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📂 Category: Colleges & Universities,Careers
💡 Here’s what you’ll learn:
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Key takeaways
- Going to college half a century ago was expensive, but it was affordable compared to the cost of an education in 2024-2025.
- Between the 1974-75 and 2024-2025 school years, the cost of a public college education rose more than 355%.
- Economic conditions, rising operating costs, rising fees, and increasing housing costs are pushing the cost of college to higher levels.
- Many wonder if a college degree is worth the price.
- Others enroll in college but delay other accomplishments, such as marriage and buying a home.
With the average cost of a four-year public college exceeding tens of thousands of dollars and the average private institution costing thousands more, college has become too expensive for many students.
If we compare today’s costs to what you would have spent about fifty years ago, in the 1974-75 school year, you would get a better deal then, even adjusting for inflation.
College Costs: Then and Now
The cost of college rose dramatically between the 1974-1975 and 2024-2025 school years. The table below highlights tuition and fee costs for full-time undergraduate students at public colleges. The number in parentheses is the cost in September 2024 dollars, calculated using the Consumer Price Index Inflation Calculator from the Bureau of Labor Statistics (BLS):
| 1974-1975 | 2024-2025 | |
|---|---|---|
| Institutions 4 years | $1,008 ($6,281) | $28,580* |
| 2 year institutions | $328 ($2,044) | $4,050 |
Using $2,024, public college tuition and fees have increased more than 355% since the 1974-75 school year.
To put this into perspective, the money used to fund tuition and fees at four-year institutions in the 1974-75 school year of $2,024 could have bought you a family vacation or a used car. Or you could have used it to contribute to an annuity individual retirement account (IRA).
Meanwhile, you could have used the average cost of tuition and fees for 2024-2025 to buy a subcompact SUV.
College affordability: Tuition fees versus family income
College was affordable in 1974, especially when considering how much people were earning at the time. The median household income in 1974 was $11,100. When adjusted for inflation, this is $69,167 in 2024 dollars.
In other words, for the average taxpayer, the cost of college in 1974 represented a smaller percentage of your annual income than it does in 2024.
In 1974, for the average taxpayer, the cost of a four-year degree ($1,008) represented only 9% of their annual income ($11,100) and only 3% of their annual income for a two-year degree ($328).
In 2024, the average income is $83,730. So, for the median taxpayer, the cost of higher education was about one-third (34%) of their annual income for a four-year degree ($28,580) and 5% of their income for a two-year degree ($4,050).
So what would the average income buy in 1974 compared to 2024? Below is a side-by-side comparison of the cost of some goods and services.
| 1974 | 2024 | |
|---|---|---|
| New house | $36,200 ($225,571) | $665,298 |
| New Ford Bronco (base model) | $4,394 ($27,380) | $39,630 (Big Bend model) |
| Gasoline (price/gallon) | $0.39 ($2.43) | $3.30 |
| Loaf of bread (one pound) | $0.20 ($1.30) | $1.95 |
| Eggs (dozen) | $0.58 ($3.51) | $3.20 |
| Sealy mattress | $55.00 to $79.00 ($343 to $492) | $600 to $1,200 (Beautyrest Silver BRS900-C Medium) |
Why are college costs rising?
There are several factors that have led to higher education costs, including:
- Economic conditions that led to the erosion of endowments
- – High operating costs for schools
- Higher cost of newer amenities and campus experiences
- Higher supplementary fees
- Increased housing costs
- Decrease in government funding for public universities
- High demand for graduates of post-secondary institutions in the workforce
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The increase in the number of administrative staff in colleges at all institutions also contributed to the increase in tuition fees. The employment rate for these positions has exceeded the number of faculty positions.
Consequences of high college costs
The financial consequences of going to college were significant in the 1974-75 school year. However, compared to modern times, the goals of starting a family and owning a home were not so far-fetched.
Tuition was affordable in 1974, which is why financial aid was not used as a primary funding source for college. As many as 1.6 million of the 8.8 million enrolled students (18%) received some type of financial aid in the 1974-75 school year. Pell Grant recipients were able to use them to cover 75% of tuition costs at four-year schools, compared to about 28% of total costs today.
Student loans are commonly used as the primary source of financing for college education today. Nearly 40% of students pursuing post-secondary education take out student loans, with the average debt reaching $38,883. Total student loan debt was $1.78 trillion as of the fourth quarter of 2024.
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