A college education is now the second-largest expense an individual is likely to make in a lifetime — right after purchasing a home.
It wasn't always that way. Over the last decade, deep cuts in state funding for higher education have contributed to significant tuition increases and pushed more of the costs of college onto students, according to a new analysis by the Center on Budget and Policy Priorities, a nonpartisan research group based in Washington, D.C.
When that funding goes down it puts pressure on schools with limited options — they can cut campus budgets, admit more students who need less aid or raise tuition, said Michael Mitchell, lead author of the report and the senior director of equity and inclusion at CBPP.
Tuition has historically risen about 3% a year, according to the College Board. During the Great Recession, declining public funds caused tuition to skyrocket. At private four-year schools, average tuition and fees rose 26% over the last decade. Tuition plus fees at four-year public schools, which were harder hit, jumped 35% over the same period.
In some states, such as Louisiana and Arizona, tuition has more than doubled.
As of 2018, overall state funding for public two- and four-year colleges was more than $6.6 billion below what it was in 2008 just before the recession fully took hold, after adjusting for inflation, the CBPP analysis found.
Today, tuition accounts for about half of college revenue, while state and local governments provide the other half. But roughly three decades ago, the split was much different, with tuition providing just about a quarter of revenue and state and local governments picking up the rest.
Meanwhile, the cost of attending a four-year public college or university has grown significantly faster than income over the same time period.
Because so few families can shoulder the burden, they have increasingly turned to federal and private aid to help foot the bills.
More than 8 in 10 families tap scholarships and grants — money that does not have to be repaid — to help cover the cost.
Among the almost 70% of students who borrow for school, the typical senior now graduates with nearly $30,000 in debt.
Although getting a college degree becomes increasingly important for those aiming to get ahead in today's economy, price has become a bigger consideration among students and parents.
Now, financial concerns govern decision-making for nearly 8 in 10 families, Sallie Mae found, outweighing even academics when choosing a school.
"This impact is especially true for low-income students," Mitchell said.
Rising tuition leaves many students and their families with either insurmountable student loan debt or unable to afford college altogether, he added.