Recent analyses have shown that the cost of college tuition has increased 178% between January 2000 and June 2022. With tuition rates so high and student loan debt a topic of political debate, it’s no secret that many are questioning the value of a college degree today.
At the same time, companies have begun eliminating college degree requirements in order to attract new applicants during the labor shortage, giving non-college-educated workers greatly increased earning potential.
Average Cost of In-State, Public Tuition + Living Expenses Could Be as Much as $31,000/Year by 2030
Spurred by declining enrollment, the pandemic, job opportunities created during the labor shortage, and many other economic factors, the annual increase in college tuition actually declined for the second year in a row during the 2022-2023 school year.
However, during the 2010s, the average annual increase for public, 4-year colleges was 3.11%. If we assume that the last two years represent the exception, not the rule, this means that tuition for public, in-state colleges, which averaged $9,377 per student per year in 2022, could cost about $12,000 per student per year by 2030.
When you add in the average cost of room and board with projected growth rates into 2030, this average skyrockets to over $31,000 per student per year.
“At first glance it’s surprising that college tuition rates have remained lower compared to past years, especially with inflation continuing to rise,” comments higher education advisor Blanca Villagomez.
“However, I find it challenging to stay optimistic after considering the complex financial pressures impacting higher education. Some public institutions aren’t even allowed to increase their prices, which forces them to cut costs in other ways,” she continues.
“Another challenge is that enrollment has decreased across higher education which poses serious implications for the future of these institutions. And finally, public opinion of college is changing due to the already high price tag of colleges, and the burdensome loans many students are forced to take. I anticipate there being complex financial implications if colleges and universities can’t cover their own costs.”
Even with $15/Hour Minimum Wage, Students Would Need to Work Full-Time To Afford College
The idea of “working your way through school” is no longer a possibility for many students. Our study from 2021 found that students today, earning the federal minimum wage of $7.25 an hour, would have to work 28 hours per week in order to pay for a year of tuition.
This amount accounts only for tuition, not living expenses, and already exceeds the maximum recommended number of working hours for full-time students. By 2030, students making minimum wage would have to work an average of 40 hours per week to afford tuition and room and board, and this is assuming the federal minimum wage is raised to $15 per hour (it was last raised to $7.25 per hour in 2009).
“In an ideal world, balancing a full-time academic load with 12-15 work hours every week would be ideal for student success,” advises Villagomez. “The benefits? It allows students to dedicate the majority of their time to studying and completing their assignments.”
“Research recommends that students dedicate 2-3 study hours per credit,” she continues. “This means a full-time student (12 credits) should spend about 24-36 hours studying per week–and this number doesn’t even account for the time spent in class or more rigorous academic fields.”
“Essentially, college students are encouraged to treat their classes and study time as full-time jobs. However, the reality is very different. Right now affordability is a significant concern for many students, as the cost of tuition and living continues to rise, and loans become an inevitable loyal companion,” she explains.
“College students must make difficult decisions about their unique pressures and responsibilities. For some, working long hours is necessary even if it means impacting their academic wellness. Colleges and universities should remain proactive in finding ways to mitigate the financial stress of their students to ensure they are able to focus better in classes and be more engaged.”
See the charts below for a state-by-state comparison of the projected cost of tuition and housing by 2030 and how many weekly working hours this would require by both the current minimum wage and a potential minimum wage of $15 per hour.
Labor Shortage Opening Up Higher Earning Opportunities for Non-College-Educated Workers
Our study from January 2023 found that more than one-third of companies have eliminated college degree requirements in order to attract more applicants during the labor shortage.
In addition, we surveyed 1,000 non-college-educated, full-time employees in March 2023 and found that 64% say they ‘somewhat’ (43%) or ‘strongly’ (22%) agree that the ongoing labor shortage has opened up better job opportunities for them.
“There’s no denying that career pathways are being shaped by the labor shortage,” says Villagomez. “While the elimination of college degree requirements in certain companies can be great for some workers, I would advise any student to not act prematurely.”
“First, understand there are a variety of factors to consider in your decision such as your personal needs, life circumstances, and educational and career goals,” she continues. “I would encourage you to engage in a level of introspection to understand your values, motivations, and aspirations. Secondly, conduct thorough research on your career field of interest to assess the costs and benefits of pursuing a college education. Some careers may not need one, while others consider it a non-negotiable.”
There is no easy answer to the “Is college worth it?” debate. However, there’s also no doubt that people are fed up with the high cost of college and that economic circumstances have opened up greater opportunities for those without a college degree.
“If you are in the beginning stages where you don’t have much clarity, consider seeking support from a trusted mentor, teacher, or counselor,” says Villagomez. “They can offer guidance and insights into what your career trajectory can look like. And finally, understand the market shifts. Right now there are labor shortages but that will most likely change. You want to make a decision that will positively impact your career trajectory in the long run.”
The survey referenced in this article was commissioned by Intelligent.com and conducted online by the survey platform Pollfish on March 8, 2023. In total, 1,000 participants in the U.S. were surveyed. All participants had to pass through demographic filters to ensure they were age 26 or older, employed for wages, and had received no higher education than technical college.
The survey used a convenience sampling method, and to avoid bias from this component Pollfish employs Random Device Engagement (RDE) to ensure both random and organic surveying. Learn more about Pollfish’s survey methodology or contact [email protected] for more information.
Please note that this study has not been peer-reviewed and is meant as a discussion piece. Sources referenced in this article include CNBC, AEI.org, EducationData.org, and CollegiateParent.