Many universities are increasing tuition for the upcoming school year while pointing to record-high price levels.
Inflation reached 8.3% as of last month, remaining near elevated levels last seen 40 years ago. The high prices coincide with the United States economy shrinking at a 1.5% annualized rate in the first quarter of 2022 — representing the only quarter with negative growth since COVID-19 hit the United States. As a result, some economists are warning of stagflation — a reference to the sluggish economic growth and high inflation that characterized the late 1970s under President Jimmy Carter.
As young Americans work and save this summer in preparation for the fall semester, their universities are by no means giving them a break from the higher living expenses.
Boston University, for example, is hiking tuition by 4.25% for the 2022-2023 school year — its largest jump in 14 years.
“By far, my greatest immediate concern is the impact of inflation on faculty and staff, our students, and the University,” Boston University President Robert Brown wrote in a letter. “This increase does not keep pace with the current national rate of inflation and cannot fully offset the increased costs of University operations or fund salary increases that would fully mitigate the effects of inflation on the families of faculty and staff.”
“I also am mindful that our students and their families are affected by our increases and by inflation,” he added. “We are caught in an inflationary vise between the institutional pressures and the impact on our students and their families.”
The University of Pennsylvania is increasing tuition by 2.9% — its highest increase in the last decade. “It was important to us that we continue to keep cost increases low while simultaneously bolstering our grant-based undergraduate financial aid program,” University of Pennsylvania Senior Executive Vice President Craig Carnaroli explained in March. “This year, our aid budget is growing at a rate triple that of charges, ensuring that we are able to fulfill our commitment to meet a student’s demonstrated need each year, even as costs increase.”
Likewise, the University of Virginia announced plans to increase tuition by 4.7% next year and 3.7% in the following year. “These new tuition rates will help the University balance its annual budget in an inflationary environment, while maintaining our commitment to accessibility and to value,” University of Virginia President Jim Ryan said. “We will continue to be one of the few public universities in the country to meet 100% of students’ demonstrated financial need while offering all of our students a world-class education and experience during their time here at UVA.”
Weeks before the 2022 spring semester began, Virginia Tech’s Board of Visitors imposed a $100 to $215 surcharge for meal plans to account for workforce shortage issues. According to the university, the price increase was driven by a need to attract and retain more dining workers at pay competitive with market rates.
High inflation is corresponding with a drop in consumer confidence. The Federal Reserve’s most recent Survey of Household Economics and Decisionmaking showed that 24% of respondents thought national economic conditions were good or excellent. The figure marks a significant decrease from 50% in 2019 — as well as a slight decrease from 26% in 2020, the year in which COVID-19 and lockdowns induced a global recession.