Escalating student costs and the challenge of educational equity: A comparative index analysis of expenditure in Balangir (2020-2026)

Introduction

Education is widely recognized as the most powerful instrument for social and economic transformation. Access to quality higher education, however, is increasingly contingent on economic affordability. As the cost of living continues to rise in India, the financial burden on students pursuing higher education has intensified significantly. Understanding the dynamics of student expenditure and its change over time is essential for policy formulation aimed at making higher education accessible to all sections of society. Index numbers are among the most powerful statistical tools for measuring and comparing changes in variables over time. They allow economists, researchers, and policymakers to quantify changes in price levels, cost of living, and economic conditions in a standardized manner. Applied to the domain of educational expenditure, index numbers provide a systematic framework for understanding how the financial burden of education has evolved over time. This study focuses on Balangir district, a region in western Odisha characterized by moderate urbanization, significant tribal and marginalized population, and growing demand for higher education. Rajendra University, Balangir is the primary higher educational institution in the region, enrolling thousands of students annually from diverse socioeconomic backgrounds. The university attracts students from both urban and rural areas of the district and neighboring regions. The period from 2020 to 2026 has been marked by several economic disruptions including the COVID-19 pandemic and its aftermath, supply chain disruptions, inflationary pressures, and policy changes in higher education. These factors have collectively contributed to significant

The majority of students enrolled at Rajendra University are from first-generation learner backgrounds, belonging to scheduled caste, scheduled tribe, and other backward class categories. A significant proportion of students come from families dependent on agriculture or small trades, making the cost of higher education a critical concern. The town of Balangir offers limited off-campus accommodation options, and the prices of essential commodities and services have risen substantially in recent years, reflecting broader national trends.

About the data

The data for this study consists of average monthly expenditure amounts per student for each of the seven identified expenditure categories, for the base year 2020 and the current year 2026. Primary data were collected through structured questionnaires administered to a representative sample of students from Rajendra University, Balangir, across various disciplines, years of study, and residential statuses (hostellers and day scholars).

Characteristic

Significance of the study

The significance of this study lies in its direct relevance to educational policy, student welfare, and the broader goal of equitable access to higher education. Educational affordability is not merely an economic concern-it is a social justice issue that determines who gets to participate in and benefit from higher education. By quantifying changes in student expenditure using rigorous statistical methods, this study contributes to the evidence base needed for informed policy decisions.

For university administrators and policymakers at the state level, the findings of this study provide concrete data on the rising cost of being a student in Balangir, which can inform decisions about scholarship programs, hostel fee structures, and student welfare schemes. For national policymakers, the findings contribute to the broader discourse on higher education financing in India and the need for targeted interventions to support students from economically weaker backgrounds.

From a methodological standpoint, this study demonstrates the application of index number analysis to a non-traditional domain --educational expenditure --which has been less explored in the Indian context compared to the more common applications to commodity prices and industrial production.

Review of literature:

This chapter presents a comprehensive review of the theory and applications of index numbers, as well as the literature on student expenditure patterns, educational costs, and affordability in India and globally.

Theoretical Foundations of Index Numbers

Laspeyres (1871): Etienne Laspeyres introduced the baseyear weighted price index in 1871, which became one of the most widely used index number formulas worldwide. The Laspeyre's index uses base year quantities as weights, making it straightforward to compute but potentially overstating inflation because it does not account for consumer substitution behavior when prices change. In the context of student expenditure, the Laspeyre's index measures how much more students would need to spend in the current year if they maintained exactly the same consumption pattern as the base year. This makes it a useful upper-bound estimate of the change in the cost of student living.

Paasche (1874)

Studies on Student Expenditure and Educational Costs in India

Several studies have examined the rising cost of higher education in India and its implications for access and equity.

The National Sample Survey Office (NSSO) has periodically conducted surveys on household expenditure on education, providing valuable data on how the financial burden of education has evolved over time across different states and socioeconomic groups. The 71st Round of the NSSO (2014) on Social Consumption --Education found that the average expenditure on higher education per student had increased dramatically over the previous decade, with significant variation across states and income groups.

Studies focusing on Odisha's higher education sector have highlighted the particular challenges faced by students from tribal and rural backgrounds. Research by the Odisha Higher Education Department has noted that while the state government has implemented various scholarship and financial assistance programs, the rising cost of livingparticularly accommodation and food-often places significant financial pressure on students from low-income families. The introduction of self-financing courses has also added to the financial burden on students in recent years.

Pal and Ghosh (2007) examined the socioeconomic dimensions of higher education costs in India, noting that the privatization of education and reduction of government subsidies had contributed to a sharp rise in the out-of-pocket costs of higher education. Their study emphasized the need for more comprehensive data collection and analysis of student expenditure patterns at the institutional and district levels.

Educational Affordability and Policy

The concept of educational affordability encompasses both the direct costs (tuition fees, examination fees) and indirect costs (accommodation, food, transport, stationery, and other living expenses) associated with higher education. Research globally has shown that indirect costs often constitute a larger proportion of total student expenditure than direct academic costs, particularly in institutions where tuition fees are subsidized.

The All India Survey on Higher Education (AISHE) conducted annually by the Ministry of Education provides aggregate data on higher education enrollment and institutional finances but does not capture individual student expenditure patterns in detail. This gap in the literature at the micro level-particularly for smaller institutions and districtsunderscores the relevance of the present study.

Research by Tilak (2004) highlighted the increasing commodification of education in India and the growing financial burden on students and families. His analysis of trends in educational expenditure showed that the proportion of household income devoted to education had risen substantially, with a particularly sharp increase in higher education costs. These trends have continued and intensified in the period following 2020, partly due to the economic disruptions caused by the COVID-19 pandemic.

Post-COVID Economic Impact on Student Expenditure

The COVID-19 pandemic (2020-2022) had profound and lasting effects on the Indian economy, including significant impacts on the cost of living and patterns of student expenditure. The pandemic disrupted supply chains, led to job losses in the informal sector, and caused significant price increases in essential commodities. Many students who had been relying on part-time employment to support their education found that these income sources had dried up. The post-pandemic period (2022 onwards) saw a sharp increase in prices of food items, fuel, and essential services, driven by global inflationary trends and domestic supply disruptions. For students in Balangir, these increases were particularly felt in the categories of food and groceries, accommodation (rent), and transport-the largest components of student expenditure.

Studies conducted by various university student welfare departments across India during 2022-2024 documented significant increases in student expenditure, with many students reporting financial distress and reduced consumption of nutritious food. The present study contributes to this body of literature by providing a rigorous quantitative analysis of expenditure changes using index number methods.

Research Gap

A review of existing literature reveals a notable gap in rigorous quantitative studies of student expenditure patterns using index number analysis, particularly at the district or university level in smaller cities and towns of Odisha and eastern India. Most existing studies on educational costs in India use aggregate or household-level data and focus on total education expenditure rather than the composition and relative changes in different expenditure categories faced by students. The present study aims to fill this gap by applying established index number methodology to the specific context of student expenditure in Balangir.

Methodology 3.1 index numbers-definition and types

An index number is a statistical measure used to represent the changes in a variable or a group of related variables over time or across space. The base period is assigned an index value of 100, and changes in subsequent periods are expressed as percentages relative to this base. In this study, index numbers are used to measure and compare changes in student monthly expenditure across seven categories between the base year 2020 and the current year 2026.

Notation used throughout this study  P0= Average monthly expenditure per student in the base year (2020)  P1= Average monthly expenditure per student in the current year (2026)  Q0= Quantity/volume index in the base year (standardized to 1.0 for each category)  Q1= Quantity/volume index in the current year (standardized to 1.0 for each category)  W= Weight assigned to each expenditure category based on its relative importance  PR= Price Relative = (P1/P0) x 100 Since the study focuses on average monthly expenditure per student (a single quantity per category), the quantity indices Q0 and Q1 are both set to 1.0, making the expenditure index equivalent to a price index in this context.

Simple aggregate expenditure index

Formula: P01 = (ΣP1 / ΣP0) x 100

The simplest method --the ratio of the sum of current year expenditures to the sum of base year expenditures, multiplied by 100. This method gives equal importance to each expenditure category regardless of its actual share in total student expenditure. It is sensitive to the absolute levels of expenditure in different categories and does not account for the relative importance of each category.

Simple average of expenditure relatives

Formula: P01 = (1/n) x Σ(P1/P0 x 100) This method first computes the price relative (the ratio of current to base year expenditure x 100) for each category, and then takes the arithmetic mean of these relatives. It is less affected by extreme values and the absolute levels of expenditure in individual categories. All seven categories receive equal weight in this method.

Laspeyre's expenditure index

Formula: L = [Σ(P1 x Q0) / Σ(P0 x Q0)] x 100 Laspeyre's index uses base year quantities (Q0) as weights. In this study, since Q0 = 1 for all categories, it simplifies to the weighted sum of current year expenditures using base-year proportional weights. The Laspeyre's index tends to overestimate the true expenditure increase because it does not account for substitution-students switching to less expensive alternatives when costs rise in a particular category.

Paasche's expenditure index

Formula: P = [Σ(P1 x Q1) / Σ(P0 x Q1)] x 100 Paasche's index uses current year quantities (Q1) as weights. Since Q1 = 1 in this study, it provides the current year weighted comparison. The Paasche's index tends to underestimate the true expenditure increase because it uses the current period's consumption pattern, which has already adjusted to higher prices. Requires current year quantity data, which in this study is directly available from the survey.

Fisher's ideal index

Formula: F = sqrt(L x P) Fisher's Ideal Index is the geometric mean of Laspeyre's and Paasche's indices. It is considered the theoretically ideal measure as it corrects for the biases of both the Laspeyre's (upward bias) and Paasche's (downward bias) indices. Fisher's index satisfies both the Time Reversal Test and the Factor Reversal Test, making it the most reliable single measure of expenditure change.

Marshall-edgeworth index

Formula: ME = [Σ{P1(Q0+Q1)} / Σ{P0(Q0+Q1)}] x 100

The Marshall-Edgeworth index uses the average of base year and current year quantities as weights. This provides a practical balance between the Laspeyre's and Paasche's approaches and typically gives results very close to Fisher's Ideal Index. It requires data from both years, making it more informative than either Laspeyre's or Paasche's alone.

Dorbish-bowley index

The Dorbish-Bowley index is the arithmetic mean of Laspeyre's and Paasche's indices. It is simpler to compute than Fisher's geometric mean but does not satisfy the Factor Reversal Test. However, it serves as a useful approximation and comparison benchmark. In practice, it typically gives values very close to Fisher's Ideal Index when L and P are close to each other.

Weighted average of expenditure relatives

Formula: WAPR = Σ(W x PR) / ΣW This method assigns explicit weights (W) to each expenditure category based on its relative importance in the student's consumption basket. In this study, weights are assigned based on the average proportion of total expenditure represented by each category (as a percentage, summing to 100). This method gives more importance to categories that constitute a larger share of total student expenditure, making it particularly relevant for policy analysis.

Tests of adequacy

Analysis and results

4.1 Data description: Table 1 presents the average monthly expenditure per student in each of the seven categories for the base year 2020 and the current year 2026, along with the assigned weights for each category. The weights reflect the relative importance of each expenditure category in the total student consumption basket, derived from the survey data.

Interpretation

The sum of all expenditure categories increased by 71.21% between 2020 and 2026 according to the Simple Aggregate method. This method treats all categories equally regardless of their actual importance in the student's budget.

Simple Average of Expenditure Relatives

SAER = (ΣER) / n = 1251 / 7 = 178.71

Interpretation:

The arithmetic average of individual category expenditure relatives is 178.71, indicating that on average across the seven categories, expenditures have increased by 78.71% relative to 2020. Interpretation: The Weighted Average Index of 174.22 gives greater importance to categories with higher weights (Food: 30%, Rent: 25%, Academic Fees: 15%). This is perhaps the most policy-relevant measure as it accounts for the actual importance of each expenditure component in a student's budget.

Laspeyre's Expenditure Index

Comparison of all index methods

Trend analysis (2020-2026)

To understand the trajectory of student expenditure increase over the full study period, a year-wise trend analysis was conducted. Table 5 presents the estimated annual expenditure indices for the period 2020 to 2026, constructed using the Laspeyre's formula with 2020 as the base year. The trend analysis reveals a consistent and progressive increase in student expenditure index from 100 (base year 2020) to 171.21 in 2026. Several key patterns emerge from this analysis: First, the rate of increase accelerated significantly after 2021, corresponding to the post-pandemic economic recovery period when prices of food, fuel, and other essential commodities rose sharply due to supply chain disruptions and increased demand. The student expenditure index rose by approximately 12.4 points between 2020 and 2021, reflecting immediate pandemic-era cost pressures, and then by progressively larger amounts in subsequent years. Second, the student expenditure index consistently exceeds the general Consumer Price Index for Odisha throughout the study period. This divergence suggests that the basket of goods and services consumed by students has experienced faster price increases than the general population's consumption basket. This is likely because students are more exposed to the rental market (where prices have risen sharply) and have less flexibility to substitute cheaper alternatives. Third, the trend shows no signs of deceleration as of 2026, indicating that the affordability challenges for students in Balangir are likely to persist and possibly worsen in the near future without targeted policy interventions.

Category-wise analysis

Table 6 presents a detailed category-wise breakdown of student expenditure for 2026, showing both the absolute amounts and the percentage share of each category in total monthly expenditure.

Trend Analysis:

The student expenditure index shows a consistently rising trend over the entire 2020-2026 period, with the rate of increase accelerating after the COVID-19 pandemic. The student expenditure index has consistently exceeded the general Consumer Price Index, indicating that students face a higher rate of cost increase than the general population.

Structural Changes:

There has been a discernible shift in the composition of student expenditure, with Rent and Transport increasing their share of total expenditure while the relative share of Stationery has declined.

Conclusions

The findings of this study lead to several important conclusions about educational affordability in Balangir. The dramatic increase in student monthly expenditureapproximately 71% according to the most reliable index (Fisher's Ideal Index)-represents a significant erosion of educational affordability over the six-year study period. This increase far exceeds the rate of increase in the general cost of living and substantially outpaces the growth in most scholarship amounts and family incomes in the region. The disproportionate increase in rental costs is particularly concerning, as it reflects a structural problem-the insufficient supply of affordable student accommodation-that cannot be addressed by students themselves and requires institutional and government intervention. The sharp increase in transport costs is similarly driven by external economic factors (fuel prices, urban expansion) beyond the control of individual students.

The increase in Academic Fees, while smaller in relative terms compared to Rent and Transport, has direct implications for educational access and equity. Fee increases disproportionately affect students from economically weaker backgrounds who are less able to absorb additional costs. The study's findings suggest that the cumulative effect of increases across all expenditure categories may be forcing some students to reduce essential expenditures (food, health) or drop out of education altogether. The consistent finding across all eight index number methods that student expenditure has increased by well over 50% in six years-dramatically outpacing growth in scholarship amounts and family incomes in the region-underscores the urgency of addressing educational affordability as a policy priority in Balangir and similar regions of Odisha.

Recommendations

Based on the findings and conclusions of this study, the following recommendations are made to improve educational affordability for students in Balangir:

Expansion of University Hostel Facilities: Given that Rent constitutes the highest expenditure category and has shown the steepest proportional increase, the most impactful intervention would be the construction of additional university hostel facilities at subsidized rates. Rajendra University should prioritize the expansion of affordable oncampus accommodation, targeting students from low-income families. Government funding should be sought under centrally sponsored schemes for this purpose.

Enhanced and Indexed Scholarship Programs:

The state government should review and substantially enhance the amounts provided under existing scholarship schemes for students at Rajendra University. More importantly, scholarship amounts should be indexed to the student expenditure index so that they keep pace with the rising cost of student living. The current fixed amounts are increasingly inadequate given the documented expenditure increases.

Student Transport Support:

The university and local government should explore options to provide subsidized transport for students, including dedicated university bus services and negotiated discounts with local transport providers. Rising transport costs are a significant barrier for students who cannot afford on-campus accommodation.

Fee Rationalization: The University should review its fee structure with a view to keeping fee increases in line with household income growth in the region rather than general inflation. Fee waivers and deferred payment options should be made more readily available for students from economically weaker backgrounds.

Mid-Day Meal or Subsidized Canteen Services: Given that Food and Groceries constitute the largest absolute expenditure category, the university should consider establishing or expanding subsidized canteen facilities to help reduce the food expenditure burden on students. On-campus food availability at controlled prices can significantly reduce a student's need to spend on market-rate food.

Regular Monitoring of Student Expenditure:

The University should institutionalize an annual survey of student expenditure patterns, allowing for regular monitoring of affordability trends and timely policy responses. The index number framework developed in this study provides a readymade analytical tool for this purpose.

Fisher's Ideal Index for Policy Measurement: Fisher's Ideal Index should be adopted as the official measure of student expenditure change at Rajendra University, given its theoretical superiority and its satisfaction of both the Time Reversal and Factor Reversal tests. This would provide a standardized and defensible basis for adjusting scholarship amounts and fee structures over time.

Scope for further research

While this study has provided a comprehensive analysis of student expenditure patterns at Rajendra University using index number methods, several avenues for further research remain. A comparative study across multiple universities in Odisha would allow for benchmarking of Balangir's student expenditure levels and identification of regional differences. Longitudinal tracking of a cohort of students over their entire degree program would provide more nuanced insights into how expenditure patterns evolve over the course of higher education.

A disaggregated analysis by gender, caste/community, academic discipline, and residential status (hosteller vs. day scholar) would reveal important variations in expenditure patterns and affordability challenges. Future studies could also explore the relationship between financial stress, academic performance, and student dropout rates, providing a more complete picture of the consequences of rising educational costs.

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