The opinions expressed here are strictly those of the writer and do not reflect the views of University School of Nashville or the Peabody Press.
In 1980, Vanderbilt’s tuition was approximately $5,000 a year. Today, Vanderbilt’s tuition sits at $67,934.
Including room and board, meal plans, and other mandatory fees, the total cost of attendance at Vanderbilt University approaches nearly $95,000 annually, a price shared by several of Vanderbilt’s peer schools, including the University of Chicago, Duke, Rice, Emory, and Washington University in St. Louis. Recent data from VisualCapitalist.com suggests that the average tuition and fees of colleges and universities has increased by nearly 1200% since 1980.
One of the largest drivers of college tuition prices has been the explosion of university administration costs. Between 1993 and 2007, the number of full-time administrators at America’s top universities grew by 39%, while the number of employees engaged in teaching, research, and service grew by just 9.8%. Data on university spending reinforces this pattern. Administrative spending at U.S. public universities increased by 6.3% between 2016 and 2021, while instructional spending fell by 4.7% over the same period.
One of the main causes for the continuous surge in university tuition is the lack of accountability enforcement from regulating bodies or competitive market dynamics. In most industries, companies that raise prices too aggressively lose customers. Airlines, for example, compete intensely on ticket prices. If Delta were to significantly increase fares on a major route, consumers would just shift to Southwest or United. As a result, businesses are often pressured by their competitors to keep their products as affordable as possible while maintaining high quality to increase customer retainment. Moreover, company shareholders and executives often pressure corporations to eliminate excess bureaucracy to increase profits.
On the other hand, college administrations are not incentivized to keep overhead down. In fact, raising tuition to cover administrative “bloat” can actually result in a college being perceived as a more prestigious and desirable institution. There is unfortunately no market mechanism correcting this, as families will often go to great financial lengths to afford America’s most elite universities. However, it is worth acknowledging that federal mandates such as Title IX and disability accommodations under the ADA have forced universities to hire more administrative positions such as compliance officers and investigators. But even beyond these necessary measures, administrative growth has extended far beyond previous levels.
Along with administrative expansion is an amenities arms race. Many colleges have begun investing heavily in new buildings and facilities to attract students, including luxury dorms, recreation centers, and fancy dining halls. As a result, students and parents are not just paying for their education with tuition checks, but they are subsidizing construction debt and infrastructure designed to help yield full-paying applicants.
Still, for many low-income students, elite universities with massive endowments can actually be affordable. For example, Harvard’s endowment is now $56.9 billion, Princeton’s sits at $36.4 billion, and Yale’s is $44.1 billion. All of these schools cover the entirety of tuition for families earning under $200,000, with Harvard and Yale even offering $2,000 start-up grants for qualifying students (designed to help pay for winter clothing, travel to campus, dorm essentials, and other essential costs related to starting college) along with offering full-ride need based financial aid.
Yet outside of the absolute richest colleges in America, most institutions lack the endowment resources to make these generous commitments, compelling them to rely more heavily on tuition revenue to sustain operations.
However, families earning between $250,000 and $500,000 a year may earn too much to qualify for substantial need-based aid but not enough to comfortably afford the $95,000 total cost of attendance many elite private universities in America charge, especially when expecting to pay for multiple children’s college expenses. Unfortunately, many need-based financial aid systems ignore the struggles of middle-class and upper-middle class families, while also overestimating the amount of money parents are willing to pay for their child’s education.
The most commonly used system that determines a student’s financial aid is the Free Application for Federal Student Aid’s (FAFSA) Student Aid Index (SAI), which used to be known as the Expected Family Contribution. This formula estimates what a family can afford to pay for college based on income, certain assets, and household size.But many families find the result is not an accurate representation of what they can realistically pay. For instance, a family earning $250,000 pre-tax may be expected to contribute $40,000 to $50,000 per year, even if they are paying a similar price for several children, a cost that could represent a substantial portion of their post-tax income and does not account for critical expenses like mortgage payments, retirement savings, and healthcare. While the FAFSA SAI formula considers household size, recent changes have substantially reduced the adjustment for having multiple children enrolled in college at the same time.
Many private colleges further utilize the College Scholarship Service (CSS) profile, a supplementary financial aid application administered by the College Board that allows institutions to calculate their own institutional aid more comprehensively than FAFSA alone. Unlike FAFSA, the CSS Profile considers additional factors such as home equity, retirement accounts, small business value, and non-custodial parent income. As a result, a family with $300,000 in home equity can have their aid eligibility drop sharply, even if that equity is not liquid.
An even more critical legal reality is that even if a student’s parents have no intention of helping pay for their college expenses, which they legally have no obligation to do, the student is still considered a dependent and their parents’ income and assets are used to determine their financial need. Although no law requires parents to contribute to their children’s university tuition, America’s entire financial aid system is based on the assumption that parents will pay regardless, and students whose parents cannot or will not meet the expectation set by these aid formulas are often left to take on burdensome private loans, work excessive hours, or forgo college enrollment altogether.
According to research from the College Board, in 2023-2024, about 47% percent of bachelor’s degree recipients from four year public and private non-profit colleges graduated with debt, and the average debt level among borrowers was $29,560. These numbers demonstrate the reality that tuition prices for colleges have climbed significantly higher than what most families can afford. Our financial aid system and ability to regulate colleges from raising tuition prices is not working for the American people.
The solution to the college unaffordability crisis is not to freeze tuition that is already nearly $70,000 or forgive loans from those who borrowed rather than paid outrageous out-of-pocket costs upfront. We must confront the central cause of unnecessary spending on facilities and administrative expansion that increase costs. We must build a financial aid system that more honestly determines family contributions rather than making assumptions that harm students and benefit the endowments of America’s richest universities.
