Why Colleges Are So Expensive

Higher education has been viewed as a gateway to a brighter future and a successful career for generations. However, over the past few decades, college costs have skyrocketed, leaving many students and their families burdened with overwhelming student debt. The dream of higher education once considered an accessible aspiration, now comes with a staggering price tag.

According to the College Board, between 1980-2015, tuition for public colleges increased by 400%, and tuition for public schools rose by 129%. Now, an undergraduate degree can range from $25,000 to over $300,000.

Understanding the reasons behind these massive increases in tuition can help students find accessible ways to fund their college education. In this article from Bold.org, we will explore the factors contributing to the rising cost of college in recent years and how students can avoid accruing student loan debt.

Despite this bleak outlook, there are still ways that the average college student can reduce the cost of college. Applying for scholarships is an excellent way to avoid racking up student loan debt and attend college for a more accessible and affordable price. Creating a free profile on Bold.org gives current and prospective college students access to hundreds of exclusive scholarships!

Students can browse available scholarships by category on Bold.org to find scholarships that fit their interests, identities, and career aspirations. They can also check out this blog post to learn about the best scholarships for college students in 2023.

Why College Is So Expensive Today

A multitude of factors have contributed to the rising cost of college education in recent years, including an increase in administrative costs, declining public funding, technological advancements, campus amenities, and, most importantly, an increase in demand for a bachelor’s degree. With more career opportunities requiring college, colleges, and universities in the United States have received more college applicants than ever, allowing them to increase their tuition and retain the desired number of students.

Growing Demand

According to the laws of supply and demand, college prices and tuition have risen in response as the demand for a bachelor’s degree increases.

In the past, a high school diploma may have sufficed to secure a stable job with reasonable earning potential. However, the contemporary labor market paints a different picture. Rapid technological advancements and a shift toward a knowledge-based economy have transformed the skills required for employment.

Employers increasingly seek candidates with specialized knowledge, critical thinking skills, and the ability to adapt to a changing work environment. As a result, a bachelor’s degree has become the de facto entry ticket into many professional fields.

While the demand for a bachelor’s degree skyrockets, the supply of accredited institutions in higher education has remained relatively static. This imbalance has created a situation in which colleges and universities can charge more for a college education and still receive a significant number of applicants. Ultimately, the fundamental laws of supply and demand contribute to this upward trend in college costs.

The effect of supply and demand on college tuition may surprise many students who similarly see higher education institutions as their K-12 education. In reality, colleges and universities operate like businesses in a highly competitive higher education market, where buyers–students and their families are increasingly willing to pay hundreds of thousands of dollars for a bachelor’s degree. By marketing their brand new amenities, sports teams, study abroad programs, and more. Colleges seek to attract wealthy students who can allow these institutions to turn a massive profit, making higher education increasingly inaccessible for the average student.

Declining Public Funding

Another reason college tuition may have become so expensive in the past decade may be related to a decline in public funding for higher education.

Historically, public institutions, ranging from community colleges to flagship universities, have received substantial financial support from their respective state governments. However, in recent years, state funding for public universities has experienced a steady decline.

As public institutions receive less support from state governments, they are forced to find alternative sources of revenue, leading to tuition hikes. Consequently, the burden of funding higher education has shifted from the state to students and their families.

Interestingly, a New York Times article from 2015 argues that the reduction in state funding in recent years is a course correction for a massive 390% increase in public funding from 1960-1980. Rather than a decline in public funding, the transformation of higher education into a highly competitive business sector may be the true reason college tuition has skyrocketed.

Administrative Bloat and Increased Overhead Expenses

A significant factor driving the rise in the cost of college is a noticeable increase in administrative costs and overhead expenses at colleges and universities.

The growth in non-teaching personnel, such as administrators, coordinators, and support staff, has wildly outpaced the increase in faculty members in recent decades. To illustrate, administrative positions at colleges and universities grew by 60% between 1993 and 2009. In contrast, the number of full-time faculty members has stagnated since the 1970s.

Operating from the business model, universities have become increasingly de-incentivized to increase faculty salaries or hire full-time and tenured faculty. Many universities now hire more faculty that are part-time, adjunct, and lower-paid to maximize their profits, making teaching positions increasingly unstable and underpaid.

As a result, full-time faculty salaries have remained largely the same in the past four decades. In fact, the average salary of faculty who teach at universities has decreased since the 1970s due to the increase in part-time, lower-paid faculty.

From this data, it’s clear that the increase in administrative personnel has contributed to rising costs and tuition fees rather than increases in faculty salaries.

Check out our Scholarship Blog to learn more about scholarships and financial aid.

Technological Advancements and Infrastructure

In the digital age, when technology shapes almost every facet of modern life, it’s no surprise that higher education has wholeheartedly embraced technological advancements to enhance the learning experience and increase the prices they can charge students in the business model.

Educational institutions now invest in cutting-edge hardware, software, and IT infrastructure to support a variety of digital tools, such as online courses, learning platforms, virtual labs, and interactive simulations. This investment includes the initial purchase of equipment and ongoing maintenance, updates, and staff members, contributing to the hike in college tuition.

Investment in Campus Amenities

Furthermore, infrastructure enhancements and student services designed to attract students also add to hefty tuition costs. Attractive amenities such as gyms, recreational facilities, sprawling libraries, and state-of-the-art laboratories require significant funding.

In the modern day, a college education is not only seen as a stepping stone to a successful career but as a holistic experience that includes extracurricular activities, social networks, and immersive experiences that require extensive funding. The drive to attract students to enroll has fielded what some critics call the “amenities arms race,” wherein colleges feel compelled to outdo each other with luxurious amenities to entice prospective students. Ultimately, these amenities create a selling point that sets an institution apart from its competitors – and students and their families are asked to bear the cost.

How to Make Your College Education More Affordable

Apply for Scholarships

Scholarships have the potential to make higher education more affordable for more students. Applying for scholarships can significantly alleviate the burden of college tuition and pave the way to a debt-free educational journey.

Many kinds of scholarships are available to students of varying backgrounds and educational interests. For example, merit-based scholarships recognize and award academic excellence, talent, leadership, and community involvement. For students who have excelled in high school or college classes or demonstrated exceptional skills, merit-based scholarships can alleviate financial pressures.

Check out this list of the best merit scholarships with upcoming deadlines on Bold.org!

Need-based scholarships are designed to provide equal opportunity for students with economic needs. These scholarships acknowledge that financial hardship should not hinder college education and help level the playing field for students of diverse socioeconomic backgrounds. Apply to need-based scholarships on Bold.org with upcoming deadlines by creating a free Bold.org profile!

Apply for Financial Aid

Financial aid in the form of grants, federal student loans, institutional scholarships, and work-study opportunities is another tool that can help college students access college education without incurring massive student debt.

Grants or “gift aid” are funds awarded based on financial need and academic merit and may be offered through federal financial aid programs or institution-specific scholarships. Unlike loans, grants do not need to be repaid–just like scholarships!  Students may receive grants as part of their financial aid package when they apply for financial aid by filling out a FAFSA.

Financial aid can also include work-study programs that allow students to earn money while pursuing their education. Many schools have publicly funded work-study programs in the form of part-time employment, often on campus, that aligns with the student’s academic and career goals.

Finally, although they still fall under student loans, federal student loans usually offer more favorable policies than private loans and are easier to pay off. You can learn more about how to apply for federal student loans through this exclusive Bold.org article!

Attend Community College or Online College

For students seeking a cost-effective approach to higher education, the community college route can be an accessible and affordable launchpad for their academic pursuits. Community colleges have lower tuition rates, flexible course options, and opportunities for seamless transfer to four-year colleges, offering a strategic pathway to achieving educational goals without breaking the bank.

Community colleges' cost per credit hour is typically a fraction of what students would pay at a four-year institution. By spending the initial years of higher education at a community college, students can complete general education requirements and introductory courses at a fraction of the cost of a four-year university, setting the stage for a more affordable overall educational journey.

Online degree programs through an online college is another affordable option for earning your bachelor’s degree. Online colleges typically have much lower tuition costs than a traditional, on-campus university. They may even allow students to pay per course or per credit hour rather than yearly tuition. Furthermore, the online college offers flexibility and adaptability for students with work or family obligations, including nontraditional or adult students or students with children,

Frequently Asked Questions About College Costs

How expensive is a bachelor’s degree?

The cost of a bachelor’s degree can vary widely depending on several factors, including the specific university or college, the state in which it is located, the program of study, whether the student is an in-state resident or out-of-state resident, and the type of institution - public or private.

According to Education Data, the average cost of an undergraduate degree ranges from $25,707 to over $218,000. On average, tuition and fees for in-state residents at public universities tend to be significantly lower than those for out-of-state residents or students at private institutions.

What forms of financial aid are available for college students?

College students have access to various forms of financial aid that can make higher education more affordable. Some common options include scholarships, grants, federal student loans, federal work-study programs, and education tax credits and deductions for families.

What are work-study programs?

Work-study programs are a form of financial aid that allows students to work part-time jobs, usually on or near their college campus, to earn money to help cover their educational expenses. The federal government and some state governments and institutions may fund these programs.

Now that you understand why college is so expensive, you can start taking action to make your college education more affordable! Don’t forget to create a free Bold.org profile today to browse and apply for hundreds of exclusive scholarships.