Tuition and Fees Will Double In Less Than 20 Years

June 23rd, 2014

by Watson Scott Swail, President & CEO, Educational Policy Institute

There is always a lot of talk about college costs and future issues in higher education. I’ve written extensively about our inability to recast the higher education system due, in part, to the sheer weight of historical antecedents. That is, the system is burdened by the largess and bureaucratic nature of the system itself. Large systems are difficult to change. Making this issue more complex, the postsecondary system in the US and Canada are public/private partnerships, where taxpayers and users both contribute to pay the costs. The public contribution, naturally, occurs largely through state, provincial, and federal governments. This isn’t just about direct subsidies to institutions, but investments by expenditures to students, R&D funding to institutions, transfers from federal governments to state governments through block and other tax-sharing vehicles, and even bureaucratic supports to coordinate systems (e.g., state offices of higher education). All levels and types of higher education receive support, in some type, from taxpayers, including proprietary schools, via need-based and other grants, scholarships, and subsidized loans.

Still, the rising cost of a higher education in the United States, for example, is far outstripping aid and other supports. As I do every few years, I have taken data from the College Board to calculate historical annual increases in tuition and fee charges by institutional sector, and used these data to extrapolate prices into the future. Instead of picking a point of time, such as 25 years, I am more interested in the doubling point: that is, how many years will it take for tuition and fees to double in a particular sector.

The quickest doubling consistently is always at the four-year public university, which in our analysis will double in 17 years. This is followed by two-year institutions (23 years) and then four-year, private, not-for-profit institutions (27 years). Some people are surprised that the private institutions have the slowest growth, but they have consistently had smaller annual rates of increases than other sectors. The challenge is that there foundation of costs is so much higher that the actual cost increase is much higher than the public institutions.

Let’s put this in perspective so we can understand the ramifications of this analysis. And first, to be clear, I understand full well that we are not talking about net cost of college here, nor are we talking about room, board, and other costs, although I will bring them into the fold quickly. As well, these are projections and there are many other contributing factors we cannot possibly know about or understand. These figures could very well be wrong depending on what happens with the economy, what Congress and state governments do with their funding priorities, and even how technology impacts delivery-based costs. But is of enough interest to understand the trends and the potential of future increases in prices on college affordability. My guess is that these values are actually very conservative and the damage will likely be worse. But perhaps that’s me being “half empty” right now. Use your own judgement.

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