Why Did College Become So Expensive? - Nancy McKenna ––
Assign a 'primary' menu

Why Did College Become So Expensive?

You’ve likely heard the saying that 30 years ago, paying for college was like buying a car, but today, it’s like buying a house. That’s not just a soundbite. If you adjust prices to reflect inflation, students paid an average of $3,190 in tuition to attend a four-year institution for the 1987-88 school year. Fast forward 30 years to the 2017-18 school year, when students paid an average of $9,970.

You know that college is more expensive, but why? What makes college cost so much more today than it did just a few decades ago?

There isn’t a single answer to the question. Instead, the rising cost of tuition is based on various factors.

Common Theories

Let’s look at the common theories that people have put forth. First, of course, you’ve likely heard people attribute it to basic inflation. Inflation definitely impacts the cost of college, but as you can see from the example above, college prices have gone up dramatically even when adjusted for inflation. This theory is incorrect. Inflation is not responsible for the dramatic increase in tuition.

The next theory has to do with accessibility. Politicians want to make college more accessible for everyone, and that’s created two issues. First, in order to make college more accessible, the government had to make student loans easier to get. Now, just about anyone can get a student loan, regardless of income or credit score.

That brings us to the next issue. Because so many people are going to school, there is a supply and demand issue. Colleges were initially unable to accommodate all those people coming in with student loans, so they had to hire more staff. More staff means more overhead, and more overhead means higher tuition costs.

That’s a reasonable theory, and it’s partially why the country is in the middle of a student loan crisis.

The biggest reason that college is so expensive, though, has to do with the amenities. The colleges of today are not the colleges of yesteryear. Now, people expect more and more with their college experience, and that’s driving the prices up.

Luxurious Campus Syndrome

College students today suffer from something called “luxurious campus syndrome.” They expect their campuses to have the same amenities you’d find at a 5-star resort. They are technically there to get an education, but, they want the 5-star treatment at every turn, and that costs money.

Let’s look at all the factors that contribute to this dangerous syndrome.

College Dorms – All the Comforts of Home at a Price You Can’t Afford

Do you remember when you were in college? The dorms were nothing to write home about. They were cramped, the lighting was bad, and the bathrooms were disgusting. Yet, you dealt with it, because that’s what was expected at college. You weren’t there to enjoy a vacation. You were there to learn.

Well, that has changed quite a bit. Now, students get all the comforts of home when they’re away at the dorm, and it costs money.

Take Ivy House and Windsor Hall at the University of Florida in Gainesville, for instance. Dubbed “luxury dorms,” these are not the dorms of the old days. The female-only Ivy House has private jetted Jacuzzis, a sun deck, and a gourmet kitchen. Oh, and then there’s the opulent living room that has a big-screen TV and a fireplace. With all those amenities, how in the world can kids have the time to study?

The Windsor House is a coed dorm complete with luxury bathrooms that are even larger than the ones in the Ivy House. These dorms also have kitchenettes in them. Apparently, the days of microwaving ramen in the dorm rooms are over. Now, kids can cook a full meal in between studying for classes.

That’s just one example. The University of Chicago’s Max Palevsky Residential Commons consists of eight “houses,” and each one has its own personality. The dorm has its own courtyard, dining hall, and a basement for everyone to share. It even has music practice rooms.

Here’s the best one. The University of Texas at Austin is home to the Callaway House. This dorm offers an absurd number of amenities. Can you imagine having a rooftop pool and hot tub at your dorm? How about a game room and a theater room? Then, of course, the staff is on call 24/7 just in case anything comes up.

As you can see, these are no longer dorms. They are luxury resorts, and parents and their children are paying the price.

Campus Gyms – A “Free Amenity” Is More Expensive Than Ever

Next, colleges are going bigger and better with their gyms. Fitness centers are nothing new to college life. Most colleges have some sort of place for students to work out, but in the past, these gyms were anything but extraordinary. You would find some free weights, maybe a few machines, and if you were lucky, your gym had a track. That was basically the extent of it.

gym with climbing walls

Guess what? That has changed dramatically.

The University of Maine might be the biggest offender when it comes to opulent gyms. The university put $25 million into its 87,000-square-foot fitness center. It has floor-to-ceiling windows, which is a departure from the fitness centers of the old days that barely had enough light to see the free weights. The rock-climbing wall helps the kids stay in shape, or they can utilize the 140 pieces of equipment.

The crown jewel is the indoor aquatic complex, though. With a lap pool, coed sauna, and a hot tub big enough for 20 people, it’s amazing these kids have enough time to do anything but soak in the water. Oh, but when they do want to get out, they can rent snowshoes or cross-country skis from the center and hit the trails. Can you imagine having all that in college?

That gym sure does sound nice, but think about that price tag. If a school pays $25 million on a gym, it has to get the money back somehow, and that is where those high tuition prices come into play. There is no such thing as a truly “free” amenity in college.

And did I mention waterparks?  And lazy rivers?  There is actually an article comparing the best 

Cafeterias – 5-Star Cooking at College

College cafeterias used to have some pretty bad food. In fact, there were times when it was hard to get meals down. It seemed like the food had been warmed up over 100 times by the time it finally made it to your tray. Sometimes, it felt like the food was older than you were.

Still, even though the food wasn’t good, you ate it because that’s all you had. You just tried to imagine your mom’s homecooked meals while stuffing the overcooked chicken down your throat.

Now, though, students don’t have to worry about finding good food at college. Cafeterias are so much better than ever before, and many have gone a little too far.

Bowdoin College in Brunswick, Maine, is the perfect example of how far schools have gone when it comes to dining. This college offers gourmet dishes in the dining hall. Can you imagine getting Asian-style pork with duck sauce or mussels at the campus cafeteria? Well, you can here. The college even has lobster bakes that include fresh lobsters and other seafood options. Lobster isn’t cheap, and the idea of having a lobster bake at college is borderline ridiculous.

Then, it has its own on-campus café. Forget the Freshmen 15 at this school. It might turn into the Freshman 50 with all that good eating.

The Complete Luxurious Experience – Amenities at Every Turn

Some schools don’t just offer nice dorm rooms or great food. They have a little bit of everything, creating a resort-like atmosphere at a price most people can’t afford.

High Point University in High Point, North Carolina, is the perfect example of the 5-star resort experience some universities are offering. It underwent a $700 million campus renovation, and now it offers everything you would want when you’re on vacation, but these kids get it while in school.

The residence halls have pools and restaurants, and you can play basketball and volleyball without leaving home. Oh, and one of the dorms even lets people live with their pets. Seriously. Students are allowed to share dorm rooms with their pets. That is insane.

Then there’s the campus movie theater. The students get free tickets and concessions, but are those amenities really free? It also has an arcade, plus its own steakhouse. Students can use their meal plans to get a five-course meal once a week.

All of this for around 4,000 students.

As you can imagine, those 4,000 students pay a hefty price tag to go to this school. Tuition is $35,118, and the room and dining plan is $14,130. That doesn’t leave much money for books, does it?


Football – The Pastime Gets Expensive

Football and college have gone together for generations, but it used to be a fun game to watch with your friends. Now, it’s a big business. Colleges want to have the best football programs to bring in students, and that costs money.

The University of Alabama football coach Nick Saban makes a whopping $11.1 million, with a potential bonus of $700,000. Clemson’s Dabo Swinney is the second-highest paid college coach at $8.5 million. Don’t feel bad for Swinney. He has a potential bonus of $1 million.


How do you think these college coaches get paid? Sure, the programs bring in money, but it’s highly likely that tuition supports a lot of those salaries. It costs to go to a school with a top-notch football program. Cheering the team on might be fun, but writing those tuition checks sure isn’t.

The Unintended Consequences – Drowning in Debt

These amenities are wonderful, but there is an unintended consequence. Student loans are out of control.

Student loan debt has reached $1.48 trillion in the United States. That’s trillion, with a “T.”

That debt is divided among 44.2 million Americans.

Sadly, many cannot afford to pay their student loans. There is a delinquency rate of 11.2 percent. That’s a scary statistic. Colleges cannot take the degrees back from the student when they don’t pay their loans, so what is going to happen? The student loan bubble is likely about to burst. Remember what happened when the housing bubble burst? That was catastrophic. It could be even worse when the student loan bubble bursts.

That’s all terrifying, but do you want to know the most troubling static?

Parent Plus loans have reached the $88 billion mark. These loans have the highest interest rates and origination fees of all the student loans, and that’s why so many parents are carrying student loan debt into retirement.

Ask yourself this. If you didn’t have the money to save for college in advance, are you going to have the money to pay those loans off in the future?

The answer is no. That means if you take out these loans, you’re likely to end up paying on them well into your golden years. Is that really how you want to spend your retirement?

Make Smart Decisions

Parents and students need to come together and make smart choices about college. Your coed does not need a swimming pool on the roof or a 5-course meal. He or she can also leave Fido at home instead of bringing the pup into the dorm.

These amenities are not free. You pay for them now, or you pay for them later with student loans. Either way, you are wasting your money when you get all these amenities.

The student loan bubble will likely burst, and soon, families will be forced into making smarter decisions. Be a leader instead of a follower. Make smart decisions now so you won’t have to worry about it later.

If you aren’t sure how to pay for college without taking out loans, enroll in a virtual workshop and get the information you need. That way, you won’t drown in debt to fund a four-year degree.

About the Author Nancy McKenna

I'm a personal finance geek. A real estate investor. An accountant, a single mother. And I'm going to get my kids through college without student debt! Will you?

follow me on: