Supply & Demand Reduces Tuition Costs

The Wall Street Journal: “U.S. college tuition is growing at the slowest pace in decades, following a nearly 400% rise over the past three decades that fueled middle class anxieties and a surge in student debt … Abundant supply is running up against demand constraints … Longer-running economic and demographic shifts also are at play. Lower birthrates and the aging of baby boomer children have reduced the pool of traditional college-age Americans.”

“Another factor: Congress last increased the maximum amount undergraduates could borrow from the government in 2008. Some economists have concluded schools raise prices along with increases in federal financial aid. A clampdown on aid, in turn, could limit the ability of schools to charge more … Moreover, the number of schools is declining in response to oversupply, particularly among for-profit schools, a trend that could reduce competition and increase pricing leverage for schools that remain open.”

“Public four-year colleges, which teach the majority of bachelor’s candidates in the nation and tend to be cheaper than private schools, are benefiting from increases in direct state funding as tax revenues improve. That has eased schools’ need to raise prices on students … State officials have also pressured schools, through legislation and public speeches, to rein in prices, and they are admitting more international students to boost revenues.”