Charted: The Rising Average Cost of College in the U.S.
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The Rising Cost of College in the U.S.

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The Briefing

  • Since 1980, college tuition and fees in the U.S. have increased by 1,200%
  • Because of the shift to online classes, 2020 saw the lowest tuition increase in the last four decades

The Rising Cost of College in America

The average cost of getting a college degree has soared relative to overall inflation over the last few decades.

Since 1980, college tuition and fees are up 1,200%, while the Consumer Price Index (CPI) for all items has risen by only 236%.

The Average Cost of College Over Time

Back in 1980, it cost $1,856 to attend a degree-granting public school in the U.S., and $10,227 to attend a private school after adjusting for inflation.

Since then, the figures have skyrocketed. Here’s how college tuition and the CPI have both changed since 1980:

YearAvg. Undergrad Tuition and Fees (Public) Avg. Undergrad Tuition and Fees (Private)CPI % Change (College Tuition and Fees)
CPI % Change (All Items)
1980$1,856$10,2270%0%
1990$2,750$16,590150.2%63.5%
2000$3,706$21,698382.5%117%
2010$5,814$25,250828.6%178.8%
2020$9,403$34,0591198.9%231.82%

Source: National Center for Education Statistics, U.S. News
Note: Tuition and fees are in constant 2018-19 dollars. For public schools, in-state tuition and fees are used. All CPI % change values calculated for the month of January.

According to the Bureau of Labor Statistics, the highest year-over-year change in college tuition and fees was recorded in June 1982 at 14.2%— and over that same time period, overall inflation was up 6.6%.

On the other hand, November 2020 saw the lowest year-over-year change in the average cost of college at 0.6%, mainly as a result of the shift to online classes amid the COVID-19 pandemic. In fact, some schools are offering discounts to students, and some are even canceling scheduled tuition increases entirely in a bid to remain attractive.

Why is the Cost of College Rising?

While it’s difficult to pinpoint the exact reasons behind the rapid surge in the cost of education, a few factors could help explain why U.S. colleges hike their prices.

  • Decrease in State Funding
    State funding per student fell from $8,800 (2007-08) to $8,200 (2018-19), while the share of tuition in college revenues increased.
  • Increase in Demand
    The demand for a college education has increased over time. Between 2000-2018, undergraduate enrollment in degree-granting institutions increased by 26%.
  • Increase in Federal Aid
    According to a study from the New York Fed, every $1 in subsidized federal student loans increases college tuition by $0.60. Student loan debt has doubled since the 2008 recession.

Furthermore, the costs of providing education, known as institutional expenditures, have also escalated over time. These include spending on instruction, student services, administrative support, operations, and maintenance—all of which are critical to the student experience.

With student debt at unprecedented levels and ongoing public debates surrounding the rising costs of education, it’s uncertain how college tuition will evolve. However, given the onset of virtual classes, further hikes to college tuitions may be on hold for the foreseeable future.

Where does this data come from?

Source: U.S. Bureau of Labor Statistics
Details: Data for the average cost of college comes from the Consumer Price Index (CPI) for College Tuition and Fees. Overall inflation is measured by the CPI for all items (CPI-U). Data is seasonally adjusted and the reference base for the indices is 1982-84 = 100.

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Ranked: These Are 10 of the World’s Least Affordable Housing Markets

An analysis of 90+ major cities reveals which ones are the least affordable housing markets based on their price-to-income ratio.

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The Briefing

  • For the 12th year in a row, Hong Kong is the world’s least affordable housing market, according to Demographia’s ranking of 92 cities in select countries
  • Sydney, Australia moves up one spot from last year’s ranking to take second place

These Are 10 of the World’s Least Affordable Housing Markets

It’s become increasingly difficult for middle-class families to purchase a home over the last few years—and the global pandemic has only made things worse.

According to Demographia’s 2022 Housing Affordability Report, the number of housing markets around the world deemed “severely unaffordable” increased by 60% compared to 2019 (prior to the pandemic).

This graphic looks at some of the least affordable housing markets across the globe, relative to median household income. The report covers 92 different cities in eight nations: Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom, and the United States.

The Least Affordable Housing Markets

Before diving in, it’s worth outlining the methodology used in this report, to help explain what’s classified as a severely unaffordable housing market.

To calculate affordability, a city’s median housing price and divided by its median household income. From there, a city is given a score:

  • A score of 5.1 or above is considered severely unaffordable
  • 4.1 to 5.0 is considered seriously unaffordable
  • 3.1 to 4.0 is considered moderately unaffordable

All the cities on this graphic are classified as severely unaffordable⁠—and, for the 12th year in a row, Hong Kong takes the top spot as the world’s most unaffordable housing market, with a score of 23.2.

Housing MarketNationScore
Hong Kong🇭🇰​ Hong Kong (SAR)23.2
Sydney, NSW🇦🇺​ Australia15.3
Vancouver, BC🇨🇦​ Canada13.3
San Jose, CA🇺🇸​ U.S.12.6
Melbourne, VIC🇦🇺​ Australia12.1
Honolulu, HI🇺🇸​ U.S.12.0
San Francisco, CA🇺🇸​ U.S.11.8
Auckland, AUK🇳🇿​ New Zealand11.2
Los Angeles, CA🇺🇸​ U.S.10.7
Toronto, ON🇨🇦​ Canada10.5

One reason for Hong Kong’s steep housing costs is its lack of supply, partly due to its lack of residential zoning—which only accounts for 7% of the region’s zoned land. For context, 75% of New York City’s land area is dedicated to residential housing.

Sydney moved up one spot this year, making it the second most expensive city to purchase a home on the list, with a score of 15.3. Besides Hong Kong, no other city has scored this high in the last 18 years this report has been released.

There are several theories for Sydney’s soaring housing rates, but industry expert Tom Forrest, CEO of Urban Taskforce Australia, boils it down to one fundamental issue in an interview with Australia Broker—supply isn’t keeping up with demand:

“Housing supply has been consistently not meeting demand in the Greater Sydney and across regional New South Wales…if you have supply consistently not meeting demand then the price will go up. That’s what happened and we’re seeing it in abundance.”Tom Forrest, CEO of Urban Taskforce Australia

The COVID-19 Impact

Middle-income earners were already feeling the squeeze prior to the global pandemic, but COVID-19 only exacerbated housing affordability issues.

As people began to work from home, high-income earners started to look for more spacious housing that wasn’t necessarily in the city center, driving up demand in suburban areas that were relatively affordable prior to the pandemic.

At the same time, supply chain issues and material costs impacted construction, which created a perfect storm that ultimately drove housing prices up.

But with interest rates rising and COVID-19 restrictions easing around the world, some experts are predicting a market cool down this year—at least in some parts of the world.

>>Like this? Then you might like this article: How Much Prime Real Estate Could You Buy for $1M?

Where does this data come from?

Source: Demographia
Details: The affordability score is calculated by taking a city’s median housing price and dividing it by the median household income. Anything over 5.1 is considered severely unaffordable
Notes: Data includes 92 metropolitan markets across eight countries; Australia, Canada, Ireland, Singapore, China, New Zealand, the U.K., and the U.S., as of the third quarter of 2021. Many European countries, along wth Japan, we excluded from the dataset, because information on median income was not readily available.

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Poll: Inflation is the Top Financial Concern for Americans

Many Americans are feeling the sting of inflation as everyday items like food and fuel have seen big price increases.

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The Briefing

  • Inflation has quickly become the top financial concern for American families
  • Compared to 2021, far fewer Americans believe their financial situation is improving

Poll: Inflation is the Top Financial Concern for Americans

A recent survey by Gallup discovered that inflation has become the top financial concern for Americans, surpassing other issues like low wages and housing costs.

While this result may not be too surprising, it is interesting to see how today’s concerns compare to that of previous years. For reference, the Consumer Price Index (CPI) has grown 8.3% between April 2021 and April 2022, representing a near 40-year high.

Poll Results

Results were collected in April 2022 and are based on the responses of over 1,000 U.S. adults. In this case, the specific question was: What is the most important financial problem facing your family today?

TrendApril 2022April 2021April 2020April 2019
Inflation32%8%3%6%
Low wages11%10%11%11%
Gas prices10%1%----
Housing costs8%9%9%8%
Health care costs7%8%8%17%

Percentage of respondents. Includes the top five categories, based on April 2022 results.

Based on these results, we can see that inflation began to gain momentum in early 2021. Rising gas prices, which are a significant contributor to overall inflation, also popped up in 2021.

Implications

Significantly fewer Americans feel confident about their financial situation due to the rising cost of living. This was captured in the same Gallup survey referenced above.

Income Group20222021Percentage point decrease
Upper 50%28%-22
Middle48%39%-9
Lower63%45%-18

Percentage of respondents who say their personal financial situation is improving.

The largest decreases were seen among the upper and lower income groups.

Upper income families tend to own more financial assets like stocks and bonds. An inflationary environment, especially when combined with rising interest rates, can eat away at the returns generated by these assets, which could explain this cohort’s drop in optimism.

Lower income families, on the other hand, are more likely to be struggling already. In fact, a 2017 report found that six in 10 Americans don’t have $500 in savings. With this in mind, it’s easy to see how an increase in the price of food or gas could cause worry.

Where does this data come from?
Source: Gallup
Notes: Interviews conducted April 1-19, 2022, with a random sample of 1,018 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. For results based on the total sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level.

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