Adjusted for inflation, the average annual cost of attending a four-year college full time—including tuition, fees, room and board—in the U.S. has risen from $10,231 in 1980 to $28,775 in the 2019-20 school year, a roughly 180% increase, according to the National Center for Education Statistics.
“We’ve been telling everybody for decades, ‘You have to go to college,’ so the demand has shifted out like crazy, and lots of colleges aren’t functionally much bigger than they used to be, so each spot is more expensive,” said Dietrich Vollrath, a professor and chair of the Department of Economics at the University of Houston.
Federal Reserve System data shows more than 45 million borrowers nationwide have contributed to a cumulative student loan debt of roughly $1.75 trillion with more than $1.6 trillion of those loans issued by the federal government. In Texas, 52% of college graduates in the 2019-20 school year had taken on student loan debt with an average debt of $26,273, according to The Institute for College Access & Success.
In the five ZIP codes in and around the Pearland and Friendswood area, data shows over 142,700 people age 18 and older have some college experience or higher, or roughly 71.2% of the local population age 18 and older, according to U.S. Census Bureau data.
Locally, the cost of tuition for a year at Alvin Community College has increased by roughly 13% between the 2012-13 and 2022-23 school years, while the average annual cost of tuition at the University of Houston-Clear Lake has increased by over 36% within the same time frame, according to data from the colleges.
In hopes of providing relief, President Joe Biden announced Aug. 24 he would issue an executive order that will enable nearly 43 million Americans to have up to $20,000 in federal student loans forgiven.
While the plan has been hailed by borrowers, experts said they fear the loan forgiveness will only lead to further tuition inflation. Betsy Mayotte, president of The Institute of Student Loan Advisors, said while she supports the initiative, she believes it fails to address the root cause of the problem.
“Everybody talks about the student loan crisis, and it exists, but it’s a symptom—not the problem,” Mayotte said. “The problem is the cost of higher education, and this plan does nothing to address that.”
Costly tuition
Vollrath said inflation plays a role in the rising cost of attending college, but he also noted two additional factors that have led to steadily rising tuition rates.
According to Vollrath, rich economies such as the U.S. tend to see faster rates of inflation for services such as education and health care when compared to manufactured goods because the cost of producing those goods diminishes over time.
Vollrath said the second factor contributing to rising tuition costs has been a decrease in financial support from state governments. Between 2008-18, state spending for higher education in Texas dropped from $9,256 per student to $7,107—a 23.3% decrease, according to the Center on Budget and Policy Priorities.
"We’re getting around half the money we thought we might have been getting 20-30 years ago, and you have to account for it, so that ends up getting unloaded on the students usually,” Vollrath said.
During that same time frame, the average cost of tuition at four-year public colleges in Texas increased by $2,302, or 30.4%, CBPP data shows.
“If you lower the cost of your state institutions, that hypothetically would force these private universities to lower [their cost] just to be competitive,” Mayotte said.
However, Vollrath said he did not think the blame should be directed solely at declining state contributions to higher education.
“I think there are definitely things you can talk about on the university side,” he said, speaking generally about public colleges. “Why are universities paying for things that seem to drive up tuition that don’t seem to contribute towards the baseline of educating students?”
Plan basics
As outlined in an Aug. 24 news release from the White House, Biden’s three-part plan will provide up to $20,000 in debt cancellation to Pell grant recipients with loans held by the U.S. Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients.
The Biden administration began accepting applications for loan relief Oct. 17. However, the program was temporarily blocked by a federal appeals court Oct. 21 as it hears a motion from six states to stop the program permanently. Although the move prevents debt from being discharged, the White House is encouraging people to continue to submit applications.
Individuals will be eligible for this relief if their income is less than $125,000 or $250,000 for married couples. Current students with loans will also be eligible for debt relief; however, borrowers who are dependents will be eligible based on their parents’ income.
Additionally, the White House announced the pause on federal student loan repayments will be extended one final time through Dec. 31 and that borrowers should expect to resume payments in January. Per the release, an application for borrowers to claim relief will be available before the pause on federal student loan repayments ends.
The Department of Education estimated roughly 43 million borrowers will qualify for relief, including 27 million borrowers eligible to receive up to $20,000 in debt cancellation.
“People that owe [$10,000] or less or [$20,000] or less tend to be the ones that struggle the most,” Mayotte said. “The reason their balance is so low to begin with is because of one of two things: Either they’ve been paying forever, or ... they have debt and no degree.”
The Department of Education is also proposing a new income-driven repayment program as part of the plan, under which monthly payments for undergraduate loans will be capped at 5% of a borrower’s discretionary income—about half of the rate most borrowers currently pay.
The plan also seeks to improve the Public Service Loan Forgiveness program by proposing a rule that borrowers who have served in the military; worked at a nonprofit; or worked in federal, state, tribal or local government receive appropriate credit toward loan forgiveness.
Local perspective
Across Alvin Community College, the cost per credit hour this fall is $47 for in-district students and $143 for nonresident students. These rates have been the same since at least the 2020-21 school year, which was the last time the college raised rates, ACC Vice President of Administrative Services Karl Stager said.
According to college data, ACC is cheaper than UHCL, where the preliminary cost per credit hour is $251 for 2022-23, the same as last year.
About 8% of ACC students borrow loans, and that is at an average of $5,550. At UHCL, 28% of students borrow, and that is at an average of $9,632, according to data from both colleges.
Still, UHCL prides itself on its cost, officials said.
“UHCL is one of the most affordable four-year universities in Texas,” said Kara Hadley-Shakya, UHCL interim vice president for strategic enrollment management. “Our focus is to keep education affordable.”
Mark Denney, UHCL vice president for administration and finance, agreed.
“UHCL offers a focused path to complete your full bachelor’s education in four years at a relatively low cost, where many community college students can transfer and still need to spend more than an additional two years at UHCL, making the total cost much closer if not more than attending UHCL from the start,” Denney said.
ACC officials said the college has been focused on lowering costs by ensuring students take only the classes they need to graduate to prevent debt. These proactive methods are better long-term solutions than reactive debt relief, they said.
“For us, at community colleges, I think our prices are so low that we’re not saddling students with a lot of debt,” Stager said.
Hadley-Shakya said students appreciate loan forgiveness.
“Anything that eases student debt burden is meaningful,” she said. “Student loan relief may not solve all the financial challenges facing today’s students, but it certainly could be part of the solution.”
Saab Sahi contributed to this report.
