Hearing your parents talk about how they paid for their college tuition with a part-time job can be frustrating. Though these stories are true, the tuition structure has completely changed over the past 30 years.
The cost of going to school has skyrocketed, putting more of a burden on you as a student, causing you to rely even more on student loans.
But according to new data from the Labor Department, college tuition hikes are finally slowing down. While higher education is still prohibitively expensive for some, the trend of sky-high increases is finally coming to an end.
What the data found about college tuition
In 1984, the total cost of attendance for private and public schools was $10,210, on average, according to the National Center for Education Statistics. As of 2015, that number skyrocketed by 366 percent to an average price of $37,424. In the past decade, college costs increased by as much as 6.7 percent per year, adding thousands to the price of getting a degree.
That growth far outpaces the rate of inflation, making it impossible for students to pay for college with just a part-time job. Since annual pay only increased by the rate of inflation and college costs exploded, paying for school became more difficult.
However, those high hikes have come to an end. In the past 12 months, tuition rose by just 1.9 percent. That’s the lowest rate since before 2007 and is consistent with today’s rate of inflation.
What this news means for colleges
The latest data shows a big shift for colleges and universities nationwide. The lower price hikes are partially due to increased competition for incoming students. Although record numbers of students went to college in the past decade, concerns over college costs and a degree’s return on investment have hurt enrollment.
Enrollment in colleges fell in 2016 by 1.4 percent, according to the Lumina Foundation, signaling a shift in how people view higher education.
As the economy improves, lucrative trades like electrical work and welding are more appealing. Those jobs allow people to make a solid income without a degree; the certifications required for those positions cost a small fraction of the price of a bachelor’s degree.
Also, although tuition rates have grown rapidly over the past few years, the amount of federal student loans individuals can take out has remained the same. Congress hasn’t updated the borrowing limit since 2008.
With fewer incoming students and federal loans available, the competition for students and dollars has ramped up. Schools are now competing for new students, which means they have to limit tuition increases.
How lower tuition hikes affect you
Although the slowing of tuition hikes sounds promising, it doesn’t help you cover the thousands of dollars you’ll spend right now on the total cost of attendance.
However, the increased competition can help if you’re starting your college search in the fall. Because federal loans are limited, many colleges are offering larger financial aid packages with scholarships or grants to attract new students. Those scholarships and other programs can dramatically reduce how much debt you need to borrow over four years.
5 ways to lower your college costs
If going to school is too expensive, even with a financial package, there are other things you can do to offset the cost of going to college.
- Go to community college first: By going to a community college for two years and then transferring to a four-year school, you can significantly cut your education expenses. Two years at a community college costs $10,153 on average. That approach is much cheaper than going right to a four-year university.
- Attend a public, in-state university: Public state schools are much cheaper than private colleges and can be a smart way to save money. However, the price can skyrocket if you’re an out-of-state student. For example, a year at Penn State would cost $18,436 if you were a Pennsylvania resident. But if you lived in Delaware and went to Penn State, you’d pay $33,664, nearly double the cost.
- Choose a local school: Going away to school might sound more glamorous, but going to a local school and living at home can save you thousands. At Penn State, living on campus costs over $13,000 on top of tuition and fees. Over four years, living in the dorms can add $52,000 to your education costs.
- Search for other scholarships: If you don’t get a scholarship from your chosen college, there are scholarships from independent organizations you can pursue. FastWeb has a searchable database of both grants and scholarships.
- Refinance your loans: Another option once you graduate is to refinance your student loans. You’ll work with a private company to take out a new loan for some or all of your old ones. The new loan will have different terms, such as a lower interest rate which means you’ll pay less in interest — and will pay off your principal faster.
Paying for college
Sure, going to school is still expensive. But increased competition and federal loan limits have caused college tuition hikes to finally slow down. If you’re prepared and know your options, you can decrease your college expenses and reduce the amount of student loans you need to borrow.
For more ideas on saving money on school, here’s how to reduce your college expenses.
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