The Price For Some Colleges Just Hit This Very Troubling Number

Among the many financial hurdles that the younger generations have faced (namely, millennials), perhaps none have affected long-term financial health the way college tuition has. Despite the Biden administration's attempts to wipe out significant student loan debt, thousands of people across the country face mounting debts with what can feel like never-ending interest accrual. According to the Education Data Initiative's analysis of Federal Reserve data, 42.8 million people in the U.S. have student loan debt with a total average loan balance of $40,681 across both federal and private loans. This brings the country's grand total to $1.753 trillion worth of student loan debt (keep in mind, there's a LOT to know about failing to pay your student loans).

However, despite the student loan debt cycle that's already plaguing millennials and Generation Z, many universities only continue to raise their tuition prices. As of the 2024-25 school year, some colleges are officially charging almost $100,000 for a single year of school. Vanderbilt University, in Nashville, Tennessee, quoted incoming engineering students a whopping $98,426 for a single year of classes, room, and board. While many students at Vanderbilt receive some kind of needs-based or merit scholarships and aid, 35% of the school's population pay the full sticker price.

The financial reality is that a $400,000 price tag attached to a four-year college degree simply isn't feasible for most Americans (note, the average national wage in 2022 was just $63,795). As college tuitions continue to creep up in the U.S., future generations could find themselves priced out of attaining a college education altogether.

It's important to realize just how significantly tuition costs have gone up since baby boomers and Gen Xers went to college. In 2006, student loan debt as a percentage of a person's personal income was 4.6%; however in 2017-19, it was 8.9%. Per the National Center for Education Statistics, the average cost of undergraduate tuition in the U.S. has more than tripled since the 1963-64 school year (through the 2020-21 school year). Breaking it down even further, average tuition costs jumped a whopping 65% just between 2000 and 2021. During that same time period, the average tuition at public four-year institutions rose by 70% while four-year for-profit school tuition actually decreased by 7%. (On that note, it could be worth avoiding certain degrees that are less likely to pay off post-graduation).

While high-end private schools, like Vanderbilt, approach $100,000 for the upcoming school year, there are other educational options with lower price tags. In fact, according to the College Board's Trends in College Pricing 2023 report, the average price for tuition, fees, housing, and food (for the 2023-24 school year) was $56,190 at private nonprofit four-year schools, and just $24,030 for in- state students at four-year public universities. While these costs still highlight an increase over the previous 2022-23 school year (a 4% increase for private universities, and 2.5% for public), as well as a general increase over 1963 tuition rates (which averaged $4,648), they also show there are more affordable options for students than colleges like Vanderbilt are offering.

Another important factor to consider when it comes to tuition costs is how increases can and do disproportionately affect people of color. According to the Education Data Initiative's Student Loan Debt by Race report, Black college graduates owe, on average, $25,000 more in student loan debt than white college graduates. It's also worth mentioning that Black students are more likely to need financial aid, with 81% of Black students holding federal student loans for a bachelor's degree compared to 59% of white students.

This problem is only exacerbated as more time passes, with Black students owing an average of 188% more than white students borrowed just four years post-graduation. The added burden of higher student loan debt, combined with the systemic nature of the racial wealth gap ensuring less wealth, means that people of color are highly affected by the steady rise in college tuition costs.

Another group affected by increasing tuition costs is actually baby boomer and Gen X parents. A total 8.3% of all federal student loan borrowers are actually 60 and older (the oldest of the Gen X cohort turned 59 in 2024). This is due in large part to Parent PLUS loans, which many parents took out in order to help fund their children's college educations. Parent PLUS loans cover the cost of a child's college tuition with no limit on the amount the parent can borrow, making them especially appealing for students enrolled in more expensive schools.

However, these loans have also contributed to higher debt levels for older Americans. In fact, between 2017 and 2024, the federal debt amount for borrowers 62 years of age and older increased by 26.9%. Their average federal educational debt? $41,357.