College Tuition Has Exploded to 4.6x the Inflation Rate In the Past 50 Years

While I am not a proponent of student loan amnesty as I believe it is a misguided solution to a complex problem, I nevertheless believe that college in the US has become an over-bearing financial albatross hanging around the necks of the people it’s supposed to be helping: the students.

For students at private colleges and universities, the annual cost has skyrocketed to over $50,000. However, 50 years ago in 1971, annual tuition and fees totaled just under $3000 per year. $1 in 1971 buys $7.31 in goods and services today, an increase of 631%. Yet private college tuition and fees running at the overall rate of inflation, for example, would be $3000 x 6.31 = $18,930 per year.

Indeed, relatively speaking with regards to inflation, the average cost of going to college has increased by over 4.6x the inflation rate over the past half-century.

However, we would hope as a citizenry that wages were going up alongside inflation or even higher, but that simply isn’t the case. College has become a big business when compared with wages; in fact, data illustrates that for most workers, real wages haven’t climbed much since 1970.

In addition to self-funding (you should probably work part-time while in college as I recommend it whole-heartedly for most students), support from family, scholarships, and grants, many students must borrow money to cover the cost of higher education. Well, loans are also getting more expensive. In fact, the interest rate on federal student loans taken out for the 2022–23 academic year rose to 4.99%, up from 3.73% last year and 2.75% in 2020–21.

Plainly, we must remember that we aren’t owed anything in life and that we must play the cards on the table. Each generation has a new deck of cards that is constantly changing and being re-shuffled so we must be vigilant based on new information. This critical thinking ability is what we all learned in school growing up and it’s an ability that is paramount to keep in mind as we move through life’s vicissitudes and opportunities.

The great thing about being an adult is that we get to make our own decisions. Hence, embrace this responsibility and be thorough and vigilant when looking at your goals for your future. Just because they’re selling something out there doesn’t mean you have to buy it as-is or at these prices or without major concessions and work-arounds.

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