Why is College So Expensive?

The time has come! You and your high schooler have begun the search for the perfect college. As you both dig into the variables and see the true costs of higher education, you can’t help but wonder, “why is college so expensive?!” 

Since 1980, the first year in operation for the U.S. Department of Education, the average cost for college tuition, room, and board has increased 800% – five times the rate of inflation. Here are key drivers of the extraordinary price of college today:

Administrative Bloat

Administrative bloat and wrap-around services have grown into significant expenses in college budgets. Over the past decade, administrative costs have increased at a much faster rate than instructional costs, creating an imbalance as colleges prioritize administrative spending over education. Wrap around services organized by administrators range from mental health services and DEI initiatives, to therapy puppies and pottery painting, to concerts or lectures where entertainers and politicians are paid hundreds of thousands of dollars to visit campus. Universities hire non-faculty staff to run these programs, racking up significant costs and passing the entire bill to students.

Amenities Race

Tuition is not the whole story. It is common for universities to charge students thousands of dollars per year, on top of tuition, room and board, for the privilege of accessing amenities. 

The Progressive Policy Institute highlights that many universities are competing to attract students by offering luxury resort amenities and a ready-made social life. This comes in many forms ranging from resort-style pools, lazy rivers, state-of-the-art recreation centers, ice skating rinks, rest and wellness lounges, study abroad programs, speaker series, club opportunities, and so on. 

Many colleges and universities have also become job placement centers with some institutions offering guaranteed job offers once a student graduates. Other universities seem more interested in building real estate empires to house these amenities than managing their bottom line.

Availability of Subsidized Student Loans

As college costs soar, families struggle to keep up—yet taking on student debt has never been easier. The widespread belief that a degree is essential for success fuels an unchecked cycle: universities assume the student pipeline will never dry up, raising tuition relentlessly while graduates sink deeper into debt.

This dynamic aligns with what former U.S. Secretary of Education William J. Bennett described in his 1987 New York Times article, Our Greedy Colleges. He argued that increases in financial aid encourage colleges to raise tuition, knowing federal loan subsidies will absorb the cost. This idea, later known as the Bennett Hypothesis, highlights how easy access to federal loans has contributed to skyrocketing student debt.

Bennett noted that the federal government grants student loans with minimal requirements—no credit check, no collateral, and no consideration of a student’s program of study, borrowing history, or academic record. As a result, colleges have little incentive to control costs, while students take on ever-mounting debt with few guardrails.