By Lindsey Gill for Watermark Insights
- College tuition and fees rose 4.7% from 2020 to 2023
- The cost of higher education has doubled in the last two decades
Higher education tuition has doubled in the last 20 years, with some institutions today hitting the $100,000 mark for a four-year degree. Today’s U.S. students can expect to pay an average of $30,884 for tuition, fees, and accommodation over a four-year degree. These escalating costs have discouraged many prospective students from taking the leap into academia, as well as those experiencing waves of ballooning debt. However, it’s not only students who feel the pinch. As costs rise, higher education institutions and communities feel it, too.
Why is college tuition so high?
- Administrative bloat – Some higher education institutions have more administrators and managers than undergraduate students. U.S. higher education institutions increased administrative staff by 164% between 1976 and 2018, and numbers continue to rise.
- Decreased state and federal funding – State and federal government funding is the lifeblood of many institutions, but the amount they receive has become more uncertain. Even before the recent political shift, 32 states spent less on higher education institutions in 2020 than in 2008.
- Demand for services and resources – Higher education comes at a cost. The complete college experience means maintaining buildings, housing, feeding students, and competitive packages for the increasing number of staff needed to maintain these massive facilities. In addition, institutions must keep up with the blistering pace of technology.
The effects of rising college tuition
- Intensified student debt crisis – Around 45 million Americans have debt from student loans that total more than $1.7 trillion. This debt has skyrocketed in recent years, outpacing most other forms of consumer debt. The average student is borrowing more to cover the increasing cost of tuition.
- Enrollment and retention challenges – In 2023, 73% of employers leveraged skills-based hiring. The job market is also changing. Skills and talent shortages are forcing employers to look beyond credentials. Only 22% of Americans say the cost of a four-year degree is worthwhile, even if it requires taking out loans.
- Workforce and social implications – Many feel forced to abandon higher education in pursuit of immediate earnings, which adversely impacts their capacity to compete for high-paying jobs in the future.
What’s Next: College tuition and fees rose 4.7% from 2020 to 2023 alone, and they continue to rise with every passing year, leaving students struggling to keep up. The rising cost of higher education is multifaceted, and the fever shows no signs of breaking. The costs of running a successful institution contribute to rising tuition rates. These costs, in turn, intensify student debt, challenge enrollment and retention efforts, and create widespread economic disparities. However, higher education institutions are not without recourse.
These robust strategies are assessing budgeting models, prioritizing efficiency, and enhancing retention efforts. Data remains the driving force behind staying agile in higher education. It helps institutions enhance the learning experience and focus on curricula in a way that mitigates the impact of rising costs. Ultimately, institutions must take a proactive and strategic approach to achieve their missions and sustain the value of higher education.
CBX Vibe: ‘Young, Dumb & Broke‘ Khalid
