College in America just got more expensive for millions of students. Here’s the full story.
The Escalating Cost of College
America’s colleges are close to hitting the $100,000 per year mark, as multiple institutes have confirmed that they will start charging upwards of $95,000 p/y from this fall.
America’s College Price Surge
While some law schools crossed that mark in 2019, experts were predicting it would take over ten years for other colleges to catch up. Now, however, it seems as though that figure could be hit within the next year or so.
Rapid Rise in College Costs
Multiple private colleges, from prestigious to mid-tier, have announced for the first time ever that they’ll be charging over $90,000 per year – a figure that covers tuition, housing, food, books, and other expenses.
Factors Driving the Spike
Experts say these new fees are due to a sharp rise in inflationary pressures and escalating operating costs. Soon, it could be normal to see colleges charging $400,000 for a college education.
Media Storm Over Six-Figure College Costs
A six-figure sum for a college education could cause a media storm, according to Bryan Alexander, a senior scholar at Georgetown University.
The Psychological Impact
“I think the psychological symbolism of going over six figures is big, and I think it’s going to be a media storm when that happens because all kinds of people are going to get freaked out,” Alexander said.
He added, “Conservatives who hate higher education will go nuts, but I think some progressives who think of higher ed as a bastion of wealth and privilege will also have negative reactions.
Concerns Over Rising Costs
Over 2 million students are predicted to graduate this year, and a number of them will move on to college.
Experts Sound Alarm
However, with rising prices across the board and a ballooning student debt crisis, experts are worried that the sky-high costs will turn many off the idea of further education.
The Sticker Price vs. Reality
Colleges have been quick to point out that the new “sticker price” of college – the yearly cost of a college education – is very rarely what students actually pay.
Addressing Affordability
Wealthier colleges, in efforts to make further education more affordable for students from lower-income backgrounds, have offered lower tuition prices for many students.
Big Discounts From Wealthy Colleges
Some colleges offer a 90% rate discount on the sticker price, and it can often be cheaper than a state college.
The Illusion of Sticker Price
As professor of economics at Wellesley College Phillip Levine explains, “Ninety thousand dollars clearly is a lot of money, and it catches people’s attention, for sure. But for most people, that is not how much they’re going to pay. The existence of a very generous financial aid system lowers that cost substantially.”
Challenges in the Aid System
However, financial aid relies on a system that works, which critics argue is lacking in America.
FAFSA Overhaul
The rollout of the Department of Education’s overhaul of the Free Application for Federal Student Aid (FAFSA) has been plagued by major issues.
FAFSA determines students’ eligibility for grants and is used by colleges to determine how much aid students can receive.
Glitches and Errors in Student Aid Determination
However, the overhaul has been mired in glitches and errors – most recently a calculation error, which means that more than 200,000 students could be left waiting to find out if they’re eligible for financial aid.
Identity Verification Woes
Critics have also raised concerns about the new stricter identity verification requirements, which are causing undocumented parents to not apply for aid for their children – despite their children being citizens entitled to financial help.
Potential Consequences
One financial aid expert warned that if the decline in aid applications continues, it could lead to decreased enrollments and even the closure of some colleges.
The Impact of Sticker Price Shock
Even with all these measures introduced to make the costs of schooling more accessible to those from lower-income backgrounds, experts worry that the new sticker price will cause many people to reject the idea of applying to these colleges.
Institutions Crossing the $90,000 Threshold
Apart from Wellesley College, other institutions with sticker prices exceeding $90,000 this year include the University of Southern California ($95,000), Harvey Mudd College ($93,000), the University of Pennsylvania ($92,000), Brown University ($92,000), Dartmouth College ($91,000), and Boston University ($90,000).
Comparative Tuition Costs
Despite these rising fees, a recent study by The College Board looked at tuition costs for the 2023–24 school year and found that, on average, private nonprofit four-year colleges charge around $41,540, out-of-state students at public universities paid about $29,150, and in-state students at public universities had the lowest tuition at around $11,260.
The post America’s College Cost Crisis – Colleges Now Charging Over $90,000 Per Year first appeared on Wealthy Living.
Featured Image Credit: Pexels / Ivan Samkov.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
