Did You Know? The Ever-Increasing Sticker Price of College Tuition

College tuition increases across the country have shown no sign of slowing down. According to the National Center for Education Statistics, the sticker price of tuition (before discounts and student aid) for all institutions was $4,885 in 1985; by 2018, it was $23,835, a 387 percent increase.

That’s a dramatic increase over a few decades.

The excess of state and federal funds for higher education has allowed colleges to increase costs. Then-secretary of education William Bennett stated in 1987 that “increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase.” A Martin Center report by president Jenna A. Robinson looked at the research for and against the “Bennett hypothesis” and found that it suggests federal student aid does indeed contribute to increasing university tuition.

“For nearly half a century,” Robinson wrote, “the cost of higher education has risen faster than the pace of inflation,” and the costs of higher education have increased faster than even medical costs.

One explanation is that the federal government guarantees new students for colleges with easy-to-get student loans. Robinson noted that “a major contributing factor to this explosion of debt is that the bar to receive a federal loan is exceedingly low. The federal government issues student loans to any student who attends a qualified and accredited institution and meets minimal criteria.”

Students don’t always consider the long-term costs of taking on debt, and many borrowers don’t leave college with a degree in hand. With little outside pressure to control costs, colleges can attract more students by overspending instead.

Other college costs beyond tuition have left many students in a tight spot. Transportation, housing, food, laptops, and other living costs add up quickly. More students are reporting being food-insecure and campus food banks are more common than a decade ago.

Colleges and universities preach that they are helping students, but they give many students little choice in paying high tuition prices. Higher education should not be enabled by government subsidies to keep raising tuition prices. Federal aid would not be needed if prices were affordable.

Robinson concluded her Bennett hypothesis report with three important points for policymakers to keep in mind. Aid policies need to put downward pressure on tuition prices, focus aid on genuine needs, and end or reduce subsidies that encourage higher prices. Then, students can pursue an education without debt weighing them down or stressing them out.