Breaking Down the Burden

Exploring the factors driving college expenses upward

BY ERIC JOHNSON

WHEN YOUNG STUDENTS and their families enter a college’s bursar office, they ask, “Why is college so expensive?” This sentiment is echoed by parents who recall the significantly lower tuition rates during their college days. The 2023 Princeton Review College Hopes & Worries Survey revealed that nearly 70% of the respondents anticipated a college education to cost more than $75,000. The survey also highlighted that 54% of the respondents were heavily reliant on financial aid to fund their education, underscoring the importance of understanding college expenses and financial aid.

The increasing costs of a college education are noticeable to high school students as they evaluate their career options. While the list of reasons why college is so expensive is a long one, there are three primary reasons why college costs more in 2024.

The first significant factor contributing to the rising costs of college is the reduction in state funding to higher education institutions. The aftermath of the Great Recession of 2008-2009 saw many states implementing austerity measures to compensate for the loss of tax revenue due to increased unemployment. These measures led to substantial cuts in education, particularly in higher education. As states grapple with competing budget priorities, higher education funding often takes a backseat.

Second, the administrative ranks at many colleges continue to grow at astronomical rates. According to a 2023 Forbes article about administrative bloat at U.S. colleges, full-time administrators saw a 164% increase in employment at colleges and universities between 1976 and 2018. A majority of these hirings resulted from increased federal regulations that all Title IV Aid schools must comply with to avoid revocation of their federal student aid status.

Third, the higher education industry is not immune to inflation. Hiring qualified faculty members will require higher salaries to attract them away from the private sector. In addition, running a college facility is costly due to increases in the cost of energy to run campus buildings, insurance costs for athletic programs, and the acquisition of innovative technologies that can elevate a student’s education. Students can afford a modern college education experience by selecting schools with affordable tuition rates. For the 2024-25 academic year, Goldey-Beacom College’s (GBC) tuition cost for an undergraduate student is $14,790. The total tuition and residential living cost for the upcoming academic year is only $28,260. When evaluating a financial aid offer, it’s crucial to grasp the net price concept. The net price is the actual out-of-pocket cost you’ll incur after deducting all sources of gift aid. At GBC, many residential students realize a net price around $14,000 annually. Some commuter students attend with a very low out-of-pocket cost.

The net price that remains for the student can be paid off in various ways. For some students, this means using a combination of federal and private student loans. 529 College Plans are another way to pay off a student’s account balance. The terms of 529 plans differ, so it’s essential to chat with the financial institution holding the plan to understand the withdrawal of funds process.

Eric Johnson is director of financial aid at Goldey-Beacom College.