A Year of College Cost 5 Ounces of Gold in 1913. Now It Costs 2.4.

Student debt in America sits at $1.77 trillion. The average college graduate carries $30,000 in loans. Parents co-sign debt and take out second mortgages. Student loan default is the fastest-growing form of debt delinquency in the country. If you follow education news, you already know the refrain — college is broken, it's unaffordable, it's the defining financial burden of a generation. The crisis feels uniquely modern and uniquely severe.

The numbers certainly look that way. In 1913, the first year the Federal Reserve set monetary policy, a year at a public state university cost about $100 — roughly 5 ounces of gold at $20.67 per ounce. A private university was about $300, or around 14.5 ounces. In 2026, in-state public tuition averages about $11,000 per year — roughly 2.4 ounces of gold. A private university runs about $50,000, or roughly 10.9 ounces.

So in gold terms, a state university education has actually gotten substantially cheaper (5 oz to 2.4 oz). And private university tuition has risen — but less dramatically than you'd expect from the dollar figures. From 14.5 to 10.9 ounces. And the sticker shock in dollars? Most of the 300-fold increase is the dollar collapsing, not universities genuinely gouging.

But there's a real story here that the dollar obscures and gold reveals. Unlike housing and food — which were stable or cheaper in gold terms — the private university did get genuinely more expensive. That real increase points to something that happened inside American education that dollars alone can't explain.

The raw numbers

Let's start with the data. The table below shows the annual tuition at three moments in history, expressed both in dollars and in ounces of gold. For 1913, I've used the typical cost of a private university. For 1970, I've used the era before massive federal student aid inflation. For 2026, I've shown both the in-state public average and the sticker price at a flagship private university. The sources are the National Center for Education Statistics, College Board historical surveys, and LBMA gold prices.

Year	Annual Tuition (USD)	Gold / oz	Tuition in Gold (oz)
1913	$300	$20.67	14.5
1970	$1,500	$35.00	42.9
2026 (in-state avg)	$11,000	~$4,600	~2.4
2026 (private sticker)	$50,000	~$4,600	~10.9

The dollar numbers tell the familiar story: $300 to $1,500 to $11,000 to $50,000. The trajectory is relentlessly upward. Every generation pays more in nominal dollars than the last.

The gold numbers tell a stranger story. We see 14.5 ounces, then a spike to 42.9 ounces in 1970 — the same Bretton Woods distortion we saw in the housing essay. But here's the crucial difference from housing: in 2026, the picture is mixed. An in-state public university at 2.4 ounces is actually much cheaper than 1913 (5 oz), making it one of the few services that got dramatically cheaper in real terms. But a private university at 10.9 ounces represents a decline from 14.5, yet still shows there's something real going on beyond just currency debasement. The story is more nuanced than a simple "education got expensive" narrative.

But these numbers deserve unpacking. Public college got cheaper in gold. Private college got somewhat cheaper too, yet there's a real story here about institutional change that monetary debasement alone doesn't explain. And to understand that story, we need to look at what "college" actually was at each of these three moments.

What "college" actually meant

In 1913, going to college was unusual. About 5% of American 18-year-olds attended. A college education was still understood as something for the wealthy, the clergy, or the intellectually exceptional — not a prerequisite for ordinary adulthood. The buildings on campus were libraries and classrooms. Professors were hired to teach; their research output was secondary. A diploma was proof of something rare: that you'd acquired deep knowledge of a difficult subject from an expert.

There were no student loans. You paid cash, worked part-time, or attended a nearby institution and lived at home. The government didn't subsidize education, so universities couldn't raise prices beyond what families and students could afford to pay. The constraint was real. If tuition got too high, enrollment dropped and revenue fell. Universities competed on the quality of instruction, not amenities. The median curriculum was four years of heavy work in Greek, Latin, mathematics, and philosophy.

By 1970, college had become respectable. The GI Bill had shown that education could be mass-distributed. Community colleges were expanding rapidly. About 25% of high school graduates were attending some form of higher education. The federal government had begun guaranteeing student loans through the Higher Education Act of 1965, opening access to families that couldn't save cash down payments. Universities were growing, and they were growing fast. The buildings on campus now included student centers, dormitories, gymnasiums, and dining halls. Teaching was still the primary function, but research was becoming more valued. You could still pay for a year of public university with a summer job, though it was getting harder.

By 2026, college had become mandatory. Employers requiring a bachelor's degree for entry-level positions that once needed only a high school diploma had become standard. About 68% of high school graduates were attending college. This meant the entire spectrum of intellectual ability — not just the exceptional — was now expected to earn a degree. The physical campus had transformed completely. Modern universities are sprawling enterprises with luxury dormitories, Olympic-quality recreation centers, climbing walls, high-end dining options, elaborate mental health and counseling services, diversity and inclusion offices, Title IX enforcement departments, and administrative bureaucracies that dwarf the faculty.

The ratios tell the story. In 1975, there was roughly one administrator per 50 students. By 2020, that ratio had shifted to roughly one administrator per 21 students. Meanwhile, the student-to-faculty ratio remained roughly constant. Universities didn't hire more teachers relative to growth. They hired administrators. A lot of them.

More importantly, what you get for your tuition has changed completely. In 1913, you got instruction. In 2026, you get a lifestyle experience, a credentialing service, a sorting mechanism for the labor market, and a four-year hold on your life and $30,000 to $100,000 of future earnings. You get a degree that no longer signals exceptional knowledge (because 70% of people now have one), but instead signals that you are trainable, can follow rules, and have access to capital and time. That's the shift. And it costs real money.

Why college actually got more expensive

Unlike housing and food, gold reveals that college tuition had a genuine real-price increase. The dollars are hiding something real, not just monetary decay. There are three concrete causes.

The Bennett Hypothesis

In 1987, William J. Bennett, then Secretary of Education, wrote an op-ed in The New York Times titled "Our Greedy Colleges." His observation was straightforward: as the federal government made more student aid available, colleges raised their prices. They didn't lower prices to help poor students attend. They captured the aid as revenue. Bennett noted that tuition increases closely tracked increases in federal student aid, dollar for dollar.

The mechanism is simple. A student can borrow up to a federally-guaranteed limit. If that limit is $5,000 per year, the university knows students can afford up to $5,000. They raise tuition to $5,000. Congress approves $6,000 in aid. Universities raise tuition to $6,000. The aid becomes invisible to the student, who still has to borrow the full amount and repay it, but the university captures it as unrestricted revenue.

This isn't speculation. Researchers at the Federal Reserve Bank of New York and elsewhere have studied the Bennett Hypothesis empirically, and the data confirms it: each additional dollar of subsidized federal student loans correlates with roughly 60 cents of additional tuition increase. The elasticity is high. College is one of the few markets where increasing the supply of cheap credit directly inflates the price for everyone. It's what happens when you subsidize demand without constraining supply.

Administrative bloat

Universities have hired at unprecedented rates, but not teachers. Between 2000 and 2020, as full-time faculty grew by about 2%, full-time administrative staff grew by about 60%. Today, at many universities, there are more administrators than faculty. The Chronicle of Higher Education reports that roughly 30% of college operating budgets now go to administration and overhead, compared to about 25% in 2000.

What are all these administrators doing? Diversity and inclusion, Title IX compliance, mental health services, student conduct boards, accreditation documentation, fundraising, marketing, risk management, assessment and accountability reporting. These are real functions. Most of them didn't exist in 1970 or 1913. They exist because the expectations on universities have expanded — they're now expected to be daycare, social workers, psychiatrists, and social engineers as well as educators.

Some of this is lawsuit-driven. Title IX created new compliance costs. Disability rights laws require accommodation bureaucracies. Other costs are self-inflicted. Universities compete on amenities and experiences, not just education. They build luxury dormitories, fancy dining facilities, elaborate recreation centers. A major state university might now have a climbing wall, a lazy river, and gourmet food courts in the student center. These cost real money.

The credentialism arms race

In 1913, a bachelor's degree was rare enough that it was a genuine market signal. If you had one, you'd likely attended one of a handful of elite institutions or had studied under notable scholars. Employers could trust that the degree meant something about your capabilities. The signal was clean.

As more people got bachelor's degrees, each individual degree signaled less. By 2000, a bachelor's degree had become the new high school diploma — necessary but not sufficient for most professional careers. So educated people responded by spending more time in school. Master's degrees proliferated. Professional certifications became mandatory. PhD programs expanded. Everyone needed one more degree, one more credential, one more way to differentiate themselves in an increasingly credentialed field.

This is the credentialism arms race. It's not that everyone got smarter or that the economy needed more skills. It's that the signal of education became diluted, so everyone had to buy more education just to stay in the same relative position. From the student's perspective, it was a rational investment. From the system's perspective, it's a tragedy of the commons. Resources are spent sorting and re-sorting people by educational credentials, rather than actually increasing their capabilities or creating value.

The cost effect is huge. A student in 1970 could compete for most jobs with just a bachelor's degree. A student in 2026 often needs a bachelor's degree plus certifications, internships, graduate coursework, or an advanced degree. They're spending more years in school, taking on more debt, and producing more revenue for universities in the process. Gold reveals the genuine increase: colleges captured some of the value of credentialism by charging for it.

The student loan trap in real gold

Here's where the story gets important: the absolute debt load tells a lie, but the structure of debt tells the truth.

A typical 1970 college graduate with four years of $1,500 annual tuition had accumulated $6,000 in debt. At the official $35/oz gold price, that was 171 ounces of gold. But the real market price of gold was much higher — roughly $80 to $100 per ounce. So in real gold terms, a $6,000 debt was equivalent to 60 to 75 ounces.

A typical 2026 graduate with four years of $11,000 annual tuition carries $44,000 in debt. At $4,600/oz, that's about 9.6 ounces of gold. Measured in actual gold, a 2026 graduate owes far, far less than their 1970 counterpart — less than one-sixth the real debt burden.

But here's the trap: the 1970 graduate entered a labor market where a bachelor's degree was valued precisely because it was rare. Their degree was expensive in absolute terms (in gold), but it was worth even more in the job market. The signal was powerful. They could pay it back relatively quickly with a good job.

The 2026 graduate owes less gold-denominated debt, but their degree has been diluted through credential inflation. 70% of their cohort has one. Employers now require not just a degree but internships, certifications, graduate coursework, or a master's degree. The graduate has to spend another two years in school to differentiate themselves. They end up with $70,000 to $90,000 in debt instead of $44,000. And the degree itself buys less in the job market than the 1970 degree did.

The double squeeze is real: tuition costs more in absolute terms (even if not in gold), and the value of the degree has fallen. The student pays more and gets less job-market value. That's the crisis that mainstream economics misses because it's thinking in dollars. Gold reveals it: yes, college is more expensive, and yes, it's also less valuable. Those are two separate problems, and they're not the same as monetary inflation.

Gold can't tell you whether college is worth it. But it can tell you how much of the sticker shock is real and how much is the dollar lying to you.

What it means now

This essay's lesson is different from the first two essays in this series. Housing and food were stable or cheaper in gold — those "crises" are really crises of the dollar losing value. College tells a more complex story. Public university has actually gotten cheaper in gold terms, alongside housing and food. But private university shows signs of genuine cost increase, even after removing currency debasement. That increase has causes: federal student aid inflating demand without constraining supply, administrative bloat, the credentialism arms race, and the shift from education as knowledge transfer to education as credentialing and sorting.

When you hear "A degree costs $100,000," about $97,000 of the increase from 1913 is the dollar's debasement. The remaining $3,000 (in 1913 purchasing power) is harder to pin down: some of it comes from federal student aid capture, some from administrative overhead, some from the shift in what a degree signals and costs to produce. Gold helps you see that most of the sticker shock is monetary noise. But it also reveals that unlike housing and food, education didn't win as decisively against currency debasement. That gap itself is the story worth investigating.

The monetary problem can only be solved by a more stable currency. The institutional problem is harder, and more local. It would require universities to cut administrative overhead, stop competing on amenities and student lifestyle experiences, constrain their own pricing power, and return to a focused mission: teaching. Or it would require credentialism to collapse, which would only happen if employers stopped using degrees as sorting devices. Neither seems likely soon.

The practical implication for individuals is harsh: evaluate college on its real merits, not in dollars. Will this degree buy you access to a job that genuinely pays more? Or will you be one of many degree holders competing for positions that already assume everyone has one? In gold terms, will you recover the real cost you're paying? And do you actually need this, or are you caught in the credentialism arms race just to keep up? Gold can't answer those questions. But it can strip away the dollar's noise and show you what's really being priced, so you can make a more honest decision.

This is the third essay in The Great Remember's series on prices, purchasing power, and the history of money. Previous: housing and food in gold. Next: what happened to the penny—and what it tells you about the smallest unit of money. See all essays →