Rising rent prices present challenges for college students
Aug. 20—Rising rents have been hitting many U.S. households hard in recent months.
After remaining flat for most of 2020, the national median rent rose by 17.6% in 2021 and is already up another 6.7% year-over-year in 2022. And as the largest regular expense that most households face, the rise in housing costs is squeezing budgets in every other category.
Price pressures from rent are challenging for college students, especially first generation college students and those from low-income families. Students often lack the rental history or savings for deposits that help them get approved for a rental.
Academic obligations may limit students' ability to work and earn money to put toward rent, so they frequently take out more in loans to cover living costs in addition to tuition and fees. And while many colleges offer housing to students, on-campus housing supply is not always sufficient to meet student demand — and, in some cases, may not even be more affordable than off-campus options. As a result of these issues, students often struggle to find adequate housing. According to research from the U.S. Department of Housing and Urban Development, tens of thousands of college students are homeless.
Students' challenges with finding housing also have consequences for their success in school. Research has found statistically significant relationships between housing insecurity and college persistence and completion. The insecurity can also lead to greater stress, worse physical health and increased incidence of depression.
The student housing issue has grown in scope and significance over the last two decades as record numbers of students pursue higher education. The 72 million member millennial generation first reached college in 2000 and have become the most educated generation in U.S. history. Enrollments of nontraditional students also grew following the Great Recession as more adults pursued new careers or additional credentials to be competitive in a difficult job market. As a result of these trends, the total number of degrees and certificates awarded annually grew by more than 56% since 2002 and nearly 25% since 2010.
Amid this boom in enrollments, total college costs have also increased substantially. The cost of tuition, fees, room and board at a four-year college has increased by 49.5% over the last two decades, after adjusting for inflation. Today, on average for both public and private institutions, the total cost to attend a four-year school is $29,033. As housing costs continue to rise, that figure is poised to grow in coming years.
Students struggle the most with housing costs in locations where housing is expensive for all renters. The average costs of off-campus room and board are highest in some of the most expensive states in the U.S., including California, Hawaii and New York. In contrast, the most affordable states for college students include Utah, Idaho and Maine.
Home to Missouri Western State University, the St. Joseph area is lower on the list for Best College Towns for Student Renters. It ranks at 87, with a weighted average of $10,030 annual for off-campus room and board.
Laura Wyeth, with Berkshire Hathaway, said more students have been moving off campus.
"Parents of college-aged students are also choosing to purchase an income-producing property, so instead of paying rent, they're paying a mortgage and it's a great way for young people to get started in owning their own property," Wyeth said.
One option that Wyeth hopes students will look at is relocating to Downtown St. Joseph.
"I don't know if a lot of college students are aware of Downtown, and in the future I want to work on a campaign to do loft open spaces tours for students to come down," she said.
Certain college towns offer reasonable rents for student residents. Twelve major metros in the U.S. have average room and board costs below $10,000 per year, and three have costs below $8,000 annually. Many of these locations for affordable student housing also have cost of living below the national average, making them potentially good options for cost-conscious students when choosing where to live.
The data used in this analysis is from the National Center for Education Statistics' Integrated Postsecondary Education Data System and the U.S. Bureau of Economic Analysis' Regional Price Parities. To determine the best locations for student renters, researchers at Porch calculated the weighted average of off-campus room and board (not including those living with family) for the 2020-2021 academic year, with lower values being ranked higher. In the event of a tie, the location with the lower weighted average of on-campus room and board was ranked higher.
News-Press NOW
reporter Andrew Gaug
contributed to this story.
Andrew Gaug can be reached at andrew.gaug@newspressnow.com.
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