Editor’s note: The cost of college—its historic rise and how to navigate current expenses—is intertwined with the issue of student loan debt. This page focuses on understanding the costs of (and how to pay for) higher education; see our resources on student debt here. Background Since the middle of the 20th century, higher education has been viewed as a steppingstone to well-paying professional careers for millions of Americans. Earning a degree has become a viable path to upper-class prosperity for many, in particular first-generation college students. But, it can be costly. As of 2025, annual tuition alone ranges from around $10K for an in-state, four-year public university to almost $40K for private institutions. The total price tag—when including living expenses, fees, and other costs—for a bachelor’s degree in the US can now exceed $100K for public institutions, requiring the majority of students to secure financing to cover the cost of education. History In 1950, around 2.3 million Americans were enrolled in college, or about 1.5% of the population (historic census data). By 2023, this percentage had risen to 7%—or 24 million students—and more than one-third of adult Americans had completed a four-year program. In 1958, the National Defense Student Loan program was created to focus on developing students in areas deemed critical to national security. The 1965 Higher Education Act broadly expanded federal student aid to the general population. Find a thorough history of federal student aid policy here. Even accounting for inflation, average tuition and fees have more than tripled since 1970 (see tables). Covering Costs On average, contributions from parents (39%) and college savings funds (11%) cover roughly half of the cost of a college academic year. To pay for the remainder, students rely on scholarships, grants, work-study programs, and loans. One primary mechanism to save for college is a 529 plan. These tax-favored accounts grow tax-deferred, and withdrawals aren’t subject to state or federal taxes if used for qualifying educational purposes. The federal work-study program allows students to earn financial aid while getting practical part-time work experience. Average awards are small relative to tuition costs, around $2K annually. Fewer than one in 10 students receive a scholarship. An estimated $46B in public scholarships are given each year (along with about $7B in private scholarships). Search through more than 9,600 scholarship opportunities here. Around 40% of students take out loans each year, with the vast majority relying on federal loan programs. There are three general types—subsidized (interest does not accrue while in school), unsubsidized, and options for parents and graduate students. Applying for federal student aid is free. Students must fill out a FAFSA (Free Application for Federal Student Aid) by Oct. 1 for the following school year. See how to follow the process and find the link to download a FAFSA form here. Are Costs Sustainable? The rising cost of higher education has sparked public debate over the return on investment of the decision to attend college. Many high-profile universities have begun to offer generous aid packages and claim full sticker price costs are only paid by a small percentage of enrollees. A consequence of rising college costs is accumulating student loan debt. More than 43 million Americans hold a total of $1.6T in outstanding federal loans, with the average household with student debt owing around $55K.
Hours of research by our editors, distilled into minutes of clarity.
You've probably heard college admission rates have grown more competitive over the years, but have you ever seen data backing up that claim? This tool lets you examine how specific college admissions rates have changed every year since 2001. Wofford College, for instance, was actually harder to get into in 2001, than it was in 2014, with a 70% admissions rate versus 77%. Look up your school here.
As of summer 2024, interest rates on federal student loans ranged from 6.5% for undergraduates to above 9% for loans taken out by parents (private loans can exceed 17%). The interest rate determines how quickly the amount owed grows. Use this calculator to estimate your monthly payments.
Even for students attending in-state, public universities, the cost of attending college has risen dramatically, exceeding $27K with fees and living expenses per year.
Balancing the benefits and costs of higher education on a school-by-school basis can be overwhelming. This database from the National Center for Education Statistics provides an easily searchable database with comprehensive information on costs, student aid, outcomes for alumni, retention rates, and much more. This free tool helps you make an informed decision as you navigate college options.
The rising cost of college has many of us wondering, what exactly is a college education for, anyways? This "Freakonomics" podcast episode breaks down how colleges operate like large businesses and try to differentiate their products from one another to win market share. To find out what the overwhelming higher education system is doing wrong (and what it gets right), listen here.
After the Civil War, economic growth boosted philanthropy, much of it ending up in universities and colleges. Charles Eliot, the longtime president of Harvard, realized a university’s success was determined by how much money it could hold in the endowment. His approach to endowments radically changed their role in the modern university.
Determining the all-in cost for each student’s specific circumstances can be tricky. But what is behind the rise in price? Analysts point to a number of factors—lack of transparency around cost, expansive government support, increased administrative burdens at schools, and more.
In every college course, specific texts are assigned and form its syllabus. In this database and graph, the roughly 1 million most-assigned texts from over 7 million courses are visually mapped in clusters, where you can zoom in on your favorite topic and find the texts most commonly read within it.
Investors put after-tax dollars into these education-earmarked accounts, and like a 401(k) or IRA, they invest them into stocks, bonds, or funds. When it comes time to withdraw, investors do not pay any taxes on distributions. However, the money must be used for approved expenses like college tuition, textbooks, and trade schools.
One type of 529 plan, prepaid tuition plans, can only be used to pay for tuition. The other type, college savings plans, can also be used to pay for related education expenses, including room and board. One key advantage of a prepaid tuition plan is that it locks in tuition prices. Both types have limited options for non-educational uses.
The United States is home to more than 33 million businesses, the vast majority of which are small businesses, with millions being created (and others closing shop) every year. These businesses often rely on loans, provide the goods and services that keep the economy flowing, and sometimes even grow large enough to enter public markets or provide private investment opportunities. Explore key topics central to business and finance, from the role of the Federal Reserve to how initial public offerings work, how millions of American students finance higher education, and more.