Question

Cost of college has been steadily rising. However, the enrollments have been rising as well (see graphs below). What demand and/or supply factors can explain this trend?

NOTE: Graphs below show cost index and enrollment index for private and public 4 year universities. Both indices are based on 1985-1986 school year.  

Public 4-year institutions 350 300 250 200 150 100 S0 Cost IndexEnrollment Index Private Non-profit 4-year institutions 250 200 150 100 S0 Cost Index Enrollment Index

Answer 1

cost of college has been rising and so is the enrollment rate, this is because now a days college education has become a necessity and is considered as an eligibility criteria for so many job. this is one reason why college cost is rising and enrolment is also rising because people are not able to find a better substitute to it. as there is incresed demand for college education, the institution also has to make arrengements to keter all the students, demand for best faculties and best infrastructure increases which also leads to increases tution fee for college. about hike in enrollment in colleges we can say that as every year a certain group of population is entering into college age and as college education is a mandatory for many jobs now a days, most of the studets are prefering to enter college no matter what the fees is so college enrollment is also increasing.