Many parents may be bracing for bad news about the price of higher education. After all, college costs have been skyrocketing for a long time, more than doubling between 2000 and 2020.1
But here’s a surprise—and for once it is a good surprise. College tuition and fee increases are at near historic lows, averaging only about 1.5% annually for the past 3 years.2
So compared to the price of almost everything else, college tuition and fees are actually a piece of good news. College is still expensive—and in some cases really expensive—but the runaway price increases of higher education costs are on hold… at least for now.
Here today, gone tomorrow?
Is this just short-term relief? The effects of the COVID-19 pandemic? Some experts believe this price stability is here to stay due to ongoing shifts in demographics and enrollment. “There was a time when colleges and universities could price with impunity when there was always sufficient demand that they could raise what they charged and be sure that people were going to find a way to pay,” said William Doyle, a professor of higher education and chair of the Department of Leadership, Policy, and Organizations at Vanderbilt University’s Peabody College of Education and Human Development. “But that time appears to be over.”3
But is it really over? The answer may depend on what happens to college enrollment rates over the next few years. If they stay at current levels, the law of supply and demand could just help keep tuition prices in check.
“I’ll have the organic quinoa salad.”
Of course, tuition is not the only cost to consider… and not all colleges are created equal. Public/state schools have done a better job putting the brake on tuition increases than private non-profit institutions.4 And while the price of textbooks has actually fallen since 2018, the price of room and board just keeps creeping up and up and up.5,6
Room and board can be a big part of overall college expenses—in public schools, it can actually cost more than tuition.7 So, it’s an important factor to keep in mind when choosing which school to attend.
One reason room and board prices keep going up is as schools compete for students, they are building nicer dorms and serving better food in more attractive dining halls. But right now schools are being hit by inflation as well, so their costs are going up for the food kids eat, the electricity to heat and cool their dorms, and most everything else.
Four things you can do about inflation and college costs.
So, with so many variables in play, what can you do to help keep higher education expenses more manageable? Here are a few ideas:
- Focus on California.
There are a lot of cost-effective options for students who go to college in California. Two-year public schools typically offer free tuition. And at California’s 4-year public colleges and universities, in-state tuition and fees are still below average versus the rest of the country. Lately, these schools have done a pretty good job limiting price increases as well (CA was ranked 11th best this year).8 In fact, for the 2022-203 academic year CSU had a 0% price increase—tuition did not go up at all.9
- Look beyond the sticker price.
The tuition and fees most often talked about are published rates—the sticker price or full retail cost. But a lot of schools are eager to attract students, so when deciding if a school is in your price range, make sure to check out what they offer in terms of aid, scholarships, and other incentives—because right now, it’s a buyer’s market.
- Teach your kids to cook.
The cost of food went up 10.4% in 2022, making it one of the consumer categories hardest hit by inflation.10 Those increased costs will soon show up in the price of meal plans. And, while meal plans are the right choice for many kids for all sorts of reasons, they can cost 70% more than you would pay to cook and eat on your own.11 Relying on take-out or delivery services can also be a real budget-breaker.Bottom line? Your child can save a lot by cooking at least some of their meals themselves.
- Make sure your savings are working hard for you.
Whenever there are broad changes in economic conditions—such as the surge in prices during 2022—it is always a good idea to make sure your savings are invested wisely. This is especially important during inflationary periods, as money left on the sidelines is going to be worth less at the end of the year.
It’s great news for many parents and students that we are getting a break with college tuition holding flat for now. Even if that break does not last, there are things you can do now to make a difference in the long term. And money-saving strategies are always a smart idea.
1 BLS College Tuition and Fees Series ID CUUR0000SEEB01 as of February 11, 2023, All City Average
3 As enrollment falls and public skepticism grows, some colleges are cutting their prices, The Hechinger Report Nov 25, 2022
4 Trends in College Pricing and Student Aid 2022, The College Board, Figure CP-4 2012-13 to 2022-23
5 BLS: TED The Economics Daily, Cost of college tuition has remained stable since 2019, August 2021
7 Calculated from Trends in College Pricing and Student Aid 2022, The College Board, Table CP-1
8 Trends in College Pricing and Student Aid 2022, The College Board, Figure CP-6