Between 1991 and 2022, the average published tuition and fees increased from the following amounts, after adjusting for inflation, according to the College Board’s Trends in College Pricing and Student Aid in 2021:
• $2,310 to $3,800 at public two-year schools
• $4,160 to $10,740 at public four-year schools
• $19,360 to $38,070 at private nonprofit four-year institutions
This piece will cover the average cost of college tuition and fees in 2021-2022, the increase in college tuition costs, the reasons for the rise of average college tuition, and college tuition options you may want to consider for yourself.
Average Cost of College in 2021/2022
In 2021-2022, the average published price for tuition and fees for full-time undergraduate students were as follows, according to the College Board’s Trends in College Pricing and Student Aid:
• $10,740 for public four-year in-state institutions, $170 higher than in 2020-2021
• $27,560 for public four-year out-of-state institutions, $410 higher than in 2020-2021
• $3,800 for public two-year in-district institutions (including average community college tuition), $50 higher than in 2020-2021
• $38,070 for private nonprofit four-year institutions, $800 higher than in 2020-2021
Increase in College Tuition Cost Over the Last 10 Years
Generally speaking, tuition has increased in the past decade. According to data from The College Board, the average published tuition price at a four-year nonprofit university during the 2011-2012 school year was $28,500 , while in 2021-2022 that number jumped to $38,070 .
However, tuition increases have remained at historically low rates for both the 2020-2021 and 2021-2022 school years. This can likely be attributed to decreased enrollment and tuition freezes as a result of the Covid-19 pandemic.
Reasons for the Rise of Average College Tuition
What are the reasons for the rise of the average college tuition? There are many reasons, including the following.
Less State Funding
After the 2008 recession, state and local funding for public higher education was cut dramatically. While there have been incremental increases in the amount of funding these institutions receive in the past 10 years, in most states funding for these institutions has not been restored to previous levels.
Now, there is concern that the Covid-19 pandemic may cause additional cuts in the future.
As many colleges increase their offerings, they must hire more faculty, make accommodations to house more students in residence halls, and implement capital and technological improvements. These costs may require students to pay more.
Non-instructional expenditures may include recreation centers, computer systems, housing, and food — all of this plays a role in tuition rate increases.
Recommended: How to Pay for College
Marketplace Lacks Transparency or Competition
The higher education marketplace lacks competitiveness and transparency, according to a report by the Manhattan Institute , which contributes to an increase in costs:
• Families may not know discounts right away: Students often do not know how much it will cost them to attend college because they only see the sticker price until after they’ve applied and been accepted, when the financial aid award shows the discounts and grant aid available. Transparency allows us to comparison-shop and colleges and universities can compete with one another for students’ business.
• A small number of colleges in an area: When small numbers of colleges exist in an area, costs often increase because no competitiveness occurs, particularly with students who commute to campuses.
• Perception of the financial value of education: As long as students believe improved earnings opportunities and the demand curve goes up, prospective students’ expectations determine how much they will pay for school.
• Regulations affect the marketplace: New business models haven’t appeared that offer higher education at a lower cost. Regulations due to federal intervention control financial aid dollars and accreditation requirements limit new entrants.
Personnel Costs Increase
The Higher Education Price Index measures the price change of the amount of money that institutions must spend to keep things going, including salaries for service and clerical individuals, administrators, professors, janitors, and even landscape professionals.
For example, in 2021, faculty salaries increased by 1%, as compared with 2.7% in 2020. Clerical costs increased 2.8%, and fringe benefits rose 4.1%.
Lack of Regulation or Caps on Tuition
No central mechanism controls college costs in the United States at the federal level. An unregulated fee structure means that colleges and universities can charge as much as they want in tuition and fees. Other countries, such as the United Kingdom, cap tuition.
In 2009, Missouri enacted one of the nation’s most stringent caps on tuition by limiting in-state tuition and required fee increases to align with the Consumer Price Index. Institutions would face fines if they exceeded that cap. However, Missouri’s governor lifted the price cap, and colleges can begin increasing without limits in July 2022.
College Financing Options
Numerous college financing options exist for students. Students can tap into various options to pay for costs. Undergraduate students received an average of $14,800 of financial aid 2020-2021, according to the College Board’s Trends in College Pricing and Student Aid, which includes the following:
• $10,050 in grants
• $3,780 in federal loans
• $880 in education tax credits
• $90 in federal work-study (jobs for college students)
Students may rely on scholarships, grants, work-study, and student loans, in addition to personal savings to pay for their education.
Scholarships refer to money received from colleges or another organization that students. Students don’t have to pay back scholarships. A total of 58% of students receive scholarships. Students receive an average award of $7,923 each, according to the Education Data Initiative .
Recommended: Private Students Loans vs Federal Student Loans
Students can take advantage of federal or private loans. Federal loans are provided by the U.S. Department of Education. To apply for a federal student loan, students need to fill out the Free Application for Federal Student Aid (FAFSA®) each year.
Private loans are provided by banks, credit unions, and other financial institutions. These are separate from any sort of federal aid, and as a result, lack the protections afforded to federal student loans — like income-driven repayment options or the ability to apply for Public Service Loan Forgiveness. For this reason, private student loans are generally considered by students only after they have reviewed and exhausted all other options for financing.
Students and parents borrowed $95.9 billion in 2020-2021, which decreased from $135.1 billion (in 2020 dollars) in 2010-2011.
Students can tap into federal or state grants or institutional grants. Grants can also come from employers or private sources. Institutional grant aid for undergraduate students increased by 62% between 2010-2011 and 2020-2021 ($22.0 billion in 2020 dollars).
Students can get a work-study award, which is money they must earn when they attend college. They must file the FAFSA in order to qualify for work-study and must work a job on campus to receive the money.
Families report paying $26,373 for college in 2020-2021, a 12% decrease from 2019–2020. It’s not uncommon for students to get help from their parents — nearly half of college costs are covered by parent income and savings, according to Sallie Mae’s annual How America Pays for College 2021 report. Strategies for paying for college for parents include things like setting up an account designed to help them save for college or other educational expenses.
As students and their parents consider their college options, they may consider focusing on programs that offer affordable tuition, or where they received a strong financial aid package. Some schools may even offer free college tuition for some students. Other students may opt to enroll in their school’s tuition payment plan, so they can spread tuition payments over a period of time.
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The average college tuition continues to increase. In 1991, the college tuition at a private four-year institution was just $19,360 and in 2022 it was $38,070. There are a number of reasons for increasing tuition rates, including factors like a dramatic decrease in state funding, lack of regulation, and an increase in operating costs at colleges and universities.
Many students rely on financial aid to pay for college. In the case that financial aid, including federal student loans, isn’t enough — private student loans may be an option to consider. If you think a private student loan is a fit, consider SoFi.
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