During the last 20 years, the average tuition and fees at public universities increased by about 9% per year. Since 1963, the cost of a college degree over time has increased by 747.8% (adjusted for inflation). In 1963, the average total tuition and fees for all institutions was $4,939 (in 2022-2023 dollars) or $508 at the time. In 2023, it was $15,919 (in constant 2022-2023 dollars).
Note that these are average tuition and fees for all public and private institutions. Students must also consider room and board, textbooks and supplies, and living expenses. Financial aid can cover tuition and fees, room and board, and books but not the incidental costs.
The actual cost of college degrees differs between institutions, too. Fayetteville State University, for example, charges $2,262 per year on average. Harvard University, in contrast, charges an average of $59,076 per year.
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Why should students and their parents understand the cost of college over time? First, it’s useful in personal financial planning. Students can expect an increase in tuition and fees, among others, and plan for it. This can include applying for more financial aid and tapping into more resources.
Second, policymakers use the information to create strategies for more affordable college costs. The government works toward an educated workforce because of its crucial importance. A more educated workforce contributes to better economic growth and social development.
For these reasons, we’ll look at the cost of a college degree over time in the United States. We’ll also discuss effective ways of dealing with the rising costs of a college degree.
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The History of College Tuition
We classified the increase in college tuition over time into specific time frames. Note socioeconomic and political events influence rising college costs. This isn’t surprising as education is an integral part of our history and society.
The historical college tuition rates are from the National Center for Education Statistics. The data provided starts from the 1963-1964 academic year. There was limited information about college costs before the 1960s.
Early 20th-Century College Costs
In the early 1900s, colleges and universities were the bastions of wealthy white men. During this time, the average salary was $450 per year. Private colleges charge between $100 and $500/year, while public colleges charge under $50/year. Even then, families with modest means struggled to put their children to college.
Let’s not forget the other components of the cost of attendance. Room and board was $150-$300 per year, while books, supplies and personal expenses ranged from $120 to $250 per year.
Mid-20th Century: Post-WWII Boom
The Servicemen’s Readjustment Act of 1944 (also called the GI Bill of Rights) increased access to college education among veterans. The Higher Education Act of 1965 opened college education to women and minorities. Indeed, the post-WWII boom in college enrollment paved the way for our modern system.
The 1950s and 1960s were also good times for college students, thanks to the relatively affordable cost of attendance. The federal and state governments provided support for colleges and universities. Increased public investments in education also kept costs at a manageable level.
In the 1960s, for example, average tuition and fees increased by 26% – from $508 in 1963-1964 to $645 in 1969-1970.
Late 20th Century: The Rise of Tuition Rates
But by the 1970s until the 1990s, tuition rates started to increase more rapidly. College expenses became more burdensome for students and their parents. The increase in costs was due to decreased state funding, increased operational costs, and sustained demand for college degrees.
In constant 2022-2023 dollars, the average amounts for four-year institutions at the start of each decade (unless otherwise indicated) were:
| Period | Tuition and Fees | Dormitory | Board | Total Tuition and Fees, Dormitory, and Board | Percentage Increase from Previous Period |
| 1970-1971 | $6,139 | $3,183 | $4,139 | $13,461 | |
| 1980-1981 | $5,807 | $2,926 | $3,373 | $12,106 | -10.06% |
| 1990-1991 | $8,971 | $3,987 | $4,052 | $17,011 | 40.52% |
| 2000-2001 | $12,617 | $4,951 | $4,550 | $22,118 | 30.02% |
| 2010-2011 | $17,548 | $6,805 | $5,569 | $29,922 | 35.28% |
| 2020-2021 | $18,921 | $7,986 | $6,153 | $33,060 | 10.49% |
| 2022-2023 | $17,709 | $7,456 | $5,719 | $30,884 | -6.6% |
In general, college costs tend to increase over time.
Recent Trends in College Costs
The current education cost trends highlight the general expectation that cost increases will continue. In the 21st century, experts predict that college tuition inflation will outpace general inflation by 2%-3% per year. It may ring true to private colleges and universities, both for-profit and nonprofit.
Many state governments are still decreasing their higher education funding. Students and their families are forced to shoulder the financial burden. There’s good news, nonetheless, with state funding increasing by 3.7% beyond inflation (2023, SHEF). However, with decreasing college revenues, funding is still an issue, particularly with rising operational costs.
The domino effect started during the 2007-2009 Great Recession. States cut appropriations for public colleges and universities due to budget shortfalls. Public colleges and universities increased tuition and fees to compensate for the decreased funding. Students shifted to community colleges or delayed their college completion.
Nowadays, college enrollment has been decreasing since 2010 by about 7.4% or almost 1.5 million students. Financial concerns are oft-cited reasons, particularly caused by the COVID-19 pandemic. Note that undergraduate enrollment may be down, but graduate enrollment is on the rise.
Why Are College Costs Rising?
Many factors are at work here:
General inflation
Colleges and universities don’t exist in a bubble. As inflation takes effect, its costs of operations also increase, particularly in relation to goods and services purchased. These costs include compensation and benefits for their faculty and staff members, building construction and maintenance, and technology costs.
Consistent demand for college degrees
Despite the decreasing undergraduate enrollment, there’s still a consistent demand for college degrees. This is true among employers across diverse industries, from manufacturing to healthcare. Even with an increasing emphasis on skills-based hiring, most employers still prefer college graduates.
For this reason, colleges and universities build new facilities and offer new services. These things cost money and contribute to increasing costs.
Reduced government funding for public institutions
About 40% of the annual budgets of public colleges and universities come from federal and state funding. With reduced government funding, these institutions increase their tuition and fees to make up for the shortfall.
How Students and Families Can Manage College Costs
Fortunately, paying for college without getting into overwhelming debt is possible. While tuition inflation is beyond your control, there are still many things in your control.
Explore your financial aid options.
The first step to maximize financial aid for college is to file your Free Application for Federal Student Aid (FAFSA) form. Even if you believe that you’re not qualified, just do it. Most financial aid programs administered by the federal and state governments require it. Need-based scholarships and grants from colleges and universities also use its information.
Apply for as many scholarships and grants as possible.
College scholarships can be yours for the taking if you grab every opportunity. Don’t pass up scholarship opportunities even if their amounts aren’t in the thousands of dollars. Every penny helps in paying for your college education, such as for room, board and books.
Consider work-study programs on your campus, too. You can also take on off-campus, part-time work for your living expenses.
Consider obtaining an associate degree from a community college first.
Community colleges have more affordable tuition than four-year universities. Associate degree credits are transferable to a bachelor’s degree program. Look for community colleges with articulation/transfer agreements with four-year universities, such as Santa Monica College and UCLA.
Financial planning is a must, too, in paying for college. Create and follow a budget. Finding cost-saving ways to pay for your room and board, buying used and digital textbooks, and limiting your wants are recommended.
The Future of College Costs
As previously mentioned, the trend of increasing college costs will likely continue. But it isn’t the only trend we’re seeing in the coming years.
First, online degree programs will be more popular. Online education hit its peak during the COVID-19 pandemic before decreasing after restrictions were lifted. But we’re seeing its increasing popularity because of its affordability, accessibility, and flexibility.
Second, alternative credentialing options are also becoming more popular because of their more affordable costs and shorter time-to-completion than college degrees. But, we don’t see them replacing college education either.
Third, with many states increasing their college funding, there may be some relief. With the increasing involvement of the private sector, such as tuition assistance, the relief may be better, too.
Hopefully, effective and efficient solutions can be implemented soon. These include increased government funding, improved operational efficiency, and enhanced financial literacy.
Students and their parents must also plan for college expenses. Failure to plan means inability to succeed.
Conclusion
College tuition inflation is real and it’s a challenge to keep up with college education for this reason. Instead of complaining, however, you should take matters into your own hands. Plan for college. Explore every financial aid opportunity. Keep your eye on the rewards of a college education – it’s a long-term investment that opens excellent career opportunities.