Tuition prices have been rising at unsustainable rates for the past few years, but not anymore. Prices are finally stagnating, indicating a hopeful change toward affordable education and away from financial disaster.
For an industry that has been marred with a history of ripping off its consumers, our economy has finally answered college campuses with price stagnation and declining enrollment.
College tuition prices have been facing a bubble. Over the past decade, college tuition prices increased by 63 percent, causing our generation to fall right into a student-debt crisis.
When tuition is unaffordable, students take on loans in the hopes that hefty semester price tags will pay off with jobs. But these investments haven’t been paying off, as 44 percent of college graduates have been leaving school with low-wage jobs that don’t require degrees.
With a debt crisis that’s impossible to overlook, more kids are making economically savvy choices about their lives in regards to college. As consumers are becoming more informed, the college economy is being forced to respond in tow.
New consumers, new trends
With every year comes a new set of students that faces the difficult choices that come with choosing a college. But these market trends are indicating that financial security may be playing a bigger role in these choices. College enrollment has been declining every year since 2011, and the consequences of our student-loan crisis have been impossible to miss.
The reason behind price stagnation lies within a simple economic concept: competition. More schools have opened up to try to cash in on high tuition prices, forcing other schools to stagnate their prices to compete.
Private colleges also face steep competition from the low, affordable costs of public universities, and they have been scrambling to respond. Some have offered discounts in an attempt to offset their excessive tuition prices. In the past, these efforts haven’t been too fruitful, as tuition prices were rising at a much faster rate than financial aid. Perhaps the current price stagnation will make these discounts boost enrollment numbers.
A brighter, less costly future?
So, colleges are face to face with a new challenge: a nation of informed consumers. And these consumers are changing up the game for a market that, previously, private colleges have had total control over. These schools have been able to set prices at wherever they felt like, reeling in absurd amounts of cash at the expense of students nationwide.
But that era of private domination may be coming to a close. Private universities don’t have the economic chokehold that they used to. Underemployment among college grads, oversupply among universities and increased awareness among students are all factors that play into the fight for affordable education.
Let’s face it: private universities are still very expensive. But prices are finally responding to market demands in a way that isn’t financially detrimental for students. Colleges are waking up to the fact that not everyone can afford to shell out $60,000 for what has become an insecure investment in one’s future. Hopefully, we’ll be able to see college price tags continue to turn toward a new, affordable direction.
Have something to add to this story? Comment below or join the discussion on Facebook.
Header image: Adobe Stock