WSJ What’s News - How the Rising Cost of College Is Changing Families’ Calculus

Episode Date: August 24, 2025

Rounding out our week looking at the finances of parenting, we’re looking at one of the biggest costs families can face: college. About 18 million students enrolled in post-secondary education this spring. That’s up from last year. And so is the price of tuition. Sandra Kilhof spoke to Journal reporter Oyin Adedoyin about how the skyrocketing cost of college is weighing on kids and parents’ decisions, and might even change what school they pick. Sabrina Siddiqui hosts. Further Reading The Price of Parenting  Learn more about your ad choices. Visit megaphone.fm/adchoices

Bank more oncours when you switch to a Scotia Bank banking package. Learn more at scotiabank.com slash banking packages. Conditions apply. Scotia Bank, you're richer than you think. Hey, What's News listeners. It's Sunday, August 24th. I'm Sabrina Siddiqui for the Wall Street Journal. This is What's News Sunday, the show where we tackle the big questions about the biggest stories in the news

by reaching out to our colleagues across the newsroom to help explain what's happening in our world. On today's show, we're breaking down one of the trickiest financial decisions parents face in 2025. Over this past week, the journal's been looking at the cost of parenthood, and through a range of interviews, we've explored everything from fertility costs to the everyday budgets of new parents. To wrap things up, our supervising producer, Sandra Kilhoff, spoke to journal reporter, Oyen, Aradoyen, about how the skyrocketing cost of college is weighing on kids and parents' decisions, and might even change what school they pick.

Take a listen. So, Orion, firstly, just please set the stage for us here. How many Americans actually go to college? And how expensive has it gotten in these days? Millions of students enroll in college every year. I think the latest numbers were, you know, about 18 million students enrolled in post-secondary education this spring. And that's up 3.2% compared to the same.

time last year. So, you know, that sets the stage for a pretty competitive landscape. And sticker price, or at least the cost that we see of tuition when we Google a college, is continuing to go up. As of 2023, college tuition fees were up 4.7% compared to 2020. College costs have risen due to a variety of factors like increase in administrative costs, but also decreases in state and federal funding. So you can see how this creates a lot of angst for parents and their kids, right? Because a million of students are in the pool a year. The cost is only seen to be rising and it's only seen to be getting more competitive and more high stakes. You talk about state and federal assistance. And I guess under the Trump administration, we have seen several high-profile

colleges that perhaps have run afoul of the administration's priorities, seeing a lot of that funding being cut. So it's not just a general thing, but there are also, shall we say, factors more politically that can play into those costs, I assume. Exactly. And students and their parents are seeing this happen in real time, reading the headlines, and factoring it into their decisions about where they want to go and how much financial aid or institutional aid they can get. It's pretty complicated when it comes to actually calculating how much a family can expect to get in any kind of financial assistance from an institution. We talked earlier about how the sticker price or the price that you look up, you see maybe $70,000 a year or $30,000 a year,

but that doesn't always factor in how much financial assistance that college might be willing to give a star student or student athlete or a student with great financial need. And so then that gets into the net price. And that's what the student and their family actually end up paying to go to school. And that particular equation, I think, is what vexes families and students the most. And as part of your reporting, you spoke to one family about how they approach this. And I guess the question is, how did that family navigate this challenging landscape? So a lot of families are prepping earlier for this process, starting as early as middle school, getting their kid in a meeting with a specialty advisor or counselor who can walk

them through the college application and decision process. They're saving in 529 investment accounts for their kids from birth. But something a lot of families are finding, and the family that I spoke with found was that the college that their daughter wanted to go to was still pretty expensive, even though they felt like they had saved up a good amount for college. And so I spoke with a young woman named Anna Sophia. She's 18. She recently graduated high school in California, where she's from. And she's super ambitious. So she had this list of 20 colleges that she decided to apply to. And among those colleges included Boston College, Boston University, Cornell, Harvard, big name institutions that we've all heard of. I think really at the crux of this,

is that at the heart of it all is a kid whose dreams about achieving a first-rate college degree and living out those dreams, how do you as a family, as a parent, balance those dreams with what, I guess, is fiscally realistic and responsible to your point. This family had been saving and it still turned out to be really expensive to meet her dreams. Yeah. And, you know, she is the firstborn daughter in her family, she's got a younger sister who's a couple years younger. So her parents are already now thinking about her younger sister as well and what colleges she wants to go to. She's interested in pursuing a career in the dentistry field and Anna Sophia is interested in going to law school. So their parents are looking at multiple iterations

of school and tens of thousands of dollars from tuition and other costs and the cost of just potentially living away from home because a lot of the schools that Anna Sophia had applied to were out of state. Her parents immigrated to the U.S. when they were young, and so they are not familiar with the American education system and the American college system. So they're also navigating this for the first time. So they thought that it would be prudent to hire a counselor to kind of help them navigate this process and help their daughter achieve her dream school while also counseling them on how to afford it. Coming up, more on getting into your dream school and what it takes to afford it.

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So many points. For more info, visit bemo.com slash eclips. Visit us today. Terms and conditions apply. And before the break, we were talking about Anna Sophia's college applications and how she was pursuing 20 schools. You write that she got into 13 of them. Was one of them her school of choice?

And how did finances play into that? So her dream school was Brown University, and she was ecstatic when she got in. She didn't even think that she would be accepted. But she also got into a couple of other competitive institutions, namely Northwestern, Notre Dame. And those schools were offering financial aid and scholarships. And Brown University had initially not offered her any scholarship. And when she was at Brown, she spoke with a student who had a very similar kind of financial background as she did. And that student, her to appeal her financial aid award at Brown and to kind of use these other awards that she had gotten from other competitive institutions and say to this school, hey, you know, you're my dream institution. I really want to go here, but I haven't gotten any financial aid and these schools are offering me some money. Is there anything that we can do? That really brings me to a question that's been lingering, which is surely the colleges have a massive role to play here in keeping the costs down for students like Anna Sophia. They do. And that's why we're seeing that those sticker

price is going up across the board for colleges, net price is actually going down. So more institutions are offering financial aid to students, and many of them do it this way, exactly like what we're talking about with Anna Sophia's case, where they get an appeal from a student and they look back at their numbers and see if there's any way that they can make themselves more competitive. Because at the end of the day, if a school offers a student enrollment into their college, they want that student to say yes. And they don't want that talent to go to another institution. Brown had gotten back to Anna Sophia within a couple of days of her appealing. And they said, okay, can you send us a couple more financial documents that you might have to help us get a better picture of your financial situation? And then we'll see what we can do to update your financial aid award. that financial aid awarded by Brown University, I'm going to assume that the cost of studying there is still going to be really high. How did her parents respond to this choice and how are they going about actually paying for this going forward now? I mean, undergrad tuition of Brown is

a little over $70,000 a year, right? So that's a really steep cost. And though she got some scholarships from the university and she has external scholarships that she's also applying to her tuition, she's still going to have to make up a lot of that cost, because she's going to be working on campus while she's doing her undergrad. And she's also planning to apply to more scholarships while she's in college. She's thinking proactively about law school and applying to law school scholarships that could kick in for after she graduates. And she's also said that she's willing to work at a coffee shop and do paid internships over the summer so that she can make up just those everyday costs that come up while you're in school. Because it's not just

tuition and fees and room and board, but you also have to pay for clothes and books and other costs that come up. This is a really interesting example of how one family is making it work in order to cover these really high costs for tuition, but not everyone can make it work. And I wonder, are we seeing some sort of consequence of the ticker price skyrocketing? Some families perhaps have to make some harder decisions, perhaps not choose that preferred university. that didn't give, you know, enough financial aid or has that higher cost. Yeah, I spoke with Greg Kaplan, who is the advisor and counselor who helped Anasofia and her family make this decision. And he speaks to tons of students who are in this exact same place. And he

told me that he actually noticed for the first time this year that he was seeing more families forego acceptances from, quote unquote, elite institutions in favor of a more affordable institution like a state school. So he thinks that this is indicative of a broader trend and shift in the way that students and their families are viewing whether, you know, a school is actually worth a particular financial investment. And there is some data that backs this up. Sally May's annual How America Pays for College paper actually found that families spent $13,837 this year on college. and that's up 9% from how much they spent last year. Their findings included that families felt like college is still viewed as a worthwhile investment,

but they are extremely cost conscious. So about 82% of families said that they were willing to kind of stretch their financial budget, so kind of like Anna Sophia's family, right, to secure that best opportunity. But 79% did say that they also ruled out schools based on cost. So we're seeing some truth in the data around that sentiment. Oyan, thank you so much for talking us through this tough college decision-making process. We really appreciate your reporting. Thank you.

And that's it for What's News Sunday, August 24th. Today's show was produced by Charlotte Gartenberg with supervising producer Sandra Kilhoff. We got help from Deputy Editor Chris Sinsley. I'm Sabrina Siddiqui. We'll be back tomorrow morning with a new show. Thanks for listening. Thank you.