Inflation. It is hard to avoid, impossible to run from, and seems to be seeping into our thoughts on a more frequent basis. Inflation is simply defined as the rate of increase in prices over a set period. What causes inflation? Well, some economists attribute the US inflation to a ‘product shortage’, stemming from the COVID-19 pandemic (hasn’t COVID done enough?). As the world reopened, firms seized the opportunity to charge more for their services and products to pad their bottom line. Pay for employees started to increase (just not nearly as fast as costs). And so, companies had to raise prices once again for their goods and services to pay increased wages and increased business expenses. The circle goes on and on.
What does that mean for you? Well, the education industry was hit hard.
During the height of COVID, even when inflation was on the rise, many colleges choose to freeze their tuition costs to encourage students to start or remain in school. But, with operational costs rising and tuition rates frozen, colleges couldn’t keep up. Eventually, there was nothing else to do besides increase tuition rates to make up for the deficit.
On a personal note…
The price of a college education is often determined by family finances. To keep up with inflation, many colleges and universities are passing those costs along to families. Even those families that ‘can afford’ to pay the increase do not look favorably on it. And for families that are generally more price sensitive, the rise in tuition can cause significant problems. If inflation rates continue to rise above traditional levels, it may limit college access.
For advice on how to spend smart and combat the affects of inflation, check out this article.
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