Once upon a time, Americans could work their way through college on a part-time, minimum-wage job and graduate debt free.
That time, specifically, was 1985. The minimum wage was livable. College costs were palatable.
Today, the picture is much grimmer. Students do indeed work during college, but their earnings barely put a dent in tuition, books, fees, room and board. Even two jobs are often no match for the cost of attending most public, four-year universities.
“During the last half of undergrad, I had at least two jobs and full-time school,” said Becky Keyser, a graduate of the University of South Florida.
During Keyser’s final undergraduate semester, she was working up to 70 hours a week split among three jobs. Her experience is more the rule than the exception. Like millions of students nationwide, she had to take out student loans to afford her undergraduate degree in environmental science — on top of working multiple jobs.
The problem, say higher-education experts, is economics.
“Students are coping with soaring costs by working while attending school and taking out student loans,” said Brian Walsh, a CFP and the manager of financial planning at SoFi, a personal-finance lending and advising company.
“That’s an important point because it’s no longer an either-or proposition like it may have been a couple decades ago.”
The Reality of Working Your Way Through College Today
This college-affordability conundrum really boils down to two things: College costs are skyrocketing and real earnings are stagnant or falling for low-wage workers.
In 1985, for example, the federal minimum wage was $3.35. That same year, a four-year, public education ran $3,859.
Hypothetically, in 1985, a part-time, minimum-wage job could cover the cost of a bachelor’s degree. Not anymore.
“You can’t actually work your way through college in the sense of earning enough money to pay for your tuition,” said Sandy Baum, a fellow at the Urban Institute and an expert in college affordability.
Today, the federal minimum wage is stuck at $7.25 an hour, and it’s been that way for a decade — the longest freeze ever. Meanwhile, the average cost of a public, four-year degree has ballooned to $80,661.44, based on an analysis by The Penny Hoarder that averaged the growth in costs over the past 15 years.
“Earnings have gone down,” Baum said. “The national minimum wage goes down every year in real terms.”
That’s because of inflation. Every year that the minimum wage does not increase at the rate of inflation, the purchasing power of $7.25 goes down. And this problem compounds when we’re talking about college tuition, which has increased faster than inflation year after year.
You can’t actually work your way through college in the sense of earning enough money to pay for your tuition.
“That’s probably why you see $1.4 trillion in student loans and 70% of college students working at the same time,” Walsh said, citing a 2018 Georgetown University study on working college students.
But what about the workers who earn above the federal minimum wage? Twelve states have minimum wages above $10. And numerous big employers offer $15 minimum wages, thanks to a tight labor market. According to BLS data, the median wage in the U.S., which includes all ages and education levels, has indeed increased since 1985 to about $15.
But the increase in college costs far outpaced the wage gains. Even those workers making double the federal minimum wage still can’t afford college.
A Look at the Numbers
The Penny Hoarder analyzed the latest college-cost data from the National Center of Education Statistics (NCES), from the 1985-1986 academic year to 2017-2018 along with median wage data from the Bureau of Labor Statistics for those same years.
Here are the key takeaways.*
- College costs for a four-year, public institution rose 128% since 1985.
- In 1985, minimum-wage workers could pay for college in 1,152 hours. In other words, any part-time job (more than 22 hours a week) would pay for annual college costs entirely.
- Today, it takes minimum-wage workers nearly 2,765 hours to cover college costs. That requires a 53-hour work week.
- The purchasing power of the minimum wage has fallen since 1985, by 5.9%.
- For all workers, median hourly wages increased 5.5%. But college costs grew 23 times faster than those wage gains.
What Are Today’s Students to Do?
Today, students are likely to work during college to cover basic living expenses — not full college costs. Until wages go up or college costs come down (or both), students have to take extra steps to avoid heavy debt.
Walsh underscored a decision many students face: Work more or take out additional student loans?
“We try to look at the cost of working along with the benefit of working. So if you delay graduating by a year, you’re taking on the additional cost of another year of tuition, fees, expenses,” Walsh said. “And you’re delaying your earning power by one year.”
Through that lens, working extra and delaying graduation could end up being more expensive in the long run.
Beyond 15 hours a week, additional work can have diminishing financial returns and can negatively affect GPA and graduation rates.
“It’s trying to find that moderation,” Walsh said. “You want to be thrifty but also realistic.”
In addition to striking a good school-work balance, here are a few additional ways to ease the burden of college costs.
- Every college student should fill out the FAFSA to see if the government can help cover the costs.
- Scholarships are another way to keep costs down. Our guide compiles 100 college scholarships, all in one place. Check with your school for scholarship opportunities as well.
- Starting at a community college for two years before attending a public university is a great way to save big on your education. Staff Writer Tiffany Connors breaks down the benefits of making a community college transfer, and how it could reduce the cost of a bachelor’s degree by more than $12,000.
- Lastly, some full- and part-time jobs will actually cover tuition costs. Disney, Starbucks and Walmart have robust education programs for their employees, but each one is different. Review our guide on jobs that pay for college before dropping everything to become a barista.
Even working as much as she did, Becky Keyser barely afforded basic necessities during college. When her ‘98 Ford Escort’s AC broke, she had to bear the Florida heat for years.
These days, she lives in Oxford, England. While she’s escaped the Florida heat, her student debt still looms. She’s on an income-based repayment plan.
“But that means that what I pay doesn’t even cover the interest that’s accruing on my loans,” she said
*Note on methods: Wages are adjusted for inflation in 2017 dollars to remain consistent with the latest data from the NCES. College costs are based on the fees to attend a public, four-year institution for one academic school year. This estimate includes tuition, fees, room and board.
Adam Hardy is a staff writer at The Penny Hoarder. He specializes in ways to make money that don’t involve stuffy corporate offices. Read his latest articles here, or say hi on Twitter @hardyjournalism.
Former Penny Hoarder data journalist Alex Mahadevan contributed to this article.