care, gas and the like — the cost of education seems to grow faster.
#1 Soaring tuition
The College Board stated in a 2019 report, Trends in College Pricing that an average college budget that includes room and board for the 2019 to 2020 academic school year at an in-state, four-year public college was about $26,590. At a private college, the medium budget averaged $53,980 for the same school year.
That is a sharp increase from 2017 to 2018 where the NCES reported that an average college budget at an in-state four-year public college was $20,050. At a private college, the average budget at an in-state four-year university was $43,139.
#2 The high price of facilities and amenities
In a race to the top, many colleges and universities are touting perks like free laptops and tablets, or showcasing their value with rock-climbing walls, gourmet menus in dining halls, over-the-top housing and luxurious student centers.
Although meant to enhance the college experience, these amenities often come at a high price. And often aren’t actually free — rather the cost is being incorporated into the price of tuition and fees.
#3 Faculty and staff payroll
Hiring the best of the best in every degree field or athletic sport doesn't come cheap. According to the Annual Report on the Economic Status of the Profession for the 2017 to 2018 school year presented by the American Association of University Professors, the average salary for a full-time faculty member only increased by 3% — about in line with inflation. In contrast, presidents of institutions on average made 4.78 times more than the full-time faculty.
Even so, the increases in salaries for university faculty and staff only account for about 30% of per-student spending, as reported in a 2002 study by FinAid. While there are a growing number of administrators earning well over $1 million per year, the average faculty salary in 2018 was just over $78,000, according to the US Bureau of Labor Statistics. If a college employs a staff of 200, you can see how payroll contributes to the rising cost of education.
#4 The cost of graduating later
Today, most college students don’t graduate in four years. In fact, according to Robert R. Neuman, Ph.D, only 33% of all students graduate from a four-year program in just four years. After six years, about 60% of college students complete their college degree. And, each additional year in attendance costs more money.
Considering that it costs an average of $26,590 a year to attend a four-year public college and $53,980 to attend a private college, it’s easy to see how those extra years can really add up.
#5 Slashed state budgets
Since the recession of 2008, most states have slashed college funding, which has increased the price to attend college. According to stats from the Department of Education, in 2017 public colleges got 34% of their funding from state and federal sources. With budget cuts, colleges have been forced to make up the difference by raising tuition costs, having larger class sizes, cutting programs and reducing faculty.
#6 Upgrading to the latest technology
It’s important that colleges give students the education and skills to thrive in a high-tech workforce. But, to learn these skills, students need access to the latest technologies, like powerful workstations and the latest computer software.
Technology upgrades often require more than just an occasional expensive investment in equipment, they also require staff to install and maintain them. And colleges have to cover any additional costs associated with regularly updating both hardware and software.
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Bottom Line
Few people will argue against the statement that attending college is expensive. To help lessen the burden, there are federal student loans, merit scholarships, need-based scholarships, 529 savings plans and grants available to students taking the time to explore their options. Read our guides to learn more about how to pay for college or to compare student loans.
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