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Satyagraha

Cultural Psychology

College Tuition Inflation

with 25 comments

As promised, here is a graph showing the disparity between general cost-of-living inflation and inflation
associated with college tuition and fees (if the student I promised this to reads this, please let me know if the
post is clear):

Source: Bureau of Labor Statistics and the College Board.

The figure compares inflation over the last 30 years associated with (1) the general cost of living, (2) the cost of
medical care, and (3) college tuition and fees.
Inflation factors were computed to answer the question: in each year, how many dollars would be needed to
have the same buying power as $1.00 had in 1978? The calculations made use of published data on the
Consumer Price Index for all urban consumers (CPI-U), the medical costs component of the CPI, and historical
data on inflation of college tuition and fees.

As is well known, medical care costs have grown faster than the general cost of living — by 2008, nearly twice as
much. This receives a lot of public a ention and many complaints.

Yet college tuition and fees inflated at a much faster rate: nearly three times that of general inflation. Thus
while it took $3.30 in 2008 to buy the same general commodities purchasable for $1.00 in 1978, for college tuition
and fees nearly $10 in 2008 was needed to buy what $1.00 got in 1978.

This excess inflation has, incidentally, occurred across the board: for both private and public 4-year colleges, and
for public 2-year colleges.

This is why students are being forced to take out exorbitant loans.

In short:

After adjusting for inflation, college tuition and fees are roughly three times more expensive now than in
1978. Why? What has intrinsically changed about college education so that this is the case?

Excess inflation of healthcare costs is a prominent issue and receives much a ention; but excess inflation of
college costs is even greater. Why is this not a major social issue?

Shouldn’t we be making a college education easier to obtain instead of more difficult? We claim to rely on young
people to make a be er world in the future. How are they supposed to do that when they step into adulthood
already burdened with debt?

Reading and Resources

The College Board. Trends in College Pricing. Princeton, NJ: 2008.

The Education Sector. Drowning in Debt: The Emerging Student Loan Crisis. July 2009

Ronald Ehrenberg. Tuition Rising: Why College Costs So Much. Harvard University Press, 2002.

The Project on Student Debt

Paul Strei . The Great American College Tuition Rip-Off. Oxford Institute Press, 2005.

Richard K. Vedder. Going Broke by Degree: Why College Costs Too Much. American Enterprise Institute, 2004.

Penelope Wang. Is college still worth the price? Money Magazine. August 20, 2008.

Wri en by John Uebersax

July 14, 2009 at 7:49 pm


Posted in College tuition, Economics

25 Responses

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I think you need to check the math. The rate of inflation was about 300% from 1978 to 2008 but if it took $10
in 2008 to purchase something that previously cost $1, then that represents a 1000% increase or ten times as
much. I don’t understand why more people are not asking their state legislatures about this because, as the
article points out, this is creating a situation where the middle class are being squeexed out of college. The
rich can handle the increase, the poor qualify for grants but the middle class who earn just enough not to
qualify for grants find it impossibly difficult to pay for college. Somehting is grossly amiss in this picture.
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June 2, 2012 at 3:52 pm Edit

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I hope you will pardon my lack of cyber-savvy here: I came across your blog and would like to cite your
statement about college inflation as opposed to regular inflation for a paper. The name at the top right of
your blog (at least on this page) is John Uebersax, Ph.D. Would it be possible for you to tell me the most
appropriate way to cite this information? (I will use the given name if it is correct for this material; otherwise,
I will need to cite per APA standards for web content without a named author.)

Thank you so much for your help! (I am arguing for the benefit of high school programs that provide career
tracks or the opportunity to transition into a career and NOT college if that is not what the student needs.)

Thank you again,


Prudence
noguiltnofear

August 22, 2012 at 2:59 pm Edit

Reply
What this chart doesn’t show is where all the extra money we pay for medical, and tuition costs went. To the
top 1%.

h p://stateofworkingamerica.org/who-gains/#/?start=1978&end=2008

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September 15, 2012 at 7:11 am Edit

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