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.
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.
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.
Parents can open a custodial Roth IRA when their child starts to earn income (think: summer job), which can help them start saving early. For example, 529 accounts help parents save for college, while UTMA/UGMA accounts function like trusts.
Ivy League universities manage massive endowments to support their operations—but instead of simply spending donations, they invest them for long-term growth. Yale’s David Swensen helped reshape this approach in the 1980s by diversifying beyond stocks and bonds into private equity, hedge funds, and real estate.
More than $50B in scholarships are awarded each year, though analysts estimate more than $100M goes unclaimed due to a lack of qualified applicants. That fact should be unsurprising given the dizzying number and criteria for thousands of applications. This portal from the US Department of Labor lets you quickly search more than 9,600 scholarship opportunities by program, eligibility criteria, and more.
The Roman Emperor Marcus Aurelius is known as one of the most famous Stoic writers or thinkers, penning his classic opus ‘Meditations.’ In 176 CE, he endowed four philosophy chairs in Athens: one for Stoicism, and one for three of Stoicism’s rival schools: Aristotelianism, Platonism, and Epicureanism.
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.
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.
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.
According to a new study, US college and university endowments achieved an average net return of 11.2% in fiscal year 2024. Harvard University maintained its position as the largest endowment, valued at $53.2B. Read this Forbes article to learn more about how institutions manage and grow their financial resources through endowments.
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.