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Key Takeaways
- Attending college a half century ago was expensive, but it was affordable compared to the cost of tuition in 2024-2025.
- Between the 1974-1975 and 2024-2025 school years, the cost of tuition at public colleges rose by over 355%.
- Economic conditions, rising operating costs, higher fees, and increased housing costs are pushing the cost of college even higher.
- Many are questioning whether a college degree is worth the price.
- Others are attending college but delaying other milestones, like getting married and buying a house.
With the cost of the average four-year public college exceeding tens of thousands of dollars and the average private institution costing thousands more, college is becoming too expensive for many students.
If we compare today’s costs to what you would have spent about fifty years ago, in the 1974-1975 school year, you would have gotten a better deal back then, even adjusting for inflation.
College Costs: Then and Now
The cost of college increased dramatically between the 1974-1975 and 2024-2025 school years. The table below highlights costs for tuition and fees for full-time undergraduate students at public colleges. The figure in parentheses is the cost in September 2024 dollars, calculated using the CPI Inflation Calculator from the Bureau of Labor Statistics (BLS):
| 1974-1975 | 2024-2025 | |
|---|---|---|
| 4-Year Institutions | $1,008 ($6,281) | $28,580* |
| 2-Year Institutions | $328 ($2,044) | $4,050 |
Using 2024 dollars, tuition and fees for public colleges have increased by over 355% since the 1974-1975 school year.
To put this into perspective, the money used to fund the tuition and fees for four-year institutions in the 1974-1975 school year in 2024 dollars could have bought you a family vacation or a used car. Or you could have used it to contribute to your annual individual retirement account (IRA).
Meanwhile, you could have used the average cost of tuition and fees for the 2024-2025 year to buy a subcompact SUV.
College Affordability: Tuition vs. Family Income
College was much more affordable in 1974, especially when considering how much people earned at the time. The median household income in 1974 was $11,100. When adjusted for inflation, that’s $69,167 in 2024 dollars.
To put it another way, for the median taxpayer, the cost of college in 1974 represented a smaller percentage of your annual income compared to 2024.
In 1974, for the median taxpayer, the cost of a four-year degree ($1,008) represented just 9% of their annual income ($11,100) and just 3% of their annual income for a two-year degree ($328).
In 2024, the median income was $83,730. So for the median taxpayer, the cost of higher education was about a 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 median income buy in 1974 compared to 2024? Here’s a side-by-side comparison of the cost of some goods and services.
| 1974 | 2024 | |
|---|---|---|
| New home | $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 College Costs Are Rising
Several factors have led to the spike in tuition costs, including:
- Economic conditions, which have eroded endowments
- A rise in operating costs for schools
- The higher cost of newer amenities and campus experiences
- Higher supplemental fees
- Increased housing costs
- A drop in state funding for public universities
- Rising demand for graduates from post-secondary institutions in the workforce
Important
The increase in college administrative staff across all institutions has also contributed to higher tuition prices. Hiring for these positions has outpaced that of faculty positions.
The Consequences of Higher College Costs
The financial consequences of going to college were significant in the 1974-1975 school year. However, when compared to modern times, the goals of having a family and owning a home weren’t out of reach.
Tuition was much more affordable in 1974, which is why financial aid wasn’t used as a primary funding source for college. As many as 1.6 million out of the 8.8 million students enrolled (18%) received some sort of financial aid in the 1974-1975 school year. Recipients of Pell Grants were able to use them to cover 75% of their tuition costs at four-year schools, compared to 28% of total costs today.
Student loans are commonly used as the primary source of funding for a college education today. Roughly 40% of students pursuing post-secondary education take out student loans, with the average debt hitting $38,883. Total student loan debt reached $1.78 trillion as of the fourth quarter of 2024.
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