College costs climbed to an all-time high in 2012 while state and local funding for items such as operating expenses and student aid fell, a new report shows. According to the latest State Higher Education Officers Association report, tuition for public colleges and universities rose 8.3 percent for the 2011-2012 school year, pushing the average cost up to $5,189. At the same time, however, funding to the schools dropped 9 percent to a 25-year-low of $5,896.
The upward trend is likely to continue in 2013, since state governments plan to spend 10.8 percent less on higher education this year than they did in the year prior to the Great Recession. Only 12 states now spend more on higher education than they did before the recession. The decrease in funding has contributed to the six-fold increase in college tuition over the last 30 years.
Still, Americans are graduating from college at record rates, but they are doing so while accruing more debt. The number of Americans carrying student loan debt is at record levels, and that has had consequences throughout the economy, especially since earnings for college graduates are declining.