OBERLIN, OH – Student debt is one of the most crippling expenses for young Americans. Student debt has recently reached a staggering $1.4 trillion U.S dollars, surpassing credit card debt.
Recent tuition hikes have increased the financial burden on students and their families over the last decade. However, many will be relieved to know the United States Department of Labor reports that tuition hikes have been slowing consistently and are now matching the rate of inflation. It is predicted they will continue to decrease over the next few years.
Since March of 2017, tuition increases have risen by the smallest rate since 2007. One explanation for this welcomed decrease is the diminishing population of college-bound students. The number of 18-24 year olds in America is predicted to steadily decrease through 2021. Additionally, the overall rate of college enrollment has declined. In a 4 year span between 2014 and 2010, the rate of enrollment has dropped by 4% according to the College Board. This trend is expected to continue.
Colleges are pulling from a smaller pool of students. Consequently competition between the colleges has been increasing, forcing them to offer more affordable rates. Although the increases in competition may alleviate some of the financial load on students, it may put a substantial strain on small colleges.
Smaller and often lesser known colleges are struggling to keep up with large scale universities in the increasingly competitive market which is mostly controlled by a select group of universities. Analysis by Moody’s Analytics records that the top 20 private universities have 70% of the total wealth in the private college sector. Moody’s further reports that 1/3 of small private schools are operating at a deficit as of 2016. Moody’s also predicts the number of small college closures will triple between 2015 and 2018.
Ultimately, small and lesser-known colleges may become extinct. Decreases in tuition hikes make a college education slightly more affordable for the everyday American. However, the student may have an increasingly limited pool from which to select their school.