A simple chart created by the American Enterprise Institute demonstrates how incredible the cost of attending college has become.
In the past 20 years, prices have inflated by 55 percent overall. But inflation hasn’t been evenly distributed. Prices of consumer goods, like cars, phones, clothes, and televisions, have remained stagnant or have even declined, providing a boon to consumers. Other products, like food and housing, have risen in price in lockstep with inflation. Health care and childcare have surged ahead, more than doubling in price and handily outpacing inflation.
But education puts them all to shame. Since 1996, college tuition has almost tripled in price, drastically outpacing inflation and putting a substantial burden on many American households. One of the only things that can compete with tuition in terms of growth are college textbooks, which have surged in price even more. In real terms, both goods cost twice as much as they did in 1996, even after accounting for inflation.
The exact reason prices have increased so much has been hotly debated, but one critical factor at most schools is administrative bloat. While student to faculty ratios have remained relatively steady over time, the number of administrators and other non-teaching staff has exploded at schools across the country.
A bigger root cause may also be the ready availability of federally-backed student loans. Research by the Federal Reserve in 2015 found strong evidence that each increase in federal student aid is simply being gobbled up by schools in the form of increased spending and a subsequent rise in tuition.
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