Wednesday, October 08, 2014

Peak Tuition?

It might be too soon to call this a trend, but average household spending on college tuition fell 6 percent between 2012 and 2013, after adjusting for inflation. This is quite a reversal for a category that had been growing like there was no tomorrow. Between 2007 and 2012, average household spending on college tuition climbed 27 percent.

College enrollment fell by 930,000 between 2011 and 2013. This means 2012 might have been the peak year for household spending on college tuition. The spending spree was bound to end as young adults and their parents struggle to pay college expenses while their household incomes decline.

According to a Pew Research Center analysis, fully 69 percent of 2011-12 college graduates (defined as those earning a bachelor's degree) have student loans, up from 49 percent two decades ago. The 2011-12 graduates with loans owe more than twice as much as their counterparts in 1992-93: a median of $26,885 versus $12,434 (in 2013 dollars).

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