Ace Dahyeon Choi | We need to talk about tuition

“At your age, we were able to buy an apartment,” some aunt or uncle tells you. They graduated college twenty, thirty years ago, and got a job afterwards. Perhaps they have even graduated from the same university as you yourself. However, not only has housing inflation caused the median house price to more than double over the last thirty years, but the cost of graduating from university has also doubled.

If the cost of higher education has increased so significantly, and if average earnings have not, it is more important than ever that students receive need-based financial aid. However, this hasn’t always been the case. Accessible college and university education is important for social mobility. And with these rising costs, difficulties arise for many.

According to the National Center for Education Statistics (NCES), even accounting for inflation, in constant dollars the median total cost of attending college per year has increased from $12,604 in 1990-1991 to $25,281 in 2019-2020.

In 1990 to 1991, Penn specifically had a total undergraduate cost of attendance of $17,044 dollars, which included tuition, general fees, and a boarding fee. Accounting for inflation this would amount to $37,557.91 in 2022. For the 2021 to 2022 school year, the total cost of attendance included tuition and a general fee, technology fee, room rates (board), and a separate meal plan, adding up to $78,366. In other words, the cost of attending Penn has increased by over 200% since 1990. Comparing the archives kept by Penn to present-day sticker prices, it’s also evident that the number of fee categories have increased, most noticeably the addition of the technology fee category and the splitting of boarding fees into housing and meal plans. Of course, there are some perfectly understandable reasons for diversifying fee categories — for example, technology is becoming more widespread in education, and Penn tries to offer different options that are unique to some categories. However, it could also be seen by people to be a way of inflating costs, especially after the updated requirements for second-year students to also live on campus and subscribe to a meal plan.

This means, of course, that the aunt or uncle trying to tell you to ‘pull yourself up by your bootstraps’ not only lived in an era where housing was much more affordable, but also an era where schooling was not as expensive. 

But what about the median income in America? How much have wages risen since then? You would expect that it can afford these changes, but it does not.

The average wages in America from 1990 to 2022 did increase by 21% according to the CPI, and 39% according to the PCE. But irrespective of the metric, wages did not rise at the same rate as higher education, which is roughly 100% more costly than before.

It is evident that it’s much harder to pay for college without aid today than it was thirty years ago. While America’s economic growth and demand for higher education can explain some of the disparity in the increase of tuition, it can’t account for everything.

So, why is this happening?

Many colleges and universities have a larger student body, larger staff, more offered studies, and increased recruitment efforts compared to the past. This, in part, accounts for the increased cost of attendance. Other reasons might be increased pay for high-ranked university administration, as this post on Earnest suggests. Whatever the cause, the truth remains that it is much harder today than it was thirty years ago to afford higher education.

In these times, need-based financial aid is even more important for accessible education. While the average wages for Americans have risen, there is a gap in wage increases between high-earning workers and lower-earning workers. Ivy League universities, including Penn, offer need-based financial aid for students. With the cost of attendance for all four years at Penn equalling almost four to five full years of work for an average American (without paying taxes or using any money at all), it would be virtually impossible for many students to attend without aid.

According to Robert Haveman and Timothy Smeeding, high-income students often have more opportunities to prepare for college. With “sharply rising college prices” and “growing inequality” of family income, the cost of attending college has increased far more for low-income students. Financial aid, on the other hand, has risen at a slower rate. Haveman and Smeeding suggested (among other policies) that directing financial aid support to low-income students would increase educational opportunities and therefore social mobility.

Very recently, several top universities (including Penn) were sued for allegedly colluding to limit financial aid. However, need-based aid is essential to keeping quality higher education open to eligible people of all groups — especially considering the dramatically increasing costs to attend.

Although student loans can help students afford college, they can cause many problems. Not only does debt disproportionately affect underprivileged students, it also delays major financial decisions such as marriage, children, and buying houses.

Higher education plays a crucial role in social mobility as well. Generally, not only do college graduates gain access to higher earning jobs, but they are also able to meet and learn from diverse people during their time at school. This often influences both social and economic status. If financial aid is decreased, with the quickly rising tuition and not-as-quickly rising wages, it is inevitable that middle and lower income students will face more barriers to attending college. Social mobility is a critical factor in healthy societies and economies, as well as a driving force behind increasing general standards of life. As such, how accessible college is to qualified individuals of all backgrounds will determine the society we will live in.

It is important to keep in mind the changes higher education has gone through in the past few decades, both economic and educational. Education should not and cannot be an unchangeable institution. We must be aware of these changes and support better policies for our organizations if we want a better future for everyone.

DAHYEON CHOI is a rising Engineering and Wharton junior studying computer science and economics from Seoul, South Korea. Her email is dhachoi@seas.upenn.edu.