Cuts to higher education funding

Lackluster state funding is a major reason for rising college costs. From 2008 to 2018, the average tuition at four-year public colleges increased in all 50 states. On average, tuition at these schools has increased by 37%, and net costs (including factors like scholarships and grants) have increased by 24%, according to a 2019 report from the Center on Budget and Policy Priorities. The CBPP report analyzes state funding for higher education and published in-state public college costs from the 2008 school year to the 2018 school year. Researchers Michael Mitchell, Michael Leachman and Matt Saenz found that funding for higher education has not rebounded to pre-recession levels in most states, and that college costs are rising as a result. From the 2008 school year to the 2018 school year, 41 states spent less per student, after adjusting for inflation. During that time period, states spent an average of 13% less per student — about $1,220. "It really does start to beg the question of what constitutes public higher education," Michael Mitchell, lead author of the report and senior director and counselor of Equity and Inclusion at the CBPP told CNBC Make It. "Nearly every state has shifted the responsibility of funding higher education from the state to students over the last 25 years, with the most drastic shift occurring in the past decade." Several of the states with the biggest drops in per-student spending have seen significant tuition increases. In Louisiana, for instance, published tuition at public four-year colleges and universities has doubled since the 2008 school year. In Alabama and Arizona, tuition at public colleges and universities is up by more than 60%. Per-student funding for higher education has increased in nine states since the Great Recession — New York, Montana, California, Alaska, Wisconsin, Hawaii, Wyoming, North Dakota and Illinois — but average tuition at public universities has still increased in all 50 states. Mitchell said college costs can rise even in states that increase funding because there are other factors that influence college finances, including cost of living.

Cost of living

″[State funding] is a factor — a relatively sizable factor — but other things also play a role," said Mitchell. "Health-care cost, retirement costs for faculty and staff, infrastructure, things like that. While state spending is one variable, it exists in a broader range of calculations." One of those variables is cost of living. In the United States, cost of living has steadily increased over the past several years. College students are not immune to the impact of this increase, since many American students choose to move away from home and live on campus or near campus. Increased cost of living also impacts how much colleges spend on employees. For instance, health-care costs increased significantly this decade, including those costs paid by employers.

Other expenses