College affordability has become the preeminent issue in higher education, as student-debt figures have hit staggering levels.
While most conversations center on ballooning tuition costs, which have long surpassed the rate inflation of other consumer goods, last year tuition costs grew at the slowest pace in decades, The Wall Street Journal reported.
Labour Department data show tuition at college and graduate school increased 1.9% for the year ended June 2017 — on par with the rate of inflation. From 1990 through 2016, the average increase was 6% a year — more than double the rate of inflation, according to the The Journal.
The factors that contribute to growing tuition prices are manifold.
- Students, rather than state governments, now absorb more of the costs of college. At public colleges and universities, schools collect more from tuition payments than from state funding, which used to be the case.
- Colleges have seen an enormous uptick in enrollment, according to World Bank figures. In 1980, the US enrollment was 53% (as a percentage of the total population of students who graduated within the last five years). In 2012 it was 94%.
- Growing college enrollment necessitates the hiring of more administrative staff, which can be costly. It also normally means that the expenditures, from state and federal government, per student is lower, again placing the burden of tuition and fees on students and families.
- An increased demand for seats in a college class also allows schools to increase tuition.
But that demand diminished in the face of increasing supply in recent years, as two- and four-year colleges increased 33% between 1990 and 2012, according to The Journal. At the same time, fewer people are enrolling in college as the job market improves.
And the amount that students can borrow in federal student loans hasn’t increased since 2008. Some economists say that the higher the borrowing amount, which is dictated by Congress, the more school charge in tuition payments, because they know students have access to higher loan amounts. The flat rate in borrowing ability over the past decade may have helped to keep tuition prices down.