Why Is College So Expensive in America?

In 1980, you could work a summer job at minimum wage and cover roughly half a year's tuition at a public university. Today, working full-time at minimum wage all year barely covers a semester.

That shift did not happen because universities suddenly became more expensive to run. It happened because of two policy decisions that compounded into a debt crisis.

Decision one: state funding cuts. Public university funding is primarily a state responsibility, and starting in the early 1980s, states began steadily reducing their per-student appropriations. By 2026, many public universities receive less than 20% of their operating budget from state funding — down from over 50% in 1980. When state funding drops, tuition goes up to fill the gap. The shift was not accidental — it reflected an ideological choice to treat higher education as a personal investment rather than a public good. (State Higher Education Executive Officers Association, State Higher Education Finance)

Decision two: federal student loans without price controls. When the federal government expanded student loan availability, it solved the demand problem — students could borrow whatever tuition cost — without addressing the supply problem of rising costs. Colleges discovered that tuition could increase because students would borrow more. The price sensitivity that normally constrains markets was eliminated. (Federal Reserve Bank of New York, Student Loan and Tuition Analysis)

The result is textbook economics: when buyers can access unlimited credit for a purchase, sellers raise prices to capture it.

What has the money been spent on? Contrary to popular belief, faculty salaries have not been the driver — the percentage of college budgets going to instruction has actually declined. Administrative staff have grown nearly twice as fast as faculty since 1993. Campus amenities — recreation centers, dining upgrades, housing improvements — have expanded dramatically. These are competitive necessities in a market where schools compete for students, but they do not improve education.

The solutions exist and work in other countries: treat higher education as a public good, fund it publicly, and regulate the lending that otherwise allows prices to spiral unconstrained. The barrier is political, not practical. The industries that profit from the current system — banks, for-profit colleges, and increasingly public universities themselves — lobby against change.

You are not failing to afford college. The system was redesigned to make college unaffordable.