With the second semester of the 2024-2025 school year coming soon, recent data shows that while college tuition and fees have inevitably increased, the cost of on-campus inflation is lower than usual.
Higher education costs rose 3.4% in fiscal year 2024, a decreased rate of inflation compared to the 4% increase in 2023 and 5.2% increase in 2022, data from the Commonfund Institute’s Higher Education Price Index shows.
From 1977 to 2024, college tuition rose by 1,513%, experiencing an average inflation rate of 6.1% per year, which is almost double the overall inflation rate of 3.56% during that same period.
James M. Hohman, director of Fiscal Policy at the Mackinac Center for Public Policy, told The Center Square that most of the price hikes are due to ubiquitous student loans. Because most Americans expect they will take out loans to afford higher education, colleges and universities have little incentive to lower their otherwise unaffordable prices.
“Essentially, colleges can keep raising tuition because it doesn’t matter to their ability to recruit students,” Hohman said. “And I believe the federal government is partially the culprit for this, too, because of the ability for students to not have to economize based on tuition. They can afford to go wherever they want because the federal government will ensure that they can borrow money in order to pay for the cost.”
HEPI data also reveals that while administrative salaries rose 5.1% in 2024 – the highest annual increase since 2014 – faculty saw a 3.4% increase, which is roughly in line with inflation.