Finally there’s some good news on the higher education front: The ever increasing cost of a college degree is slowing down.
For years, the question hasn’t been about whether college tuition would increase but rather by how much. While the prices for a degree are still going up annually, The Wall Street Journal reports the increases have lessened lately.
From the article:
U.S. college tuition is growing at the slowest pace in decades, following a nearly 400% rise over the past three decades that fueled middle class anxieties and a surge in student debt.
Tuition at college and graduate school—after scholarships and grants are factored in—rose 1.9% in the year through June, broadly in line with overall inflation, Labor Department figures show. By contrast from 1990 through last year, tuition grew an average 6% a year, more than double the rate of inflation. In that time, the average annual cost for a four-year private college, including living expenses, rose 161% to about $27,500, according to the College Board.
Part of the reason for the decreasing costs, The Journal reports, is a surplus of higher education institutions combined with a declining overall enrollment. A lower birthrate and aging population have “reduced the pool of traditional college-age Americans” and Congressional action may also have an impact:
Another factor: Congress last increased the maximum amount undergraduates could borrow from the government in 2008. Some economists have concluded schools raise prices along with increases in federal financial aid. A clampdown on aid, in turn, could limit the ability of schools to charge more.
Some of these trends may persist. The number of high-school graduates is projected to remain flat through 2023, according to an analysis by the Western Interstate Commission for Higher Education. White graduates, the most likely among races to attend college, are expected to decline over this period.
“The competition is bigger now than it has been, and I think we have more informed consumers,” said Sarah Kottich, chief financial officer at College of Saint Mary in Omaha, Neb.
The Journal reports the current trends that are leading to lower tuition increases are affecting private colleges and universities the most while public universities are on better financial footing:
Public four-year colleges, which teach the majority of bachelor’s candidates in the nation and tend to be cheaper than private schools, are benefiting from increases in direct state funding as tax revenues improve. That has eased schools’ need to raise prices on students. During the recession, the reverse occurred. States cut funding to plug budget gaps and colleges raised tuition to offset the cuts.
State officials have also pressured schools, through legislation and public speeches, to rein in prices, and they are admitting more international students to boost revenues.