As a student at a private, for-profit collegiate institution, I am well aware of the ever-growing costs of tuition. This is quite evident for me as I compare tuition at Holy Cross to my sister’s tuition at Smith College, another private, for profit institution, who is 8 years my senior. When my sister was a junior at Smith, tuition for both semesters, including room and board, was approximately $52,000 adjusted in 2016 dollars. Even from just my freshman to junior year and accounting for inflation, the cost of tuition at Holy Cross has increased by $4,000 (this past year costing $64,608.15).
Looking back even further, I asked my friend’s dad how much tuition was for him the year he graduated Holy Cross. His answer? Including room and board, approximately $6,000 in 1979. Adjusted using CPI index equates to just short of $20,000 for the year, about $3,000 above the national average for private colleges according to College Board.
The cost of higher education at private colleges and universities has increased 6% above the rate of inflation. According to US News, even from 1995 to 2013, average tuition costs have increased by more than 100%.
So why is tuition rising faster than any other goods and services?
Simple supply and demand graph. Since 1971 to 2013, enrollment in higher education has more than doubled. This increase in demand is likely due to the continued thought that a bachelor’s degree gets a good return in the future. Alongside of that, a high school diploma does not get as far as it once did. Therefore, increased demand leads to higher prices.
Amenities, amenities, amenities. The amount of student services colleges provide these days are also part of the reason for the disparity in tuition costs from the 70’s to now. Many of these student services require hiring more faculty, driving up costs for the college. These services range from counseling to academic assistance to career development.
Loss leader. Colleges and universities are spending more and more money on maintaining the ascetic of campus appeal hoping that they will see a return by attracting more perspective students. Athletics are another prime example of this. Universities put money into athletic departments hoping that schools with good athletics will draw in students and local fans.
Shrinking subsidies. Private colleges have been receiving smaller and smaller subsidies from the government to help with costs, thus making tuition higher to compensate the loss.
All in all, many teenagers are seeing the potential returns of a bachelor’s degree to outweigh the ever-growing costs of tuition.