How Online Students Escape America’s Fastest-Growing College Expense

When a college student chooses to enroll in an on-campus program instead of an equivalent program offered online, that student also chooses to pay America’s fastest-growing college expense. And that particular expense probably isn’t the one that the student expects would be growing so rapidly.

It’s not tuition. Our February 2025 report “College Affordability: Why College Costs Aren’t Skyrocketing” refutes the preposterous notion that tuition costs are “skyrocketing.” That article presents data showing that income-adjusted net prices for tuition at colleges across America—the discounted prices that students actually pay—haven’t increased in almost two decades. And during the most recent period following the Covid era, those average net tuition prices plummeted.

Instead, the fastest growing costs of college during the past few years have actually been room and board—rent plus food. Yet because of the media’s relentless propaganda about skyrocketing tuition sticker prices, most students and their families frequently focus on rising tuition costs—even though housing charges on or near most college campuses are actually rising much faster.

Before we look at increases in housing costs on and near campuses, it’s useful to briefly review how such costs compare with general estimates for rental housing across the nation. And as we’ll see, judgments about the relative expensiveness of campus housing costs largely depend on the data sources used for price comparisons.

Many four-year colleges require undergraduates to live during their first two years in university-approved housing like dormitories, fraternities, or sororities. Average annual data from the National Center for Education Statistics for the 2022 academic year shows that these students overall paid $12,917. Students at public in-state institutions paid less, at $12,302; students at private nonprofit institutions paid more, at $13,842.

All other college and university students live in off-campus housing, and according to NCES these students on average paid significantly less than their younger classmates. NCES says that overall these charges averaged $11,464; students at the in-state public colleges paid $11,983, and those at the private nonprofit colleges paid $10,876.

Based on a roughly 34-week academic year that includes new student week plus the winter holiday season, all these figures are slightly less than or equal to the official government estimate for median gross rent in the United States. The Census Bureau’s 2023 American Community Survey determined that value to be $1,406, and this value aligns with recent estimates published by the Apartment List National Rent Report. However, a later private survey reported off-campus rental values that were substantially more pricey than those reported by NCES—especially at campuses adjacent to some of the nation’s most expensive housing markets.

This was RentHop’s May 2024 College Rent Report. This “big data” survey claims to have analyzed the prices from more than a million off-campus rental listings near 100 of America’s most popular universities.

RentHop’s survey considered the median of all bedroom types among apartments and houses. Here’s how they describe their methodology:

To produce the ranking, the median price for all listings within 2 miles of the center of campus was taken and ranked from most expensive to least. If there were not enough listings within 2 miles of the campus, we then expanded the radius to ensure that enough listings were included. In denser and more developed cities, the radius was reduced accordingly to reflect housing availability around the campus.

Based on the 100 values that RentHop reported, the average monthly rent we calculate is $2,105, which is actually 50 percent greater than the Census Bureau’s official estimate. In other words, on average and other things equal, college students at 100 of the most popular American universities pay a 50 percent rental premium to live within two miles of their campus centers.

So yes, RentHop’s data suggests that it’s significantly more expensive to live near a popular university campus when compared with the official government rental figure. But keep in mind that in RentHop’s highest-priced markets, the rental premiums paid by students are vastly more expensive than the official government estimate.

For example, RentHop reports that New York University is the nation’s most expensive college for off-campus housing, with a median rental of $4,795 per month—a staggering 341 percent increase over the government’s official estimate. The runner-ups are the University of California at Irvine with a $4,100 median rent that’s 291 percent greater than the national median. UCI is closely followed by NYU’s neighbor Columbia University with a $3,995 monthly rent, and that amounts to a 284 percent increase over the Census median.

Having established that housing charges are roughly equivalent to the national median in one data sample and substantially more expensive in another—especially in the highest-priced markets across America—now let’s look at the increases in housing costs for college students over time. Our analysis relies on The Price of Room and Board, an authoritative study published by the Washington, DC-based Urban Institute in 2017.

The current increases in room and board charges continue a historical trend of price increases dating back some 45 years. That’s because between 1964 and 1980, housing and food costs for college students across America were essentially flat relative to inflation. But starting in 1980, those cost increases took off.

Analyzing federal data from IPEDS—the Integrated Postsecondary Education Data System—the Institute’s scholars recognized a startling result. They discovered that after adjusting for inflation, between 1990 and 2016, the charges for room and board had soared at four-year public colleges and universities from $5,700 to $9,800, and at four-year private nonprofit institutions, from $7,400 to $11,600. At the public colleges those spikes were equivalent to a 71 percent increase above inflation, and at the private colleges, a 56 percent increase.

What’s more, unlike net costs for tuition, which have fallen, inflation-adjusted housing charges have consistently continued their relentless climb by as much as two percent per year, even during periods when inflation was low. The College Board reports that inflation-adjusted room and board costs climbed by 14 percent during the decade between 2010 and 2020 alone.

The difference now is that these costs have increased so much that at many schools they’re outpacing tuition. Later College Board data demonstrates that starting in 2023, in-state students at public universities across the nation now pay more on average for room and board than they pay for tuition.

Jason Cohn, a research associate at the Urban Institute’s Center on Education Data and Policy, told the Hechinger Report’s Jon Marcus that “tuition hasn’t been growing, but housing costs are growing. The college affordability conversation should really be moving to living expenses.”

Cohn’s colleagues issued a follow-up report in 2023 called Nontuition Expenses: A Framework for Developing Policy Solutions. That report’s data shows that nontuition expenses—including room and board along with other living expenses—now make up the largest percentage of college student budgets on average.

For students attending four-year public colleges and universities, tuition and fees now represent, on average, less than 44 percent of their total cost of attendance (COA) each year. And at community colleges, tuition accounts for a mere 20 percent of a typical student’s COA, with room and board accounting for about half of these students’ total costs.

This changing cost structure means that even when students receive free tuition because of scholarships, or enough money in federal, state, or institutional grants to cover most of their tuition, “that doesn’t mean that college is necessarily affordable,” says Cohn.

That’s because more than two-fifths of students who receive enough financial aid such that they pay no tuition or fees still need other sources of funds. Typically such students end up borrowing money in student loan financing to cover their housing and other nontuition costs, according to the Institute’s data. And if a student has already borrowed to pay for a portion of their tuition, covering the high proportion of costs required by rent can substantially drive up their total loan debt.

It remains unclear why college housing costs keep rising so dramatically. The Urban Institute’s team studied four potential explanations:

1. Is the general cost of living (housing and food prices) increasing in college towns? They found that inflation-adjusted on-campus room and board charges in university housing were increasing at faster rates than off-campus rent and food costs.

2. Are campuses spending more on “luxification,” by investing in luxury amenities in residence halls and college recreation facilities that justify higher prices? The researchers found that “auxiliary” expenditures on dorms and dining halls have increased, but not enough to match the rises in room and board charges. They also found that new dorm room construction has kept pace with rising enrollments, such that room shortages haven’t driven up prices.

3. Have greater institutional price discounts offset rising room and board charges? The Institute’s scholars found that discounts offset much of the increases in the cost of attendance at the private colleges, but not at the public ones.

4. Are colleges overcharging for room and board to cross-subsidize their indirect costs? UI’s researchers found evidence that the private colleges engage in this practice, but not the public institutions.

In short, no single factor explains why college students continue to be faced with such dramatic cost increases for housing. The researchers say that they tried to find a single “smoking gun” factor that explained most of the variance in the cost increases, but were unable to do so.

Students who focus excessively on tuition can be surprised by these unexpected housing costs, according to Dr. Justin Ortagus, the director of the University of Florida’s Institute of Higher Education and a professor of higher education administration & policy. He conducted a 2020 study that found high rental costs on or near campus were among the reasons why students stopped out temporarily, transferred to another college in a less expensive area, or even dropped out of college permanently. “It doesn’t always go into the mental calculus of these students and their families,” he said.

Henry Taylor-Goalby, a senior at the University of California at San Diego and the housing officer of UCSD’s Student Association, lives in one of California’s most expensive towns, La Jolla. On RentHop’s list, his university ranks as the fifth most expensive for off-campus housing in the United States. UCSD’s median off-campus rental of $3,640 places the school just behind UCLA at $3,750, and ahead of Harvard at $3,560.

He told Marcus that “it can blindside a lot of people. Students will end up in college and then realize that they’re ‘rent-burdened.’ Housing is a human necessity, and yet it’s the thing people try to compromise on just to get an education.”

Fortunately, students who choose online education programs have better options. Because they can study from anywhere, they aren’t forced to pay the expensive housing costs faced by residential students who have no choice but to live on or near a college campus. Instead, online students will likely never risk ending up “rent-burdened” or even blindsided—and all because they’ll escape having to pay America’s fastest-growing college expense.