Thinking About Going Back to School in a Recession? The Costs May Surprise You

Higher education usually runs a counterpart for the economy. When a recession is a hit, college enrollment increases as displaced workers return to school to improve their job prospects. At the same time, tuition often increases as college tries to offset the state’s funding cuts, while federal student aid may also increase to help students to hurt high tuition costs.

As a potential student, understanding the complex financial impact of recession on higher education can help you and better decisions for your future.

Historical reference to recession and higher education

After the recession, state funding for higher education usually falls. It fell to 12%after the 1990 recession, 15%after the 2001 recession, and 25%after the great recession. Most institutions pass these funding gaps on students through Tuition Hike.

Another way that college funding is responded to, by spending less on the faculty. For example, after the great recession, public institutions maintained a low faculty in proportion to the number of students and hired. Colleges also rely more on part -time faculty, which earn much less than their full -time counterparts and usually do not get benefits.

Impact on college enrollment

Of course, the recession also affects student enrollment. While you can expect enrollment due to high unemployment and tuition costs, the study suggests that in four decades from 1970 to 2009, the enrollment was not affected by the recession. In fact, after the great recession, the enrollment actually jumped. By 2010-11, the level of enrollment was 33% higher than in 2006.

Interestingly, the college enrollment between 2007 and 2010 had increased the year-on-year (YOY), operated by older adults rather than recent high school graduates, with most of the spikes with displaced workers who were trying to improve their job prospects. It aligns with research that the difficulty in reducing the work hours and paying a hostage increased the possibility of returning to school.

How did those who fought financially struggle to college amidst the cost of rising tuition during recession? Many people opted to participate in low expensive two -year colleges, who were responsible for a large part of jump in enrollment. In addition, federal student aid increased to unprecedented levels.

For example, the total pel grant expenditure doubled in 2007-08 to $ 15.9 billion, increased to $ 31.5 billion in 2009-10 and then to $ 37 billion in 2010-11. Meanwhile, the Congress increased the federal student loan limits and passed to ensure continuous access to the Students Loan Act, allowing the United States government to buy loans from private lenders to keep the student aid flowed. As a result, the federal loan increased from $ 74.6 billion to $ 110.4 billion in 2007-08 to $ 110.4 billion by 2010-11.

The 2020 slowdown was a unique case. College enrollment was demolished to close schools to curb the spread of Covid-19. Although many classes start online or re-start in-parson with strict social deformity measures, these changes made the college less attractive to many students.

Bottom line

Recession can reopen the cost and access of the college, but with a strategic plan, you can take and make informed about your education and career. By understanding the historical pattern, you can prepare according to an economic recession.