Shifting College Costs Burdensome to Millennials

Going to college is costing more money these days for Millennials, as a result of reduced funding over time.

America’s future middle class is in peril, with state investment in public higher education plummeting over the past two decades leaving students and their families to pick up the slack.  A just released report by public policy center Demos provides a new analysis of the Grapevine data on state funding trends for public higher education from 1990 onwards and details how a pattern of disinvestment is leading to stagnant graduation rates and skyrocketing levels of student debt.

“The Great Cost Shift: How Higher Education Cuts Undermine The Future Middle Class,” authored by John Quinterno, shows how deep cuts since the Great Recession only represent a snapshot of long-term disinvestment: From 1990 to 2010 states’ funding per full-time equivalent student dropped 26.1 percent. By investing less in higher education, states are effectively shifting costs to students and their families in the form of escalating tuition and fees.

“When we turn our back on higher education, we turn our back on the future of the middle class in America,” said Viany Orozco, Senior Policy Analyst at Demos. “State and federal legislators need to recognize that our future workforce will demand a higher education degree; a college degree is not a privilege, it is a necessity.”
The report calls for renewing America’s commitment to nurturing a strong and inclusive middle class through investments in public higher education. It underscores that we have the capacity to invest more, for despite the budget challenges of recent years, every state is wealthier than it was twenty years ago.

Some key findings in the report include:

• Public institutions have played an important role in serving the growing numbers of undergraduate students. Public institutions absorbed 65.6 percent of the undergraduate enrollment increases that have occurred since 1990.
• As state support has declined, institutions have balanced the funding equation by charging students more. Between 1990-1991 and 2009-2010, published prices for tuition and fees at public four-year universities more than doubled, rising by 116 percent, after adjusting for inflation, while the real price of two-year colleges climbed by 71 percent.
• Median household income in the United States in 2010 was just 2.1 percent higher than in 1990.

To bridge the gap between cost and financial aid, increasingly students are borrowing from federal loan programs and private sources like banks.

To learn more, check out the report.