States Struggle to Keep Higher Education Affordable
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Public funding for higher education has dropped off over the past several years but tuition continues to skyrocket, especially at public universities. The fiscal crunch has forced policymakers to make tough choices, and maintaining funding for higher education in many cases has been overshadowed by the short-term need to balance budgets since the Great Recession began. That’s a recipe for higher student debt and fewer options for underprivileged students.
For borrowers under age 30, student loan debt has more than doubled since 2005 to a record $20,835, according to the Federal Reserve Bank of New York. Increasing student debt is driven largely by big jumps in the cost of post-secondary education, which has more than doubled over the last three decades. For public four-year schools, costs have increased 268 percent since 1980 based on data from the College Board.
But the cost of a college degree – and thus student debt – isn’t escalating for no reason: students are in large part now shouldering higher education cost increases alone, something that used to be shared by students and government together. The Federal Reserve reports that state and local spending per college student reached a 25-year low this year, when adjusted for inflation.
Check out this chart from the Delta Cost Project that graphically explains this cost shift.
This shows that from 2003 to 2008, the amount (in inflation adjusted dollars) that government contributed to the cost of education actually went down by about $100, but the amount students contributed went up by about $1,500. That means that students had to shoulder more than 100% of all price increases over that period. It also shows that overall education costs were relatively stable and that a lack of government funding to keep up is primarily responsible for the big jumps in tuition.
State-by-State: Tuition Increases
On a state by state basis, average in-state undergraduate tuition rates at public 4-year institutions of higher education grew the most in Arkansas from the 2004-2005 school year to the 2009-2010 school year, jumping 61.1 percent (using inflation-adjusted data) over that period. Hawaii comes in second, increasing by 39.1 percent followed by Kentucky (35.6 percent) and Illinois (35.4 percent). Tuition in Ohio grew the least at 0.6 percent, followed by Maryland (4.2 percent) and Idaho (7.6 percent).
Average in-state undergraduate tuition* growth rates at public 4-year institutions of higher education from 2004/2005 to 2009/2010 using inflation-adjusted data
Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS). Inflation-adjusted calculations by author using the U.S. Department of Labor, Bureau of Labor Statistics CPI Inflation Calculator
*Tuition includes in-state tuition and fees for one academic year