High Tuition and its Economic Causes by Zach Hall

        In today’s world of college education most students can relate to having some sort of a financial problem with school expenses. Much of it is due to America’s increasing trend of higher tuition over the decades. Due to increases almost every year tuition causes some families to reconsider college for their children and wonder if the price is worth it. Firstly, we’ll look into why current tuition rates are so high and economic causes, then how these costs have affected students.

        Current tuition rates can be attributed to budget cuts and also University’s expenses and funding when observing the economy. If you look at the trend of tuition costs over the decades, “The average cost of tuition and fees at a private, non-profit, four-year university this school year was $31,231—up sharply from $1,832 in 1971-1972 (in current dollars). At public, four-year schools, tuition and fees cost about $9,139 this year. In the 1971 school year, they added up to less than $500 in current dollars, according to the College Board.” That’s a significant rise in costs considering the sharp increase in price level. The sharp increase is mainly due to college tuition inflation rates being significantly higher than the rate of inflation at “almost six percent above the rate of inflation”. Part of why these inflation rates are higher is due to the Recession in 2007 that caused, “states closing some $425 billion in budget shortfalls”. In result most states had to cut some sort of funding to public universities forcing schools to raise tuition rates in order to cover these losses. In fact, “By 2013, states had cut higher education spending to $2,353 per student—about 28 percent less than in 2008”. So if you add that up millions of dollars are being cut from public universities in order to fund other programs. Many of these programs include Mandatory spending programs like pension and healthcare for retirees and Medicaid for lower income families(Schoen). In the incident of a recession the state governments are forced to cut money from other programs in order to cover these mandatory actions and the education system is suffering from the allocations of the current budget.

        High tuition costs due to the current economic makeup have caused families to take out student loans and some families in effect are drowning in debt. The current college tuition inflation rate of “6 percent above the rate of inflation” has caused tuition prices to significantly outweigh the price levels of family income. In fact, “Between 2000 and 2013, the average level of tuition and fees at a four-year public college rose by 87 percent (in 2014 dollars); during that same period, the median income for the middle fifth of American households advanced just 24 percent.” As tuition rates increase more and more families don’t have enough income to be able to cover for these expenses. This rate is very unsustainable and forces many families to take out student loans, which currently have, “1.2 trillion dollars in national debt”.  

        With the current tuition rates being what they are, more economic and personal financial problems will continue to arise. If a solution isn’t implemented tuition will continue to rise and there could be serious negative implications of the current system. An implemented solution could drastically improve economic balance, allowing more students to be able to attend college.

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http://www.cnbc.com/2015/06/16/why-college-costs-are-so-high-and-rising.html