Some colleges cost $95,000 per year — and the price is rising. Here's why

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It can cost about $95,000 per year to attend some universities – and they’re only getting more expensive. But it wasn’t always this way.

WHAT’S HAPPENING:

• Average tuition at private US colleges grew by about 4% last year to just under $40,000 per year, according to data collected by US News & World Report. For a public in-state school, that cost reached $10,500 – an annual increase of 0.8% for in-state students and about 1% for out-of-state.
• The price tag increases monumentally at highly rated or selective schools. Harvard University, for example, charges $57,246 per year for tuition and fees. But add in housing, food, books and other expenses, and Harvard says you should expect to pay about $95,000 each year!
• After adjusting for currency inflation, college tuition has increased 748% since 1963, the Education Data Initiative found.
• Between 1980 and 2020, the average price of tuition, fees, room and board for an undergraduate degree increased by 169%, according to the Georgetown University Center on Education and the Workforce. That far outpaces wage increases, which only grew by 19% for recent graduates over the same 40-year period.

WHY:

• Unlike other industries that have been able to offset labor cost by using technology, colleges still largely rely on skilled labor from professors with expensive degrees to teach students. (There aren’t too many robots teaching college classes!)
• State subsidies are falling: Between 2020 and 2021, state funding for higher education declined in 37 states by an average of 6%, a recent analysis by the National Education Association shows. “This means colleges and universities must rely on students to pay the cost of college — and those students are borrowing to do it,” the report says.
• Income inequality plays a role: In 2021, the top 10% of Americans held nearly 70% of US wealth. That means a top-ranked university can charge almost whatever it wants and will still find wealthy families willing and able to pay.?

BIG PICTURE:

• A 2020 report from Sallie Mae and Ipsos found that less than half of American families with a child in high school had saved any money for college. The average savings was a total of about $26,000.??
• Despite the sticker shock of college costs, there is slightly better news: College Board data shows the net price of attending college – the amount that students are actually shelling out after any grant aid is deducted – has been decreasing, when adjusted for inflation. The net price paid for private colleges has dropped by 11% over the past five years to about $33,000 per year. For public colleges, it’s just over $19,000 a year, a 13% drop over the same period.
• There is about $1.8 trillion in student loan debt in this country. Last month, the Supreme Court struck down President Biden’s student loan forgiveness program, blocking millions of borrowers from receiving up to $20,000 in federal student debt relief. The Biden administration said Friday that more than 800,000 borrowers will still have a total of $39 billion worth of debt wiped away in the coming weeks under a separate effort “fixing” administrative errors.

Are you currently saving to send a child to college? Do you have outstanding student loans that you're struggling to pay? Is college worth the cost? Share your thoughts in the comments.

Here are some other stories we're following today:

A train derailment outside Philadelphia led to the temporary evacuation of more than a dozen homes, train's owner CSX says. Early reports say one of the derailed cars was carrying hazardous materials, but there's no indication those materials spilled. No injuries were reported.

Russia says it is abandoning a deal that has allowed Ukraine to safely transport millions of tons of grain and other crops across the Black Sea during Russia's invasion. Wheat and corn prices have already shot up following the announcement, and international observers, including the White House, say abandoning the deal will worsen hunger, particularly in some of the world's poorest countries. Ukrainian President Volodomyr Zelensky says “everything” must be done to preserve the deal, and suggests Ukraine will continue exporting grain, with or without one.

The Northeast is being blasted by a one-two punch of flooding from heavy rain and poor air quality due to Canadian wildfires. Air quality alerts stretch from Montana to Vermont and are expected to be in place through at least Monday night. The waterlogged Northeast is getting a break from rain today, but storms are expected to return as severe weather whips up from the Plains through the Ohio Valley Tuesday. Hundreds of Canada's wildfires are burning “out of control,” according to Canadian fire officials. Millions of acres have been scorched, and the fires have shattered numerous all-time burning records.?

Excessive heat continues to boil the US, shattering records across the country. More than 35 daily records were broken Sunday and 100 million Americans are under heat alerts again today from California to Florida. Death Valley hit 128° and Las Vegas climbed to 116°, while Phoenix is set to hit 110° for the 18th consecutive day today.?

New data shows that seniors in the eastern U.S. are more likely to have Alzheimer's disease. Rates are highest in Miami-Dade County in Florida, as well as Baltimore, Maryland, and the Bronx, New York – where one in six seniors have the disease. More than six million Americans are estimated to have Alzheimer's, and there's only one drug currently on the market. Leqembi gained full approval earlier this month, but another, Eli Lilly's donanemab, may be approved by the end of the year as well.?

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