Veera Korhonen
Research expert covering United States data for society
The cost of college in the United States - Statistics & Facts
In the United States, university graduates have been financially struggling as the cost of higher education continues to rise. As of 2022, the average cost of tuition and fees at U.S. higher education institutions was 14,307 U.S. dollars, excluding room and board, almost doubling since 2000. Although attending college is often associated with higher earning potential, the cost of attendance in the United States has increased significantly faster than wages . College costs are also considerably higher in the U.S. compared to many other high-income countries, where tuition is often free or heavily subsidized. For a four-year degree, students could expect to pay an average of 30,031 U.S. dollars for tuition, fees, room, and board in 2022. Despite rapidly rising costs, the U.S. continues to see high rates of college graduates, making up 37.7 percent of the total population as of 2022. This increase in graduates is not caused by higher education becoming more financially accessible; on the contrary, the rising demand for higher education in the U.S. is likely to be contributing to the rising cost.
While the student debt continues to rise, the amount of loans provided to students in the U.S. has decreased in recent years. Increasing rates of student loan debt have been met with an unstable job market, making the possibility of repayment more difficult. A 2022 survey found that 38 percent of student loan borrowers struggled significantly to afford their loan payments, despite loan payment pauses implemented by the Department of Education during the COVID-19 pandemic, and as of the third quarter of 2023, outstanding student loans in the U.S. had reached over 1.73 trillion U.S. dollars. Student loan repayment often begins shortly upon graduation, which may corner graduates into underemployment or fields unrelated to their field of study in order to make the loan payments. In September 2023, over 40 percent of recent college graduates in the U.S. were underemployed, meaning they were working in a job that typically does not require a bachelor’s degree.
As Americans experience dramatically high levels of debt at a time of stagnant wage growth, increasing living expenses, and a lack of well-paying jobs that do not require a college degree, many are questioning whether the benefits of higher education still exceed the costs. A 2023 survey found over half of Americans to believe that college is now more of a gamble that may not pay off in the end. Although earnings still increase with a college degree, the return on investment for younger generations with limited resources may not be as high. The financial consequences of attending college have been found to significantly impact the lives of younger Americans; around a quarter of Gen Z in 2022 were unable to save for retirement or emergencies and had to delay homeownership due to student debt. In addition, government aid has not kept up with rising costs; the Federal Pell Grant reserved for students who demonstrate exceptional financial need only covered around 31 percent of expenses in private four-year institutions and 13 percent in public institutions in 2023/24. This program has also come under criticism as middle-class American families often earn too much money for their children to be eligible, while not earning enough to comfortably cover the cost of higher education.
Consequently, many students have become increasingly reliant on student loans and often cannot afford to pay them back. Borrowers in the bottom 25 percent of the family income bracket, borrowers who did not complete a degree, and Black borrowers have the highest student loan default rates, meaning they missed payments for an extended period of time at risk of serious financial consequences. Almost half of Americans with an outstanding student debt balance in 2023 also reported additional difficulty paying for other bills and expenses, further suggesting that taking out student loans to afford higher education may not be worth the risk for some. While plans of broad student loan forgiveness to provide relief for Americans struggling with student debt have recently gained traction, such solutions have caused political controversy over the appropriate level of federal involvement in student loan programs. According to a 2023 study, however, 60 percent of Americans agreed that a student loan forgiveness program which forgives up to 10,000 U.S. dollars for people making less than 125,000 U.S. dollars per year would be effective at preparing young Americans for the future.
Taking out student loans to afford higher education
Student loans in the United States may also be affecting the cost of higher education, despite originally intended to alleviate the rising cost of tuition. In the 2021/2022 academic year, the average amount of debt among those who took out student loans was 27,400 U.S. dollars, an increase from previous years. Taking on large debts has become necessary to cover tuition at many colleges; at leading U.S. universities, annual tuition and fees ranged from 39,338 to 68,230 U.S dollars in the 2023/24 academic year. Princeton University and the Massachusetts Institute of Technology were the top ranked, with annual tuition fees of 59,710 and 60,156 U.S. dollars respectively. In the same year, the total cost of a four-year degree, including tuition and fees, room and board, allowances for books and supplies, transportation, and other personal expenses, was estimated to be 28,840 U.S. dollars for public, in-state university students and 60,420 U.S. dollars for private nonprofit college students.While the student debt continues to rise, the amount of loans provided to students in the U.S. has decreased in recent years. Increasing rates of student loan debt have been met with an unstable job market, making the possibility of repayment more difficult. A 2022 survey found that 38 percent of student loan borrowers struggled significantly to afford their loan payments, despite loan payment pauses implemented by the Department of Education during the COVID-19 pandemic, and as of the third quarter of 2023, outstanding student loans in the U.S. had reached over 1.73 trillion U.S. dollars. Student loan repayment often begins shortly upon graduation, which may corner graduates into underemployment or fields unrelated to their field of study in order to make the loan payments. In September 2023, over 40 percent of recent college graduates in the U.S. were underemployed, meaning they were working in a job that typically does not require a bachelor’s degree.
Is college still worth the cost?
As Americans experience dramatically high levels of debt at a time of stagnant wage growth, increasing living expenses, and a lack of well-paying jobs that do not require a college degree, many are questioning whether the benefits of higher education still exceed the costs. A 2023 survey found over half of Americans to believe that college is now more of a gamble that may not pay off in the end. Although earnings still increase with a college degree, the return on investment for younger generations with limited resources may not be as high. The financial consequences of attending college have been found to significantly impact the lives of younger Americans; around a quarter of Gen Z in 2022 were unable to save for retirement or emergencies and had to delay homeownership due to student debt. In addition, government aid has not kept up with rising costs; the Federal Pell Grant reserved for students who demonstrate exceptional financial need only covered around 31 percent of expenses in private four-year institutions and 13 percent in public institutions in 2023/24. This program has also come under criticism as middle-class American families often earn too much money for their children to be eligible, while not earning enough to comfortably cover the cost of higher education.
Consequently, many students have become increasingly reliant on student loans and often cannot afford to pay them back. Borrowers in the bottom 25 percent of the family income bracket, borrowers who did not complete a degree, and Black borrowers have the highest student loan default rates, meaning they missed payments for an extended period of time at risk of serious financial consequences. Almost half of Americans with an outstanding student debt balance in 2023 also reported additional difficulty paying for other bills and expenses, further suggesting that taking out student loans to afford higher education may not be worth the risk for some. While plans of broad student loan forgiveness to provide relief for Americans struggling with student debt have recently gained traction, such solutions have caused political controversy over the appropriate level of federal involvement in student loan programs. According to a 2023 study, however, 60 percent of Americans agreed that a student loan forgiveness program which forgives up to 10,000 U.S. dollars for people making less than 125,000 U.S. dollars per year would be effective at preparing young Americans for the future.
