College Tuition Hikes Are Back. Is Inflation to Blame?

• Inflation and budget shortfalls are forcing many institutions to raise tuition and fees.
• CARES Act relief funds had provided students a reprieve from rising costs during the COVID-19 pandemic.
• Politicians are legislating, innovating, and posturing to keep college costs down.

U.S. inflation is surging at the fastest pace in 40 years, and students are paying for it as food, energy, and housing prices rise. Many students will also soon face higher tuition costs as schools reconcile inflation and budget shortfalls.

The Consumer Price Index for All Urban Consumers rose 7.5% in 12 months, the Bureau of Labor Statistics reported on Feb. 10. Food, energy, and housing costs increased the fastest: food prices are up 7.0%, gasoline prices are up 40%, and housing costs are up 4.4%.

Those price increases aren't just taking a bite out of student budgets; they're also straining institutional budgets. Schools are reacting by hiking tuition and the cost of meal plans. They are also looking to their respective state elected officials to pass budget increases.

The price of college has long been increasing. However, this most recent uptick in the cost of higher education may be jarring for many students because the COVID-19 pandemic had provided learners and their families a reprieve from rising costs.

"Federal funds have helped shore up some balance sheets"

— Richard J. Michal, vice president and chief facilities officer at the Purdue Research Foundation at Purdue University

The cost of college had outpaced inflation for decades until the COVID-19 pandemic, a Bloomberg analysis of Bureau of Labor Statistics data shows. But according to the College Board, that changed in 2020 and 2021 when some colleges froze tuition and fee increases or increased costs by much smaller amounts. Before adjusting for inflation, the cost for in-state students at public four-year schools increased 1.6% during the 2021-2022 academic year, while the cost for private, nonprofit four-year schools increased 2.1%.

The CARES Act — the federal law that provided $40 billion in relief funds — kept college costs in check during the pandemic. At least 80 colleges and universities were able to freeze tuition during the pandemic because of this support, Richard J. Michal, vice president and chief facilities officer at the Purdue Research Foundation at Purdue University, told BestColleges.

"Federal funds have helped shore up some balance sheets," explained Michal, who is researching tuition freezes for his doctoral dissertation.

In January, the Biden administration pledged $198 million in COVID-19 relief funding to colleges and universities in 2022. However, much of those dollars will bypass institutions and go directly to financial aid grants for students.

Large research universities tend to fare better during periods of high inflation because they have multiple revenue streams, Michal noted, which is hopeful news for students at those institutions. But it's different for tuition-dependent schools, which struggle to control tuition and fees during high inflation times.

"The best way [for institutions] to survive inflation is to be financially healthy going into it," Michal said.

These Schools Are Raising Tuition and Fees

With inflation rampant and federal funding running thin, the list of schools raising tuition and fees in 2022-2023 is long and could become longer.

Virginia Tech already increased meal plan costs by $100-215 (depending on the individual plan) for the current spring semester, citing "workforce shortage issues, which the university addressed with a market alignment for rates of pay necessary to attract and retain" workers.

Brown University undergraduate costs will increase 2.85% for the 2022-2023 academic year, matching the university's lowest increase in 11 years.

Carnegie Mellon University has announced a 4% increase in tuition for the 2022-2023 academic year

Tuition at Lafayette College in Pennsylvania will go up 4% next year.

Nonresident students attending the University of North Carolina at Wilmington will see their tuition go up 3%. For all students, housing rates will increase 3.5%, and meal plans, 5.1%.

Texas Christian University will raise tuition by 4.5% beginning with the fall 2022 semester.

The University of Virginia plans to increase undergraduate tuition and fees by 4.7% during the 2022-2023 academic year and an additional 3.7% for 2023-2024.

Politicians Try to Keep College Affordable

Politicians are legislating, innovating, and posturing to keep college costs in check.

This month, New Mexico passed a sweeping $75 million tuition-free college program championed by Gov. Lujan Grisham. The New Mexico Opportunity Scholarship Act expands the state's existing college tuition fund to all students seeking any degree type at in-state public or Tribal colleges and universities. According to Grisham, up to 35,000 New Mexicans will be able to go to college for free starting this fall.

In California, Gov. Gavin Newsom's 2022-2023 fiscal year budget would provide the University of California and California State University systems with a 5% base general fund increase for five straight years. In exchange, schools would commit to expanding access, equity, affordability, and training for state workforce needs. It also proposes $1.6 billion for California's 116 community colleges, linking funding to increasing the number of students transferring into UC and CSU schools. Within weeks of Newsom announcing the proposed budget, the California State University system announced it would not raise tuition next year.

Politicians in other states are keeping it simple and tying modest increases in state funding for higher education to tuition freezes. Kansas Gov. Laura Kelly's 2022-2023 fiscal year budget promises to restore postsecondary education funding to pre-Great Recession levels and freezes tuition at four-year institutions. South Carolina Gov. Henry McMaster's 2022-2023 fiscal year budget ties a 2.7% increase in higher education funding to commitments to no in-state tuition or mandatory fee increases.

"[Tuition freezes are] a great thing to do. But based on my research, they're really challenging to do."

— Richard J. Michal, vice president and chief facilities officer at the Purdue Research Foundation at Purdue University

Not all states are increasing funding for higher ed, though, and their students may pay the price. In Florida, the 2022-2023 fiscal year budget proposed by Gov. Ron DeSantis slashes $100 million from state universities and colleges; it allocates $1.3 billion for state colleges and $2.7 billion for state universities.

Rumors that Florida's state schools might address budget shortfalls by raising tuition for the first time in nearly a decade received a swift rebuke from Sen. Rick Scott, former governor of the state.

"Reports that universities in Florida and across America are considering tuition increases are shocking and infuriating," Scott said in a Feb. 8 statement. "I now challenge every college and university in Florida to publicly pledge to not raise tuition and fees."

Typically, tuition freezes at public institutions only apply to in-state students, Michal told BestColleges. To make ends meet, these public institutions often boost tuition costs for international and out-of-state students, he said.

"[Tuition freezes are] a great thing to do," Michal said. "But based on my research, they're really challenging to do."