Those Marxist professors at American colleges should take note that the law of "supply and demand" is real. Fewer students enrolling at universities has resulted in schools slashing tuition costs by as much as 4% from a decade earlier, according to the nonprofit College Board.
The real savings for students is in the amount they pay out of pocket. That amount is down 40% from a decade ago, from $4,140 to $2,480 annually.
The bottom line is that there is a lot less borrowing. Less than 50% of students are graduating with some debt, down from 59% a decade ago. The average loan balance has fallen by 17% to $27,100.
Private colleges are a different story, but their tuition costs are rising more slowly. Those costs have increased by 4%, according to the College Board. That's a huge change from the previous 20 years that saw private school tuition increase by 68%.
Attendance at junior colleges, technical schools, and for-profit colleges is booming as Americans are seeing the value of a four-year college degree as less and less valuable than in the past.
It wasn't just fewer students that aided the fall in tuition. The massive infusion of COVID funding helped keep costs down as well.
As states and the federal government responded to the pandemic, Ma said, they increased higher education funding, allowing colleges to reduce the cost of attendance. Some of that money has since expired, however, including an infusion of federal pandemic aid that was mostly used up by the end of 2022.
Cost was a major consideration in Kai Mattinson’s decision to attend Northern Arizona University. It would have cost her about $39,000 annually to attend the public university but discounts and scholarships bring that down to between $15,000 and $20,000 for the 22-year-old senior from Nevada.
Mark Becker, the president of the Association of Public and Land-grant Universities, said, "Institutional efforts to control costs, combined with many states’ efforts to increase investments in public universities and federal investment in the Pell Grant, have increased college affordability and enabled significant progress on tackling student debt."
Costs for attending junior colleges have fallen by 9%, says the College Board. The cost for technical schools has risen slower than tuition for four-year schools. Meanwhile, the cost of tuition at for-profit schools has risen out of sight. Between 2010 and 2023, for-profit schools have raised their tuition by an average of 15.9%
The easy availability of federal loans has contributed to the rise in costs as for-profit schools seek to maximize the debt load for their students and gain as much leverage with lenders as possible.
The merry-go-round of increasing financial aid to bring in more students so that schools can justify raising tuition costs continues.
Some private colleges have been expanding their financial aid, including the Massachusetts Institute of Technology, which in November announced undergraduates with a family income below $200,000 would no longer need to pay any tuition at all starting in the fall.
Other private colleges are discounting tuition as a marketing move in an increasingly difficult environment. They face a dwindling pool of young adults, and students who are more wary of signing up for giant loans. Recruiting students is crucial for staying afloat as operational costs rise. After temporary relief thanks to federal money during the pandemic, many colleges have cut programs to try to keep costs under control.
As high school students continue to realize that they have other options for continuing education than shelling out $100,000 a year for an indifferent education experience, tuition costs will continue to fall.
