Why is College so Expensive in America

A 2018 OECD (Organization for Economic Cooperation and Development) report revealed that the U.S. spends more money on college than any other country in the world. The average four-year public university costs about $25,000 per year, while the average private institution costs around $40,000. However, only 3.6% of the federal budget goes into higher education, causing higher tuition for students in order for colleges to remain to function. Additionally, factors such as a surge in demand, a lack of state funding, and ballooning student services have all caused the cost of college to skyrocket.

Increase in Demand

Richard Vedder, an economics professor at Ohio University, explains that “the demand for high education has gone up. Once demand goes up, and nothing else happens, they will raise the prices.” According to the department of education, U.S. colleges expected the number of students who enrolled in 2017 to be 5.1 million more than the number that enrolled in 2000. In order to keep up with the costs of millions more students enrolling, universities increase tuition per student, since state and even federal funding is not enough.

State Funding Decrease

Many state governments have cut their higher education spending, and let colleges replace the lost revenue with tuition increases. The College Board also conducted a study that found tuitions at public colleges and universities rise faster when government funding slows down or sees little growth. For public universities, state appropriations make up a large portion of the college's revenue, and in recent years, the state appropriations have not been enough for the number of students.

More Faculty and Staff

Higher education is a labor-intensive industry and requires highly trained faculty and staff. As the number of students in colleges increases, colleges have to hire, and pay, more faculty and staff. Further, many colleges pay for health insurance and other benefits for their staff, causing a large percent of revenue to go towards paying those who work at the college.

Additionally, colleges are hiring increasing numbers of non-academic staff, such as career counselors, mental health counselors, or diversity directors to benefit students. Also, as college sports become more prominent in the public sphere. U.S colleges employ armies of athletic staff that must be paid somehow.

In order to make more money, colleges seek to enroll more students. This is done through many financial aid and admission officers, advertising staff, and outreach teams, all of which cost large amounts of money.

Covid-19 and College

In contrast to the rising enrollment numbers and tuition costs throughout the 2000s, the Covid-19 pandemic led to steep drops in enrollment, and colleges responded by reducing tuition to lure students back, or by keeping it at a flat rate. Williams College in Massachusetts and Hampton University in Virginia are two examples of colleges that cut tuition by 15%. For colleges that increased tuition, it was the lowest increase in 30 years, with tuition rising 1-2% for both public and private universities.

Making College More Affordable

While the cost of college in America is still exorbitantly high, there are ways for individual students to decrease their tuition.

Look for scholarships that are typically offered by local or national organizations
Make a plan to graduate in 4 years
Considers in-state schools
Apply for regional tuition exchange programs, which allow out of state students to qualify for reduced tuition