Why Has College Tuition Increased So Much Since the 1980s?
Everyone always seems to talk about the ever-rising cost of college; the ever-increasing student loan debt young Americans take on; and whether or not these massive costs for education actually pay off in the real world once students graduate. What’s also worrying is that, despite the increase in college costs, the benefits of a bachelor’s degree, for example, have declined in the market value, what Robert J. Gordon calls the “college wage premium” in his book The Rise and Fall of American Growth.
But when did this steady, increasing march of college tuition and fees begin? Millennials often complain of the incredible cost of college and their debt load, while Baby Boomers brush it off, saying, “I worked a job as an undergrad and still completed all my school work.” However, comparing the cost of college nowadays to the cost in the years when Baby Boomers attended is simply not an apples-to-apples comparison. When you adjust the cost of college back in the 1970s to 2019 dollars, the increase over the years is staggering.
How Much Has College Tuition Increased Over the Years?
If you look at the data in the study by BrokeScholar, you’ll notice a 220% increase in the cost of tuition and fees at four-year private nonprofit schools from 1971–72 to 2019–20 — and that’s adjusted to 50 years of inflation: Tuition and fees were $11,540 per year in 2019 dollars in the academic year 1971–72, and rising to $36,880 for the academic year 2019–20. What’s more, over the equivalent time frame, average tuition and fees at four-year public schools rose by 285%, nearly quadrupling over time, from 2019-equivalent of $2,710 a year in 1971–72 to $10,440 in 2019–20.
College Tuition and Fees Since the 1980s
There is something, however, very interesting when you look more closely into the individual years between 1971–72 and 2019–20. The rise in tuition and fees isn’t a continuous rise from the early 1970s to now. In fact, throughout the 1970s, college tuition and fees fluctuated up and down in a very stable fashion. The 1980s, however, mark an important turning point.
In the academic year 1980–81, the average tuition and fees at a four-year nonprofit private school was $11,230, actually lower than the start of the dataset in 1971–72. But from 1980–81 onward, tuition costs and fees began their inexorable, continual rise year after year. Check it out for private nonprofit four-year colleges and universities:
· 1980–81 tuition and fees in 2019 dollars: $11,230
· 1981–82 tuition and fees in 2019 dollars: $11,510
· 1982–83 tuition and fees in 2019 dollars: $12,210
· 1983–84 tuition and fees in 2019 dollars: $13,070
· 1984–85 tuition and fees in 2019 dollars: $13,700
· 1985–86 tuition and fees in 2019 dollars: $14,570
· 1986–87 tuition and fees in 2019 dollars: $15,610
· 1987–88 tuition and fees in 2019 dollars: $15,890
· 1988–89 tuition and fees in 2019 dollars: $17,320
· 1989–90 tuition and fees in 2019 dollars: $17,860
Over the course of the decade, the average tuition and fees at private four-year schools increased by more than $6,000 per year. In fact, the 1980s decade experienced some of the biggest year-over-year increases in tuition compared to any other decade. The biggest jump was from 1987–88 to 1988–89, in which tuition and fees increased by 9% in one year, equal to a nearly $1,500 increase.
Check out this data visualization that shows the seemingly incessant rise in college tuition costs.
What Changed in the 1980s in Terms of College Tuition Cots?
Essentially, the 1980s brought a sea change in how colleges recruited new students. To understand such a dramatic change, it’s important to know the context of the late-1970s, early-1980s. The mid-1970s experienced the worst economic recession since the Great Depression, a 16-month long contraction from 1973 to 1975. The 1970s were also the decade of the infamous OPEC oil embargoes: the first from 1973–1974, largely in response to American support for the 1973 Arab-Israeli War (also called the Yom Kippur War); and the second oil shock came in 1978–1979 in response to the Iranian Revolution that overthrew the shah of Iran — one of America’s principal allies in the Middle East — resulting in gas shortages, rationing and lines of cars at gas stations across the U.S. Add to this a double-dip recession in the early 1980s, including another 16-month devastating recession, and America’s economy was in serious troubled waters.
All this created a new era in the American economy as well as in American higher education. As the U.S. entered a period of “stagflation” — inflation coupled with sluggish or stagnant growth — the economy underwent dramatic shifts, and along with it, the practices of colleges and universities. A study from 1990 details some of the key reasons for the increase in college costs since the early 1980s: There was a decline in the pool of college-age students at the time, resulting in new strategies implemented by colleges and schools to get students. One thing they specifically did NOT do was lower prices in order to attract students. Instead, they initiated a strategy of competing for students by offering more financial aid and better facilities and services. This ramping-up in terms of quality led to costlier tuitions to cover the expenses of increased quality. The 1980s were markedly different than the 1960s and 1970s, when the available population of college-age people was larger, with schools spreading out the costs across a larger number of students.
From those beginnings, the colleges and universities set off the trajectory of increasing tuition and fees that continues to this day. Now, with the massive impact of the coronavirus (COVID-19) on higher education, the effect on tuitions is, unfortunately, likely to increase them.
