Students face sticker shock as college costs rise
A new report shows that many high school students and parents vastly underestimate college prices.
Factors such as inflation and earning potential make students more worried about affording college than contracting COVID-19, according to one survey.
New studies show that families severely underestimate how much college is likely to cost them at the same time that college students struggle to pay for their education.
A report published by Fidelity Investments found that one in four high school parents and more than one in three high schoolers “believe the full sticker price for a year of college will be $5,000 or less.”
CNBC notes that these estimates are a far cry from the real sticker prices, which College Board says averaged $10,560 for public, in-state, four-year institutions in the 2020-2021 school year. These universities raised their prices by an average of 1.1 percent between the 2019-2020 school year and the 2020-2021 school year.
Universities have received $38.13 billion in federal COVID relief dollars since March 2020.
The cost of college typically rises at double the rate of inflation, according to FinAid.org. This means that the cost of college rises twice as fast as the cost of everything else.
However, thanks to ongoing economic inflation, the cost of college is no longer snowballing faster than the costs of other consumer goods. The Consumer Price Index rose 5.4 percent over the past 12 months.
Many students report feeling the economic pinch and worrying about if, and how, they will pay for college. A survey of college students by Scholarship America found that “77 percent said the pandemic has reduced their ability to earn income needed for their education.”
That statistic means that students are concerned about paying for college than they are about potentially contracting COVID-19 when classes resume. In the survey, 64 percent of students ranked college costs among their top concerns, though only 42 percent listed concerns over COVID-19 in that same category.
Meanwhile, college faculty and administrators say their schools may now be less capable of meeting students’ financial needs. The Association of American Colleges and Universities reports that, based on a recent survey of their members, “60 percent of respondents indicated they are very concerned about the overall financial stability of their institution.” 79 percent said they are concerned about the potential for long-term “increased financial need among families and students” in the wake of the pandemic.
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