The Shocking Increase Of College Tuition By State

Tyler Durden's picture

It is common knowledge that in the hierarchy of bubbles, not even the stock market comes close to the student loan bubble. If it isn't, one glance at the chart below which shows the exponential surge in Federal student debt starting just after the great financial crisis, should put the problem in its context.

And while we have previously reported that a shocking amount of the loan proceeds are used to fund anything but tuition payments, a major portion of the funding does manage to find itself to its intended recipient: paying the college tuition bill.

Which means that with student debt being so easily accessible anyone can use (and abuse), it gives colleges ample room to hike tuition as much as they see fit: after all students are merely a pass-through vehicle (even if one which for the most part represents non-dischargeable "collateral") designed to get funding from point A, the Federal Government to point B, the college treasury account.

It should thus come as no surprise that in a world in which colleges can hike tuition by any amount they choose, and promptly be paid courtesy of the federal government, and with endless amounts of propaganda whispering every day in the ears of impressionable potential students the only way they can get a well-paying job is to have a college diploma (see San Francisco Fed's latest paper confirming just this) there is no shortage of applicants willing to take on any amount of debt to make sure this cycle continues, that soaring tuition costs are one of the few items not even the BLS can hedonically adjust to appear disinflationary.

End result: tutitions have literally expoded across the country in both public and private colleges.

But while we know what the answer looks like at the Federal level, the question arises just how does this price shock look at the state level?

For the answer we go to the annual report by the Center on Budget and Policy Priorities, which periodically releases a report covering just this topic.

The answer, in a nutshell, is presented in the chart below which shows the state by state, inflation-adjusted breakdown how much the average tutition has changed in the period between 2008 and 2014.

Our condolences to students in Arizona, who have seen a near doubling of their college tuition in just 5 short years.

In fact our condolences to students in the six states where tuition have risen by more than 60%, in the ten states where it has increased by more than 40%, and in the 29, or more than half of all states, where college tuitions have risen by more than 10 times the Fed's inflation target of 2% per year.

Some of the other findings in the report:

  • Since the 2007-08 school year, average annual published tuition has risen by $1,936 nationally, or 28 percent, above the rate of inflation (in non-inflation-adjusted terms, average tuition is up $2,702).
  • In Arizona, the state with the greatest tuition increases since the recession, tuition has risen 80.6 percent or $4,493 per student after inflation.

But in addition to the "supply-side" easy credit that enables college Treasurers to demand whatever cost they want, is there any other reason for this relentless price increase? As it turns out the answers is year, and it goes back to the infamous Meredith Whitney prediction that across the US, various municipalities and states are insolvent. Because as it turns out, the main reason why so many state colleges have, at least according to the CBPP, boosted costs is to make up for the near complete collapse in state funding to higher education.

This is how the CBPP report frames the issue:

Deep state funding cuts have major consequences for public colleges and universities. States (and to a lesser extent localities) provide 53 percent of the revenue that can be used to support instruction at these schools.3 When this funding is cut, colleges and universities generally must either cut educational or other services, raise tuition to cover the gap, or both.

Indeed, since the recession, higher education institutions have:

  • Increased tuition. Public colleges and universities across the country have increased tuition to compensate for declining state funding and rising costs. Annual published tuition at four-year public colleges has risen by $1,936, or 28 percent, since the 2007-08 school year, after adjusting for inflation.4 In Arizona, published tuition at four-year schools is up more than 80 percent, while in two other states — Florida and Georgia — published tuition is up more than 66 percent.
  • These sharp increases in tuition have accelerated longer-term trends of reducing college affordability and shifting costs from states to students. Over the last 20 years, the price of attending a four-year public college or university has grown significantly faster than the median income.5 Federal student aid and tax credits have risen, but on average they have fallen short of covering the tuition increases.
  • Cut spending, often in ways that may diminish access and quality and jeopardize outcomes. Tuition increases have compensated for only part of the revenue loss resulting from state funding cuts. Public colleges and universities have cut faculty positions, eliminated course offerings, closed campuses, shut computer labs, and reduced library services, among other cuts. For example, since 2008, the University of North Carolina at Chapel Hill has eliminated 493 positions, cut 16,000 course seats, increased class sizes, cut its centrally supported computer labs from seven to three, and eliminated two distance education centers.

A large and growing share of future jobs will require college-educated workers.7 Sufficient funding for higher education to keep tuition affordable and quality high at public colleges and universities, and to provide financial aid to those students who need it most, would help states to develop the skilled and diverse workforce they will need to compete for these jobs.

Such funding is unlikely to occur, however, unless policymakers make sound tax and budget decisions in the coming years. While some states are experiencing greater-than-anticipated revenue growth due to an economy that is slowly returning to normal, state tax revenues are barely above pre-recession levels, after adjusting for inflation.8 To bring higher education back to pre-recession levels, many states may need to supplement that revenue growth with new revenue to fully make up for years of severe cuts.

But just as states have an opportunity to reinvest, lawmakers in many states are jeopardizing it by entertaining tax cuts their states and citizens can ill-afford. For example, Florida - where higher education funding is 30 percent below 2007 levels and tuition at four-year schools is 66 percent higher - is cutting taxes by $400 million in the current 2014 legislative session. Other states are also considering damaging changes to their tax codes that would make it very difficult to reinvest in higher education.

* * *

In other words, to mask their insolvency, funding for colleges has been the first outlay that states across the US were forced to trim: and the more insolvent any given state, the greater the offset that was passed through to any given state's colleges.

This is indeed confirmed by the chart below, which shows the change in state spending per student over the same time period.

And this is where students, and their massive debt loads have come in. Because as it turns out, instead of having the state fund itself and be able to return college funding to pre-crisis levels, that responsibility is now offloaded to the student.

From the report:

During and immediately following recessions, state and local funding for higher education has tended to plummet, while tuition has tended to spike. During periods of economic growth, funding has tended to largely recover while tuition stabilizes at a higher level as share of total higher educational funding.


This trend has meant that over time students have assumed much greater responsibility for paying for public higher education. In 1988, public colleges and universities received 3.2 times as much in revenue from state and local governments as they did from students. They now receive about 1.1 times as much from states and localities as from students.



Nearly every state has shifted costs to students over the last 25 years — with the most drastic shift occurring since the onset of the recession. In 1988, average tuition amounts were larger than per-student state expenditures in only two states, New Hampshire and Vermont. By 2008, that number had grown to ten states. Today, tuition revenue now outweighs government funding for higher education in 23 states with six states — New Hampshire, Vermont, Delaware, Colorado, Rhode Island, Michigan, and Pennsylvania — asking students and families to shoulder higher education costs by a ratio of at least 2-to-1.

The bottom line is that in order to perpetuate the myth of state solvency, the obligation to provide the funding needed for any one student's education has been transferred from the state itself to the student.

Is this a "fair" cost-shifting arrangement?

It depends on the perspective of the payor, and of course, the obligor. As Janet Yellen herself pointed out today, the fact that students are being saddled with record amounts of debt is regarded by the Fed as of the primary reason why the housing recovery has not materialized, and why household formation has collapsed and is far below historical (and expected) levels (and has indirectly led to such aberrations as the US "renter nation", and Wall Street firms such as Blackstone becoming the largest landlord in the US).

Some of the other side effects of this perverse funding shift, from the CPBB:

Rapidly rising tuition at a time of weak or declining income growth has a number of damaging consequences for families, students, and the national economy.


Students are taking on more debt. Student debt levels have swelled since the start of the recession. Collectively, across all institutional sectors, students held $1.08 trillion in student debt — eclipsing both car loans and credit card debt — by the fourth quarter of 2013. Between the 2007-08 and the 2011-12 school years, the median amount of debt incurred by the average bachelor’s degree recipient with loans at a public four-year institution grew from $11,900 to $14,300 (in 2012 dollars), an inflation-adjusted increase of $2,400, or 20 percent. The average level of debt incurred had grown from $11,200 to $11,900, an increase of about 6.3 percent, over the previous eight years.


Tuition costs are deterring some students from enrolling in college. While the recession encouraged many students to enroll in higher education, the large tuition increases of the past few years may have prevented further enrollment gains. Rapidly rising tuition makes it less likely that students will attend college. Research has consistently found that college price increases result in declining enrollment.35 While many universities and the federal government provide financial aid to help students bear the price, research suggests that both the advertised tuition cost and the actual price net of aid affect whether students go to college; in other words, a high sticker price can dissuade students from enrolling even if the net price doesn’t rise.


Tuition increases are likely deterring low-income students, in particular, from enrolling. Research further suggests that college cost increases have the biggest impact on students from low-income families. For example, a 1995 study by Harvard University researcher Thomas Kane concluded that states that had the largest tuition increases during the 1980’s and early 1990’s “saw the greatest widening of the gaps in enrollment between high- and low-income youth.


Tuition increases may be pushing lower-income students toward less-selective institutions, reducing their future earnings. Perhaps just as important as a student’s decision to enroll in higher education is the choice of which college to attend. Even here, research indicates financial constraints and concerns about cost push lower-income students to narrow their list of potential schools and ultimately enroll in less-selective institutions. In a 2013 study, economists Eleanor Dillon and Jeffrey Smith found evidence that some high-achieving low-income students are more likely to “undermatch” in their college choice in part due to financial constraints

There are many more unintended consequences of this cost shift, all of which are succinctly explained in the full study which can be found here: States Are Still Funding Higher Education Below Pre-Recession Levels.

But while questions of fairness are largely meaningless in the New Normal, especially once the Obama administration is done with them, one thing is certain: this arrangement is completely unsustainable.

It goes without saying that anything that is unsustainable eventually ends.

In the meantime the biggest loser is... you, dear students.

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A Nanny Moose's picture

Arizona? Degrees in binge drinking?

Arius's picture

they got money in Arizona ... otherwise the prices would be down

CH1's picture

Why insane increases?

Because they can!

The authorized ones have the magic pieces of paper. The suckers believe they control their destiny.

So, the suckers will do anything to get the magic paper.

Save for 20 years? No problem.

Take unpayable (or dischargeable) loans? Certainly.

Mortgage their souls? Of course!

Redneck Hippy's picture

I can tell you from personal experience, the price rise has nothing to do with the salaries of professors.

Alberich's picture

If anything, spending on faculty is down as part-timers take over from full-timers, especially at the lower end of the market.

Beam Me Up Scotty's picture

Professors teach less, and are paid more. Thank god for TA's. They sure as he'll aren't making minimum wage. I bet the average college prof is in the top "20%" of wage earners easily. And don't come with this " I only make $50k per year" baloney. Include all of your earnings, your fat pension and healthcare benefits. And every other hidden perk you get, that you don't include in your salary.

James_Cole's picture

The important thing about post secondary education in the US is that it's for the rich only. Not rich enough for college? Good news! The world still needs ditch diggers. 

Or move to Germany, still have near-free post secondary ed. 

SafelyGraze's picture

this article overlooks the other factors driving up tuitions

- administrators now outnumber tenured faculty, and draw higher salaries

- those salaries are based, in part, on "overhead" generated by federal grants and contracts (a 50% tax levied by the university on the work performed)

- universities are competing with each other to build the newest and shiniest dorms and recreation centers and dining halls and aquatic centers and golf courses, incurring hundreds of millions or billions in debt

- that debt rivals the amount of student loan debt, but is not included in any of these discussions or aggregate measures


MiguelitoRaton's picture

Largest increases: (1) warm weather, (2) loose acceptance crieteria, (3)...parties!

Gaius Frakkin' Baltar's picture

College isn't about education. If an inquiring mind wants to know anything they may consult the Internet free of charge. College is just another obsolete institution which hasn't been cleared from the system thanks to socialist policies.

BTW, if the states can find a way to pay 13 years of propaganda for every student, what the hell is 4 more years?

Quus Ant's picture

It's the end of the world as we knew it.  And I feel surprisingly alright.

SumTing Wong's picture

I can tell you from personal experience that the money is NOT being spent on new laboratory facilities, not on professors, and not on things that will educate students. Instead, the football team got a new stadium and new uniforms, the dorms now have a Subway and a frozen yogurt place, the gym has all new nautilus equipment, and they planted more flowers. We live in an entertainment society, so colleges are pandering to what it takes to bring in more students. 

Never One Roach's picture

But, yeah, like, ya's money well spent, Dude:


Results In short, the tests showed U.S. fourth-graders performing poorly, middle school students worse, and high school students are unable to compete. By the same criteria used to say we were "average" in elementary school, "we appear to be "near the bottom" at the high school level. People have a tendency to think this picture is  bleak but it doesn't apply to their own school. Chances are, even if your school compares well in SAT scores, it will still be a lightweight on an international scale.

IndyPat's picture

That's simply not fair.
It also completely ignores the gains made in student self esteem.

Big fuckin /s

sethstorm's picture

Only if you don't actually control for admissions criteria, which PISA and TIMSS do not do.


ghostfaceinvestah's picture

Did you hear the Q&A with Yellen today?  Some Senator asked her what advice she would give to the parent of a 3 year old today, in regards to ensuring future economic success.  She said "make sure they get a college education, because the numbers show the salary difference between college grads and high school grads is huge" (I am paraphrasing of course).

Typical stupid Fed thinking.  So, at the limit Janet, what if everyone was a college grad (or even a large percentage of people were)?  We would get what we have today - college grads working as baristas at Starbucks.

How about advice like "find something you love and become the best you can at it" (I think Steve Jobs may have said something similar once)?  Or even "never live beyond your means"? 

But no, of course the Fed is going to promote a path that almost always requires taking on unsustainable debt.

monkeyshine's picture

That's right. And if you want the experience of university life to "mature" and "grow experientially", you won't get into student housing but almost every major university has plenty of private housing nearby. Move into one that caters to students. Maybe even take a student roomate and get a part time job to pay the rent. Then get the course guide, find the courses you like, and go sit in. You likely won't get into the senior level courses because those are usually small and the prof will notice you are not enrolled. (but hey, its hard to imagine a prof kicking someone who is serious out of class if you were honest and forthright). But some of the large courses for freshman and sophs have 500-1000 students. They don't take attendance. Sit in and listen to the lectures. Get the handouts.  Download the course material. Also, eat in the university cafeterias. Meet people on campus. Go to parties. You will get the "socializing" and in fact you will mature faster because you have to work at it.  *(afterthought, I wonder if the campuses are harder to get onto nowadays?  As of a few years ago they were pretty wide open during the daytime. )

I am not the typical employer, but I'd rather hire someone with 4 years of experience than a brand new BA degree. 

daveO's picture

The internet has made the first 13 yrs obsolete, too. 

sun tzu's picture

Only for those willing to use it to learn instead of posting stupid pictures and videos on facebook, twitter or other stupid social media or watch porn all day. 

TV could have been used for education too, but it's mostly used for mindless entertainment.

mccvilb's picture

I-i-i-i-t-t-t-s-s TIME-E-E! For NFL Draft Night! This is why we go to college - to mold and shape concussed minds for the future.

Agstacker's picture

Or move to North Dakota, the school fund money from the Bakken is doing quite well.

sun tzu's picture

Free college? That's nice of the faculty and administrators to work for free. Do the buildings sprout up from the ground by themselves?

It's strange how I was able to get a graduate degree as one of 5 children raised by a single mother. I didn't know we were rich living in that run down 3 bedroom apartment.

ACP's picture

Just looked up one of my professors, who is now head of her department, on this state salary website:

Went from $160k as a tenured professor to $240k as department head. So, if anyone thinks salaries aren't the problem, um, yeah, they are.

James_Cole's picture

A little bit..

In the past decade, the number of administrative employees jumped 54 percent, almost eight times the growth of tenured and tenure-track faculty.

U.S. universities employed more than 230,000 administrators in 2009, up 60 percent from 1993, or 10 times the rate of growth of the tenured faculty

^ there's your hockey stick

Beam Me Up Scotty's picture

And so, no one can figure this out and fix it?  Everyone who produces NOTHING thinks their job is the most important one on the planet and we can't live without it.  But 20 years ago, we did just fine, with 60% less administrators.  How did we EVER manage?

Stuck on Zero's picture

You need administrators to comply with all the requirements of the other administrators.  Students and professors are not needed in this equation.


natty light's picture

My high school physics teacher had a sign in his lab classroom that said:

Dept. of Redundancy Dept.

ghostfaceinvestah's picture

Nothing a crisis won't fix.  If these bloated institutions faced a decline in enrollments, you bet your ass they would start axing those administrators in droves.

Beam Me Up Scotty's picture

Exactly.  And how much time is she really in the classroom anymore?  Instead you get some hard to understand person from a foreign country filling in.  Pathetic!!

ACP's picture

Just for shits and giggles, I was looking up another professor, and I got this interesting result for the same name (name left out):

CSU Fresno Librarian $93.4k
Beam Me Up Scotty's picture

ACP, this tells me the whole "if you and your spouse make $250k per year you are in the top 1%" meme is yet another lie!  All kinds of people make well over 100k per year, yet they lie to everyone and make them feel like the are in the top 10% or the top 1% when they are probably really no better off than the top 50%.  More lies and propaganda to make you feel sorry for someone else and submit to higher taxation.

ACP's picture

Yeah, pretty much.


You wanna get really pissed off now?

Check out this motherfucker, I'll leave his name in because it's listed on the welcome page in the "TOP 10 HIGHEST PAID" list:

How the fucking fuckity fuck does your salary go from $18.5k in 2011 to $76k in 2012 to $536k in 2013?

WHAT THE FUCK??????????????


Edit: Here's another beaut: Correction and Rehabilitation   Parole Agent III Adult Parole   $259k

James_Cole's picture

ACP, apparently by getting fired from your job:

A state appeals board has ordered reinstatement of eight correctional officers who were fired from Salinas Valley State Prison in the wake of revelations about a rogue gang of guards known as the Green Wall.

Ordered reinstated with back pay were guards James Benefield, Fernando Chavez, Christopher Corotan, Walter Faulkner, Derrick Mackinga and Kevin Rawhoof.

The group was exposed in 2001 by former correctional officer D.J. Vodicka, who was targeted for his role as a whistleblower and later testified before the senate committee.

"This is just an absolute travesty. This sends a clear message" to both honest and dishonest correctional officers, said Caden, now a Sacramento-area attorney. "If you commit a crime under the color of authority and stick together and keep your mouths shut, no one can do anything."

seek's picture

This is really state-dependent. Each state has unique reasons for their problems.

For most, it's cuts in funding. In states like AZ, it's due to lower tax revenue. A month ago when we were discussing Michigan's fucked up tuition, it turned out that the funding cuts were from funds being redirected to teacher pension funds. I'm sure in other states it's out of control construction costs, or administration costs. And a few, professor's salaries, but I doubt that's much compared to administator's numbers or salaries.

sun tzu's picture

Average salary for a tenured professor is $99K. They probably work 20 hours a week if that much.

johnconnor's picture

it has to do with the price of football coaches... how much were football coaches making 20 years ago vs now CPI adjusted? they are millionaires now and they are public employees!

Babaloo's picture

They're public employees in name only.

They get paid out of ticket and tv revenues, shoe contracts, alumni funds, etc. your tax money doesn't go to pay football coaches.

Never One Roach's picture

Texas to pay $9.375 million for Charlie Strong in 2014


The University of Texas' new football coach, Charlie Strong, will be paid $5 million for the 2014 season and the university will pay Strong's $4.375 million buyout to Louisville, according to financial terms approved Monday by the university system's board of regents.


Holy Shit!



sun tzu's picture

Yeah but the UT Longhorns football team brought in net income of $109 million for the university in 2013. Big time football and basketball programs bring in lots of revenue for the colleges and some are more profitable than pro teams. I'm not defending the coach's salaries, but it's misleading to imply that tuition is going up because of football and basketball programs. 

Monty Burns's picture

the price rise has nothing to do with the salaries of professors.


Maybe not.  But someone has to pay for all those Diversity Managers.

sun tzu's picture

Not to mention all of those ethnic and gender studies programs that load the suckers up on debt with no job prospects. What employer in their right mind would want to hire a bitter employee with a chip on his/her shoulder that will sue over the drop of a hat?

TruthInSunshine's picture

When MAYBE 1/2 of students will pay their loans back, either partially or at all, to quote Billary, "[w]hat difference does it make??!!!"

Stuffing the eCONomy with subprime Auto Loans & College Loan Debt
(a full 1/3 of which is currently in default or otherwise not paying/performing), bitchez! It's the NEW NORMAL IN TIMES OF BROKEN MARKETS THANKS TO INSANE CENTRAL BANK MONETARY POLICY.


May 6, 2014, 7:43 PM

Americans seek relief from student loan debt

"Student loans have become an economic albatross that has many Americans begging for relief...

In the past 10 years, student debt has tripled in the United States, from $364 billion to more than $1.2 trillion. That's more than Americans owe on credit cards or auto lines...

...Thirty percent of federal student loans are in default, forbearance or deferment." (THAT IS 1 IN 3, FOR THOSE KEEPING SCORE AT HOME).

*Bonus material:


April 10, 2014
Financial Times


"Although many asset managers said during the financial crisis that they would never touch subprime again, subprime lending has made a return in auto lending. Data show that outstanding car loans rose 25 percent in the past three years, and car loans continue to rise even as outstanding loans on credit cards hover near 10-year lows. Moreover, subprime loans now represent about a third of all new car loans, up from nearly one-tenth five years ago, and one-tenth of new loans are "deep subprime," given to consumers who previously would have had little chance of getting financed.

Observers attribute the return of subprime lending in the auto industry to asset managers DESPERATE TO GENERATE RETURNS IN THE ULTRA-LOW INTEREST RATE ENVIRONMENT ..."



Beam Me Up Scotty's picture

Funny thing is, no one ever asks why tuition is going up at 10x the rate of inflation. They only ask why there aren't more government handouts.

If your local gas station was charging $40 per gallon, and that was the only place you could buy it, you would sure be asking questions!

Vampyroteuthis infernalis's picture

At one time I was a fan of student loan relief. The more I think about it, hell no! Why should we bail out someone who played around for 4 years, learned nothing while getting a lesbian studies degree? Full of nothing buy Marxist indoctrination.

DoChenRollingBearing's picture

+ 1 I have to agree.  Now if you want to go college, you better damn well study something worthwhile...

sun tzu's picture

but it's a basic human right for them to fuck around for 4-6 years on your dime

rbg81's picture

Concur 100%.  This is nothing but a subsidy for moonbat liberal professors.

RafterManFMJ's picture

Only imbesiles go to collage.