The Facts Behind High Tuition Rates

Recently, administration at Eastern University have decided to raise tuition for the upcoming 2014-2015 school year. While many students ponder the raise in tuition, this sort of thinking is not unique to Eastern. A recent study compiled by NPR shows that many colleges have raised their tuition due to a variety of reasons. Parents in Washington state have seen tuition costs raise 70 percent over the past 5 years. In Georgia and Arizona, costs have risen 75 and 77 percent respectively. In general, college tuition and fees have increased annually by 5.4% since 2001-2002.  The question for parents, students and those involved with paying for a college education is why tuition prices are climbing and are they justified?

The following includes some facts about why state universities are raising their prices. Since 2008, total public funding for higher education has declined by 14.6. From 2000 to 2010, funding per pupil at state schools has fallen by 21 percent. While these numbers explain state universities, private schools’ tuition increases stem from other sources.

The NAICU (National Association of Independent Colleges reported that private institutions increased prices by 3.6 percent which is the lowest rate in four decades. “During the past five years, private colleges and universities across the nation have redoubled efforts and implemented innovative initiatives to cut their operating costs, improve their efficiency, and enhance their affordability,” said NAICU President David L. Warren.  “This, coupled with generous institutional student aid policies, has resulted in a private higher education that is accessible and affordable to students and families from all backgrounds.” 

While the 3.6 percent number is lower, again, the question is still why. Economists attribute inflation as a prominent cause. A 2 percent average annual inflation rate means colleges ranging in the $20,000 range for tuition can easily increase by hundreds of dollars. In addition to inflation, economists attribute the rise of demand for college as a reason for increase. If more students want a post high school education and colleges and universities only have a limited quantity of students they can hold, then the law of demand driving up prices makes sense as a business motive.

It is clear that in the future, prices for colleges and universities will continue to rise. Going forward, students and parents must decide the best option for higher education, and which college or university they derive the most value.



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