After several years of holding tuition and fees relatively flat, a growing number of colleges and universities say they must raise their sticker prices amid inflation and a tight labor market. According to the The Hechinger Report, “it’s a squeeze that comes at the worst possible time for higher education,” given that many institutions are already grappling with declining enrollment and many families are still reeling from the pandemic.
Growing inflationary, staffing pressures
Before the COVID-19 pandemic, colleges’ sticker prices had been rising faster than the rate of inflation. Institutions largely paused those increases at the start of COVID-19 as the pandemic accelerated enrollment loss and made it even harder for low-income families to afford college. Colleges absorbed the impact with help from $74.8 billion in federal relief funds.
Now, several factors are pushing up tuition and fees once again. One reason is inflation. According to the Bureau of Labor Statistics, the consumer price index rose by 7.5 percent in January 2022, the highest level since the 1980s. The Guardian explains, “Supply chain issues coupled with rising demand continue to inflate the price of fuel, rent, food, and other essentials.” The cost of food (up six percent) and energy (up nearly 30 percent over last year) is affecting a number of sectors, including higher education.
Labor shortages and the need for more health and wellness resources have also increased colleges’ expenses. As a result of the great resignation and staff shortages, colleges are raising wages and benefits to attract and retain faculty and staff. In response to the rise in students diagnosed with depressive disorders and anxiety, colleges have increased counseling services. With these new expenses, colleges are “being pushed to spend more, just when they don’t have any more to spend,” Richard Garrett, chief research officer at the higher education research and consulting firm Encoura, says.
Schools announce tuition, fee increases
Given the environment, “there’s absolutely going to be an increase in tuition and fees,” Jim Hundrieser, vice president at the National Association of College and University Business Officers predicts. Several institutions have already announced changes.
The University of Virginia said it will increase tuition by 4.7 percent for the 2022-23 academic year and by 3.7 percent the following year. Virginia Tech has already raised meal plan fees to cover a pay increase for dining hall workers. Texas Christian University will raise tuition by 4.5 percent in fall 2022; Lafayette College and Loyola of Chicago will increase college costs by 4 percent next year. The University of North Carolina Wilmington, the University of North Texas System, and Washington State University plan to raise meal plan fees, housing costs, and tuition—increases ranging from 2 to 5 percent—for some or all of their students for the 2022-23 academic year.
Many of the increases still remain below the national rate of inflation, and several states have announced more funding for public colleges and universities, with the stipulation that colleges freeze tuition costs. However, experts say that state funding increases likely will not be enough to offset growing operating costs.
Meeting students’ financial needs as tuitions rise
Some college leaders are cautioning that the rise in tuition and fees could create additional hurdles for low-income families already facing higher costs for other goods and services. And while the share of students paying full tuition has decreased in recent years, families and students—especially first-generation students—are sensitive to sticker prices and steer their college applications accordingly. Informing students about available financial aid will be especially crucial as colleges’ published tuition rates climb, experts say.