From the Desk of Melinda Cabrera

Tuition hikes at colleges and universities tend to provoke backlashes from students, parents, and education advocates, as one would expect. Among others likely to suffer their own economic fallout downstream of such policy decisions, however, the reaction is often muted. In today’s increasingly interconnected economy, though, hardship in one sector seldom fails to darken others.

Tuition increases have become depressingly common in recent years, particularly in California. In September, trustees at California State University (CSU) voted to raise student tuition by 6 percent annually for five consecutive years. This followed a similar announcement from the University of California in July 2021.

The consequences of larger tuition bills for college students and their families are by now sadly familiar. Students are forced to borrow more and graduate with more debt. Because many must work more part-time hours to defray growing expenses, they take longer to complete their studies. Some even reconsider their majors, with an eye toward more remunerative fields.

And these are the fortunate ones. Other students are forced to drop out, often having incurred significant debt. For these young people the financial burden is twofold: They must repay their student loans without the earnings premium conferred by a college degree.

Still others will tragically forgo college altogether. According to data from the National Student Clearinghouse, undergraduate college enrollment nationwide dropped 8 percent from 2019 to 2022. Disconcertingly, a return to in-person instruction failed to stem the decline. The slide in the college attendance rate since 2018 is the steepest on record, according to the U.S. Bureau of Labor Statistics. Would-be students routinely cite rising costs as one of their main reasons for bypassing college.

It goes without saying that those who eschew college or drop out will likely earn far less over their lifetimes – 75 percent less compared with those who earn bachelor’s degrees, according to Georgetown University’s Center on Education and the Workforce. Those without degrees also typically enjoy less job security.

For a full account of the impact of tuition increases, however, we must look beyond the lives of students. Price pressures that initially affect one consumer segment have a way of rippling through the wider economy.

Consider the plight of merchants and business owners whose fortunes are closely tied to campus life. Think restaurants, bars, retailers, and service providers. Cash-strapped students will in time beget dampened bottom lines, which in turn exert downward pressure on local economies. Young people who come out of college with heavier debt loads will also be more constrained in their spending.

Further, to the extent that tuition hikes contribute to enrollment declines by discouraging students from applying to and sticking with college, they are likely to worsen emerging labor shortages in fields from health care to information technology.

The fiscal challenges confronting colleges and universities are undeniably serious. In CSU’s case, administrators say the system needs to address a $1.5 billion budget shortfall if it is to continue funding programs and services at current levels. Inflation has been a factor, and officials point out that CSU’s 23 campuses haven’t seen a tuition increase in more than a decade.

I suspect that’s small consolation to the system’s 460,000 students, many of whom are minorities and first-generation college students.

I’m not sure what the answer is. In the absence of tuition revenue increases, programs would likely have to be cut, which hardly seems better.

This much I do know: We all suffer when college becomes increasingly unaffordable for young people.