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November 16, 2022

Future of Higher Education

Affordability and Value in Higher Education

two people sitting at a table counting money and budgeting

by WGU Public Policy Team

The traditional financial model of higher education is broken. College affordability is one of the most significant issues affecting higher education, and the Covid-19 pandemic magnified its impact. The high cost of obtaining a college degree disproportionately leaves underserved students with limited access to postsecondary education. Affordability is often a reason why many leave college without a degree, often with student loan debt.

Postsecondary education can and should be affordable for all learners, but it has outpaced the rate of inflation in the past 50 years by about 460%. With the average increase in the annual cost of college outpacing the growth of family income or state investment, affordable higher education has become more of an unrealized dream than a reality for far too many. As evidence, the average cost of a college degree has more than doubled since 1988, with the average cost of tuition at a private college totaling $38,185 a year. Meanwhile, national student loan debt has grown from $240 billion in 2003 to nearly $1.75 trillion today, with over 44 million Americans holding debt incurred as a student.

The Cost of Higher Education

The national statistics are sobering. Annually, the United States produces nearly 2 million bachelor’s degrees—and an estimated 1 million student loan defaults. The cost of college has risen 120 percent since 1985. As a result, student loans have become a financial albatross around the necks of millions of Americans, leading to delayed retirements, marriages, and homeownership. Policymakers have increasingly recognized the importance of accessible aid as a potential solution. A recent spate of legislation across states would require high school students to complete the Free Application for Federal Student Aid (FAFSA) to make college more accessible for students who qualify for federal aid.


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Not only does a college education cost more, but the time to complete a degree is increasing. In 2021, only 62 percent of students completed their degrees within six years. For Black students, completion rates were 44 percent; for Hispanic students, 51 percent; and for Native Americans, 47 percent. Only one-third of learners 25 years and older complete their degrees, and estimates indicate that it may take as many as seven years to do so.

Noncompletion drives loan defaults, but completion isn’t a panacea: Analysis by the Center for American Progress shows that a dozen years after graduation, the average Black bachelor’s graduate owed 114 percent of their original loan balance. Furthermore, the Postsecondary Value Commission found that 649 colleges and universities do not provide students with any economic return after 10 years. Regardless of the cost, education is not affordable if it doesn’t lead students to opportunities—even if the education is free to the student. Historically, rising tuition rates have been blamed on “cost disease”—the idea that, without a technological enabler, the nature of higher education cost structures would always outpace inflation.

Making Higher Education Affordable

Mainstream higher education has been slow to employ technology to increase access, lower prices, and drive a student-centered model of education.

Higher education should be accessible to all, and affordability is a critical element of access. This perspective has led WGU to adopt three keys that drive our operations and guide our innovation:

  • Access and outcomes must be equitable.
  • Completion rates must be on pace with our students’ aspirations (not just the traditional six-year pace).
  • Return on investment for graduates must take into account not just what they paid but what their degrees allow them to earn.

Policymakers can support these three keys by supporting proposals that personalize borrowing, make tuition affordable, and reduce students’ time to degree.


Interested in learning more about affordability in higher education?

Contact WGU's Public Policy Team at

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