The COVID-19 pandemic hit all of us hard. Between lost jobs, taking care of ill family members, remote learning, and much more, we’ve all dealt with our fair share of hardships over the past couple of years.
One industry that has been hit especially hard is higher education. As COVID-19 spread like wildfire in spring of 2020, many colleges closed their campuses, leaving students to finish their semesters virtually. Now, in January of 2022, we are not much better off. The Omicron variant continues to spread and many of the colleges and universities that had gone back to in-person learning have reverted to Zoom once more.
While all of this has been going on, college tuition has remained a topic of conversation and a concern for many as well. High tuition rates have historically thrown many young Americans into debt before they even embark on their career paths. While higher education is without argument a significant expense, since March 2020 the cost of college has interestingly not increased at the high rates we’ve all gotten used to. In fact, when accounting for inflation, some tuition rates have even decreased.
Here are three things you should know about the cost of college in the midst of the pandemic.
- Some universities have decided to freeze tuition rates.
Many colleges and universities recognize the economic challenges that students and families are facing and have chosen to keep their tuition flat. Furthermore, with 25% of students postponing college during the pandemic, some public universities in the United States have committed to freezing their tuition in hopes of attracting new students and retaining existing students.
Universities that have publicly committed to this policy include the University of Maryland, Duke University, the University of Massachusetts, Central Michigan University, and more.
- College tuition has been increasing at a low rate
While not all universities have committed to a tuition freeze, tuition rates are increasing at historically low rates. Between 1980-2019, tuition rates increased by almost 170%, whereas between 2020-2021, rates increased by less than 5%, according to the College Board’s 2021 Trends in College Pricing and Student Aid report.
- Emergency funding has slowed the increase of tuition rates
During the Great Recession, funding for higher education institutions was cut, which had devastating effects on the industry. When this pandemic hit, many feared that the same thing would happen all over again. However, emergency funding from the CARES Act made it possible for higher education institutions to keep their costs from sharply increasing.
The Higher Education Emergency Relief Fund (HEERF) made it possible for colleges to slow the rising tuition rates by providing scholarships and grants to students who needed it the most. The program, which started in March 2020, has already been extended twice, providing great relief to students who have been significantly affected by the economic challenges brought on by the pandemic.
What exactly does this mean for the future? Will these trends persist? It’s hard to say for sure. However, one thing we can say with certainty is that recent trends in college pricing and student aid are a welcome relief for many students and their families, and whether or not tuition rates continue to rise or remain the same, the pandemic has shed further light on the issues surrounding the high price tag of higher education.
At Triada Advisors, we know that family is everything. You want what’s best for your kids, and we want to help you get there. Our sustainable, growth-focused wealth management plans address education planning so that you and your family will be set up for success and security in the future.
Interested in incorporating education planning into your overall wealth management plan? Don’t hesitate to get in touch.