But a turning point arrived around 1970.
The economy contracted, and while it was not a severe recession, double-digit inflation occurred, and combined with an oil embargo, the start of industrial factories and jobs going overseas, and Baby Boomers entering college in record numbers—with a waiting list at many universities—a “perfect storm” began to build. College tuition and fees climbed even higher than the double digit inflation rate.
Campuses had to pay for the construction of new buildings to accommodate the growing student populations nationwide.
As family income fell with regards to inflation, families gradually could not cover the cost of colleges for their families.
Loans heavily subsidized by the federal government, eventually became a privately owned loan service called Sallie Mae, and it gradually replaced federal grants as the main source of money for both poor and middle-class college students.
As “Reaganomics” and deregulation took off in the early 1980s, as in so many other areas of American life, family incomes were shrinking, and tuition at public universities began climbing, outpacing any other index of cost of living the federal government tracks: food, housing, cars, fuel, utilities, health insurance, and household goods. As college costs include several of these indexes, such as food, fuel, and construction costs for building and for student housing, the private colleges’ and universities’ costs also went up.
While the college-age population has not increased since the tail end of the baby boom, the percentage of the population enrolled in college has risen significantly, especially in the last 20 years. Enrollment in undergraduate, graduate and professional programs has increased by almost 50 percent since 1995.
As a consequence, while some politicians may argue that state appropriations for higher education have risen, and much faster than inflation, the total state appropriations per student in college has dropped, and continues to do so. State tax revenues (in terms of percentages per student) are no longer invested in education.
And statistics from the US Dept. of Justice finds that the more corrupt states, (one being ours), spend more money on construction, highways, economic “development” and police protection, which provide more opportunity for corrupt officials to use public money for their own gain.
These states spend less on health, education, and welfare, which provide less opportunity for officials to collect bribes. Since the DOJ has tracked this, more than 25,000 statewide corruption convictions (in which tens of millions of tax revenues have been stolen,) have taken place in states nationwide since 1976.
And naturally, the less in federal monies a state receives for higher education, the higher the costs for students. In the $1.1 trillion of federal discretionary spending in 2015, 52 percent went to our military, with less than half to everything else.
In 1965, during the Vietnam and the Cold Wars, military spending was less at 43 percent. Consequently, federal education investment was high through the 1960s, reaching a peak of 1.2 percent of GDP in 1979. Thereafter, federal education spending declined to about 0.6 to 0.7 percent of GDP in the 1980s and 1990s, before increasing modestly to nearly 0.8 percent of GDP in the 2000s.
In the early 2010s, federal education spending declined to 0.6 percent in 2014, and is expected to recover to 0.68 percent GDP by 2020; still a much smaller amount as compared to 50 years ago.

By Deborah Craig