Why is College Expensive? And Tips for How to Make it Affordable

Why is College Expensive? And Tips for How to Make it Affordable

If you’re a parent planning for your child’s future education, the cost of college can be overwhelming. Based on today’s rates and assuming a 5% annual cost increase, the total cost of attendance of four years at a public, four-year school could be nearly $200,000 within the next 10 years.

But why is college so expensive? Many factors are responsible for driving prices up, from decreased state funding to higher demand for high-end campus amenities. However, there are ways to lower education costs and make college more affordable.

The Cost of College Has Steadily Increased Little by Little Each Year

The cost of college has increased steadily over the past couple decades. During the 2009-2010 academic year, the average cost of tuition, fees and room and board was $18,256 at a public four-year school. For the 2022-2023 academic year, that cost was $23,250 — a 27% increase.

Private schools saw similar price increases. The average cost in 2009-2010 for a private non-profit university was $42,547. For the 2022-2023 academic year, the cost increased by 25% to $53,340, which is about the same growth rate seen in public schools.

These increases are the result of small, incremental increases each year to account for inflation, new amenities for students, and updated facilities to provide the best experience possible for each student. We looked at all of the reasons why college has become expensive over the years.

infographic about public four-year and private non-profit

Reasons Why College is Expensive

Why are colleges so expensive these days? There’s no single factor driving the rising prices. Instead, the price increases are due to several contributing factors.

1. Inflation rates are high

Over the past two years, inflation has been a major concern. Inflation was over 9% in June 2022 and is now at about 5% — still above the government’s target rate.

High inflation makes everything more expensive. Schools have substantial overhead costs, including building maintenance, supplies, landscaping, and food. Their regular expenses are higher thanks to inflation, and they pass some of that cost onto students through higher tuition and fees.

2. Colleges spend more on advertising and recruitment

After decades of growth, the number of students going to college slowed in recent years. In fact, Inside Higher Ed reported that college enrollment numbers have fallen for five semesters in a row.

Declining enrollment means schools must compete for incoming students more than ever. As a result, they are spending a significant amount of money on advertising and recruitment efforts.

Collectively, colleges spend millions each year on everything from television commercials to social media ads and billboards. Schools need to raise their tuition and fees to afford those advertising efforts.

3. Campus amenities are improving

To attract new students, many schools built state-of-the-art student recreation centers and other amenities. Consider these examples:

  • University of Missouri: Mizzou’s Tiger Grotto features a zero-entry pool, hot tub, sauna, steam room, and a lazy river.
  • High Point University: This campus has a variety of high-end amenities, including an indoor track, multiple pools (including indoor ones), jacuzzies, ice rinks and dining centers with offerings from Subway, Chick-fil-A, and Starbucks.
  • University of Wisconsin-Madison: At this school, students can hang out at the Sett Recreation Center. It features perks like an actual bowling alley, a rock climbing wall, and pool tables.

These school perks aren’t that unusual; more colleges and universities are developing expensive student centers and dorms to appeal to new applicants and to make students’ on-campus experience comfortable and enjoyable. As a result, the cost of attendance is much higher.

4. Schools receive less money from states

In general, states are spending less on public colleges and universities than they did in the past. The National Education Association found that funding has declined by about $1,500 per student. To make up for the lost funding, schools have increased their tuition and fees, passing the cost to families.

5. Federal financial aid has declined

Federal financial aid is one of the most common forms of financial assistance for college students. Federal aid can come in the form of federal student loans, Pell Grants, and veterans’ benefits.

However, federal financial aid has significantly declined. According to The College Board, total federal grant aid declined by 32% in inflation-adjusted dollars between the 2011-2012 and the 2021-2022 academic years. Pell Grants, a federal grant issued to low-income students, declined by 36%, decreasing by $14.6 billion.

With less federal aid available, colleges have to make up for some of the shortfalls by offering their own grants, scholarships and even institutional student loans — which add to the school’s expenses.

7 Tips for How to Make College Affordable

How can I make college cheaper? It’s a common question. With these seven tips, you can lower your education costs:

1. Attend community college

Community colleges cost significantly less than four-year schools. By attending a community college for the first two years of school and transferring to a four-year school to finish your degree, you can slash the cost of a bachelor’s degree.

2. Choose an in-state public school — or look for a reciprocal program

An in-state public school will cost half what a private school costs. Attending college within the state where you live is one way to reduce your expenses.

But if you want to attend school out-of-state, consider a public university that is part of a reciprocal network. Many states participate in networks that allow students to go to school in another state but pay in-state tuition rates.

You can find out if your state participates in a tuition exchange or reciprocity program by visiting the National Association of Student Financial Aid Administrators’ website.

3. Submit the Free Application for Federal Student Aid (FAFSA)

Not only does the FAFSA help you qualify for federal financial aid, but schools, states and non-profit organizations often use it to determine your eligibility for other aid, including grants and work-study programs.

Submit the FAFSA by the federal, state and school deadlines to get the maximum amount of aid possible.

4. Research scholarships and grants

There are billions of dollars in grants and scholarships available. They’re issued by non-profit organizations and private companies all over the country, and you can apply for multiple awards and combine them to reduce your college costs.

Find scholarship opportunities by searching databases like FastWeb, Scholarships.com and The College Board.

5. Consider a part-time job or side hustle

If you can comfortably handle your college coursework, getting a part-time job or side hustle can allow you to earn money to pay for some of your expenses, such as your meals or textbooks.

Resources like SnagAJob and SideHustleNation can help you find jobs that are suitable for a college student’s schedule.

6. Commute to school

Although living in the dorms can be appealing, college room and board can be expensive. The cost of your dorm and a college meal plan can add $10,000 to $15,000 per year to your cost of attendance.

If your parents are willing to have you live at home while you’re in school, you can save a significant amount of money by commuting to school. Even if you pay your parents rent, living at home can be much cheaper than living on campus.

7. Apply for private student loans

If your financial aid package isn’t enough to cover the full cost of attendance, you can use private student loans to pay for the remaining balance. As a college student, you may not meet the requirements for a private loan because you don’t have a full-time job or established credit history. But you can improve your chances of getting a loan — and qualifying for a competitive interest rate — by asking a parent, relative or friend to cosign the loan.

Planning for college expenses

Now that you know why college is so expensive, you can start coming up with a plan to pay for school. While college costs are higher than they were in the past, you can make the expense more manageable by exploring your financial aid options, choosing a public in-state school and applying for grants and scholarships.

Learn More: A Complete Guide to Scholarships for College Students


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