The Surprising Story of When Did College Get So Expensive

College tuition has skyrocketed over the past few decades, leaving many students and families wondering how it got so expensive. The answer lies in a combination of factors that have contributed to the rising costs.

In the 1970s, the average tuition at a public four-year college was around $1,500 per year, which is approximately $9,000 in today's dollars. This is a stark contrast to the average tuition of around $21,600 per year in 2020, according to the College Board.

One of the main reasons for this increase is the decline of state funding for higher education. In the 1970s, states were responsible for funding around 80% of public college costs, but by 2020, that number had dropped to around 20%. This shift has left colleges and universities to make up for the difference in tuition costs.

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Tuition inflation rates have been trending downward since 2010, but it's essential to look back at historical trends to understand how we got here.

The 1970s saw a significant increase in tuition costs, with the average public 4-year institution's tuition doubling between 1969-70 and 1979-80. This period also saw a 95.9% increase in the total cost of attendance.

From the 1970s to the 1990s, tuition costs continued to rise, with the average public 4-year institution's tuition increasing by 66.3% between 1989-90 and 1999-2000. Private 4-year institutions saw an even more significant increase, with a 74.1% rise in tuition costs during the same period.

Here's a breakdown of the average annual tuition inflation rate by decade:

This data shows that while tuition inflation rates have been trending downward since 2010, the 1970s and 1980s saw significant increases in tuition costs.

The 1930s was a challenging time for many Americans, but surprisingly, some postsecondary institutions kept costs low to account for students' reduced income during the Great Depression.

In 1930, first-year undergraduates at the University of Pennsylvania paid a relatively modest $400 to attend.

The cost of attendance at the University of Pennsylvania actually increased to $420 by 1939, a relatively small jump.

Dartmouth, on the other hand, had a significantly higher cost of attendance, with first-year students paying $1,700 in 1934, which is equivalent to a staggering $40,462 in today's dollars.

Here's a rough breakdown of the cost of attendance at Dartmouth over the past 90 years:

Dartmouth's tuition has increased at an average rate of 4.52% per year over the last 90 years, a rate that's much higher than the rate of inflation, which has been around 0.90% per year.

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The 1940s was a significant time for college education in the United States. Tuition was relatively affordable for most households, and the first federal student aid program began.

The Servicemen's Readjustment Act, also known as the GI Bill, provided federal aid for tuition, fees, and other educational expenses for veterans. This program was a game-changer, allowing veterans to receive a free year of college, $500 in tuition, and a monthly living allowance while studying.

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Under the GI Bill, post-war enrollment surged 10 times higher than what had been anticipated. This was a remarkable increase, and it's easy to see why - who wouldn't want to take advantage of free education and a stipend?

In 1947, veterans accounted for nearly half of college admissions. This was a testament to the GI Bill's effectiveness in making higher education more accessible.

The cost to attend Harvard University in 1947 was $525. To put that into perspective, one year of Harvard attendance cost the equivalent of 17.5% of the average household income ($3,000).

Here's a comparison of Harvard's tuition costs over the years:

The 1960s saw significant growth in college costs, with the average cost of tuition and fees at any 4-year college increasing at an annual rate of 5.33%. This growth was largely driven by the Higher Education Act of 1965, which aimed to make college more affordable through government financial aid.

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Tuition and fees at the average public 4-year university totaled $243 annually in the 1963-64 academic year. By 1969-70, this cost had increased to $358, a 47.3% increase over the six-year period.

The cost of attendance at public 4-year schools saw a 33.3% increase between 1963-64 and 1969-70. This growth was largely driven by increases in tuition and fees, but also included rises in room and board costs.

In contrast, the cost of attendance at private institutions grew at an annual rate of 5.94% between 1963-64 and 1969-70. This translates to an increase from $1,815 per year to $2,527.

Here's a breakdown of the growth in tuition costs at different types of institutions between 1963-64 and 1969-70:

The 1970s was a pivotal time for college tuition in the United States. Tuition at 4-year public universities increased more than 75% every decade from the 1970s through the 2000s.

The cost of tuition and fees at the average public 4-year institution doubled between 1969-70 and 1979-80, with an average annual increase of 7.5%. This is a staggering growth rate that had a significant impact on students and families.

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Between 1969-70 and 1979-80, the total cost of attendance (fees, tuition, room, and board) saw an increase of 88.0% at public 4-year schools, from $1,238 to $2,327.

The federal budget for postsecondary education amounted to $3.43 billion in 1970. However, this amount increased significantly over the decade, with a 223% growth in the federal budget and a 210% growth in total federal spending when including off-budget and nonfederal funds.

Here's a breakdown of the average annual cost of tuition at different types of institutions during the 1970s:

The growth in tuition and fees during the 1970s had a profound impact on students and families, and it's essential to understand these trends to appreciate the complexities of college affordability today.

The 1980s were a time of significant change in the cost of higher education. Public investment in higher education dropped, leading to a reliance on borrowing at unprecedented rates.

The average annual cost of tuition and fees at public 4-year institutions rose from $738 in 1979-80 to $1,780 in 1989-90, a 9.2% average annual growth rate.

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The total cost of attendance at public 4-year schools increased by 113.8% between 1979-80 and 1989-90, from $2,327 to $4,975.

Tuition at private 4-year schools grew even faster, increasing by 160.3% over the same period, from $3,225 to $8,396.

Here's a comparison of the growth in tuition at different types of institutions:

The federal budget for postsecondary education increased 62.9% throughout the decade, from $11.09 billion in 1980.

The 1990s saw a significant rise in college costs, particularly in the for-profit college sector. These institutions took advantage of federal funding programs but were often criticized for hidden expenses, poor instruction, and fraud.

In the 1989-90 academic year, tuition at the average public 4-year institution was a relatively affordable $1,780.

Tuition at public 4-year institutions grew at an average annual rate of 6.52% between 1989-90 and 1999-2000, reaching $3,349 by the latter year.

The total cost of attendance, including fees, tuition, room, and board, increased 66.3% at public 4-year schools during this period, from $4,975 to $8,274.

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At private 4-year schools, the cost of tuition grew 74.1%, from $8,396 to $14,616, during the same period.

The cost of attendance at a private 4-year institution increased from $12,284 to $20,737, an annual growth rate of 5.38%, between 1989-90 and 1999-2000.

Tuition at the average public 2-year institution increased from $756 to $1,348, an annual growth rate of 5.95%, between 1989-90 and 1999-2000.

A comparison of tuition growth rates across different types of institutions reveals the following:

The federal budget for postsecondary education increased 27.3% throughout the decade, reaching $18.1 billion in 1990.

College tuition has become a major concern for many students and their families. Tuition inflation is a significant factor in the rising cost of college.

From 2010-2011 to 2022-2023, the average annual tuition inflation rate at a public 4-year college was 2.64%, resulting in a 36.7% increase in tuition over that same period.

The trend of tuition inflation is not consistent, but it has generally been trending downward since 2010. However, public 4-year institutions have seen an increase in average annual inflation rate over the past 5 years, rising to 2.07%.

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The average annual inflation rate among all postsecondary institutions is 3.08%. This means that tuition increases at a rate of 3.08% every year on average.

Here's a breakdown of the average annual tuition inflation rate by decade:

Graduate school tuition inflation mirrors undergraduate tuition inflation, with an average annual rate of 5.92% from 1989-1990 to 2021-2022.

College costs have skyrocketed over the past century, and it's essential to understand where these costs come from. The average cost of attendance at public 4-year schools increased by 48.9% between 2009-10 and 2022-23.

Breaking down the costs, we see that private 4-year schools saw an even greater increase of 55.9% during the same period. This is a significant jump, especially considering the already high costs of attending private institutions.

The cost of attendance at nonprofit private institutions grew from $20,989 per year in 1999-2000 to $34,920 in 2009-10, with an annual growth rate of 5.2%. For-profit private institutions increased costs from $16,124 to $24,118, a 4.1% annual growth rate.

Here's a rough breakdown of the growth rates for different types of institutions:

It's worth noting that federal funding for postsecondary education has also increased significantly over the years. The budget grew from $23.0 billion in 2000 to $236.8 billion in 2021, with an average annual growth rate of 7.06% from 2010. However, federally mandated costs for postsecondary education increased at an average annual rate of 2.5% from 2010 to 2019, and then shot up to 86.4% per year from 2010 to 2022, largely due to funding for the CARES Act.

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State and local funding for public colleges has been a significant factor in college costs. Between 1988 and 2018, state and local funding per student for higher education dropped about 25%.

Public colleges rely heavily on state and local funding, which made up 55% of public two-year college revenues and 44% of public four-year college revenues in 2018-19. Economic downturns like the Great Recession in 2008 led to funding cuts, resulting in a 6% lower average education appropriations per full-time equivalent student in 2020 compared to 2008.

As a result, public colleges often pass costs on to students through tuition increases. However, there is some good news: average public higher education funding has increased for eight years in a row as of 2020, and 18 states have brought funding up to pre-2008 levels.

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Paying for college can be a daunting task for many students and families. The cost of tuition has increased significantly over the years.

Annual tuition at the average private institution is $34,923. This is a staggering figure, especially when compared to public institutions.

The average tuition at private institutions is 125.5% higher than tuition at public institutions. This means that private colleges are charging students a premium for their education.

Private nonprofit institutions charge 82.6% more in tuition than private for-profit institutions. This highlights the difference in pricing between these two types of private colleges.

In the 21st century, annual tuition at the average public institution has increased 219.4%, an annual growth rate of 9.8%. This is a significant increase, and it's essential for students and families to be aware of these rising costs.

Here's a comparison of the tuition increases at different types of institutions:

Looking at historical data, we can see that tuition at private colleges has increased significantly over the years. In the latter half of the 20th century, private college tuition increased 28.6% faster than tuition at the average public postsecondary institution.

In 1948, tuition for full-time undergraduates at U-Penn was $620, the equivalent of $8,068 in 2024 dollars. For the 2023-24 academic year, the same tuition is $66,104, representing a 719.3% increase from 1948 after adjusting for inflation.

State and local funding for colleges is a crucial aspect of their operations. Public institutions rely heavily on these funds, which made up 55% of public two-year college revenues and 44% of public four-year college revenues in 2018-19.

Economic downturns, like the Great Recession in 2008, have led to funding cuts. In 2020, average education appropriations per full-time equivalent student were still 6% lower overall than in 2008.

State and local funding per student for higher education dropped about 25% between 1988 and 2018. This significant decline has had a lasting impact on college costs.

However, there is some good news. State and local support for colleges is on the upswing, with average public higher education funding increasing for eight years in a row as of 2020.

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Many young people are voting with their feet by shunning a college education because of a perception that it may no longer be worth it. Enrollment has dropped noticeably, even as the pandemic wanes.

The pandemic has actually accelerated this trend, with more and more schools looking at ways to lower tuition or offer more aid. This is because students are increasingly questioning the value of a college education.

Making public 4-year universities free or next to free would be expensive and require new funding sources. Sen. Bernie Sanders once proposed a tax on Wall Street transactions to fund this, while Sen. Elizabeth Warren has backed a wealth tax.

The government has played a huge role in the rising cost of college, with the Reagan administration's policies contributing to the upward spiral of costs. The Parent Plus program, for example, has few restrictions on credit or on how much can be borrowed, leading to hundreds of thousands of dollars in debt for some families.

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The rising cost of college has led to a significant increase in student debt, with the average student graduating with over $31,300 in debt. This has a profound impact on the financial stability of graduates.

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The cost of attending college has increased by over 1,000% since 1978, far outpacing inflation and the cost of living. This is a staggering statistic that highlights the unsustainable nature of the current system.

The shift from a focus on undergraduate education to a focus on graduate education has also contributed to the rising cost of college. As more students pursue advanced degrees, colleges and universities have raised their prices to accommodate the increased demand.

The increasing cost of college has led to a decrease in the number of low-income students attending college, exacerbating existing inequalities in access to higher education. This is a concerning trend that has serious implications for the future of our society.

The rising cost of college has also led to a decrease in the number of students pursuing degrees in fields such as humanities and social sciences, as students opt for more "practical" fields like business and engineering. This shift in focus has significant implications for the types of graduates we produce.

College prices have skyrocketed over the past 40 years. In 1980, the annual price to attend a four-year college full-time was $10,231, including tuition, fees, room and board, and adjusted for inflation.

The price increase is staggering, with a 180% jump by 2019-20, when the total price reached $28,775. This trend has been consistent across all institution types.

Private nonprofit institutions have consistently cost more than public colleges. In 2019-20, a full-time student paid $48,965 at a private nonprofit college on average, compared to $21,035 at a public university.

However, in recent years, the trend has slowed. From 2019-20 to 2021-22, average tuition, fees, and room and board dropped 0.2% at private nonprofit four-year schools.