Soaring Student Finances: The Cost of Higher Education

Allie Ashe

Fall 2023 Intern

According to a 2015 national survey , 70 percent of college students reported feeling stressed about their finances. Tuition alone has skyrocketed—during the 2019 to 2020 school year, researchers found a 180 percent increase in cost compared to 40 years ago—but this is merely the beginning. College students have a plethora of other expenses as well, such as meal plans, groceries, boarding, rent, travel, parking, technology, textbooks, and so much more. These costs are exorbitant, and students are struggling to keep up.

A 2021 study found that financial stress even impacts one’s ability to succeed academically. Textbooks, for example, are a major expense for most students. Some courses require multiple texts, which quickly adds up, especially when one book can easily surpass 50 dollars. One student in this study noted that they either avoided classes with required texts or purchased outdated versions of the textbook, both of which impacted them academically. The student could not complete practice problems in the workbook because they could not afford to buy it. Similarly, some students are forced to prioritize working over academics. Long hours and late nights can impede a student’s ability to complete work well or turn work in on time. Financial stress is also a major distraction for students, as looming payments affect their ability to focus on schoolwork. One student noted that the thought of upcoming bills prevents them from fully absorbing what they’re learning in class.?

Aside from necessary living expenses, college is stressful, and students deserve to unwind. While many schools offer free programming, this is not always the case. Students shouldn’t have to miss out on entertainment because they cannot afford it. Students on a tight budget often opt to skip events or activities in fear of exceeding their spending limits. There are certainly ways to have fun without spending money, but realistically, college students cannot rely on this. Social comparison is also an issue, as students who experience frequent and significant financial strain often find themselves comparing their situations to others. It’s a jarring reality that their friends may be able to afford things they cannot.3

Is college worth it? On paper, yes. Theoretically, students can “earn back” all the money they spent through their income after they graduate. A study conducted by Georgetown University discovered that over an average lifetime, a bachelor’s degree is worth over two million dollars. In execution, the financial strains of college may be too overwhelming for some to continue. In 2021, fifty percent of college dropouts reported that they could not keep up with expenses. College is intended to set students up for success, but many can’t make it to the finish line because of soaring costs.

How can college students practice fiscal responsibility? Many institutions offer work-study with flexible hours, so students can still attend their classes or extracurriculars. Students can also research grants or scholarships to assist with their school-related expenses. If loans are necessary, understanding student loans and which type best suits an individual’s needs is essential. The Office of Financial Aid can assist with this, as can outside resources, such as the Federal Student Aid Information Center. These experts can assist you in finding the best option and creating a plan to repay loans. Different solutions work for different students. Ultimately, many students go to great lengths to pay for school, which has become normalized. While federal loan forgiveness programs have emerged recently, college students continue to struggle with multiple other financial burdens.

The stress certainly doesn’t end after graduation. According to a 2023 report , over half of students in the United States leave school with debt. Fifty-five percent of graduates from public four-year institutions took out student loans to pay for school. Meanwhile, fifty-seven percent of students from private four-year institutions took out loans as well. Students who wish to pursue graduate studies—or whose career paths require them to earn higher than a bachelor’s degree—are once again confronted with extravagant costs. In 2016 , thirty-two percent of employers reported that they were increasing their educational standards for job candidates. Positions that were once available to bachelor-level candidates now prefer master-level candidates instead. In hopes of securing a job (as well as a better income and benefits), many individuals opt to pursue terminal degrees. Additionally, many individuals spend years repaying debt; the same 2023 report revealed that the average student loan debt balance for individuals aged sixty-two and older is nearly $50,000. This is higher than any other age group, even young adults.

Student finances are an ever growing issue. Current and former students alike are experiencing financial strain because of excessive and relentless costs. While policymakers have recently taken initiatives to support struggling students, we can also be equipped with financial literacy strategies. For more information on student financial literacy, check out our blog post here .

Did You Know?

Did you know that as of 2023, student loan debt totals over a trillion dollars in the United States alone? This includes students from both private and public universities.

References

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Western Governors University. “The Benefits of a Master’s Degree: The New Norm?,” March 17, 2020. https://www.wgu.edu/blog/benefits-masters-degree-new-norm2003.html#close .