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Every year since 1998, the College Board has published a new edition of Trends in College Pricing, providing detailed updated information on prices for tuition and fees and room and board at colleges and universities in the United States, as well as other expenses postsecondary students incur. In addition, Trends includes information on enrollment patterns, other aspects of higher education finance, and the net prices students pay after taking grant aid into consideration. This 2008 edition continues that tradition in an expanded and innovative format. The revised and shortened print version of Trends is supplemented by this new Web site that makes detailed tables easily available for reference and downloading.
The print edition of Trends in College Pricing includes our standard table reporting on the change from the last academic year to the current year in the published prices at public four-year, public two-year, and private not-for-profit four-year colleges and universities. We also continue the recent innovation of including prices for out-of-state students at public four-year institutions and students at for-profit institutions. This year we report published prices separately for doctorate-granting, master’s, and baccalaureate institutions. However, all other tables have been moved online, allowing the print edition to focus on easy-to-read graphics that illustrate and summarize much of the information in the detailed tables available on the Web site. The text accompanying the graphics and tables provides insights into and highlights of the data depicted.
Trends in College Pricing reports on changes in published prices over time and on variation in those prices within sectors and across regions of the United States. This information is very important, but conclusions about how affordable college is must rest in addition on an understanding of changing levels and patterns of family incomes and of the financial return to higher education. Moreover, it is the net price that a student actually pays, not the published price charged by his or her institution, that determines the financial burden.
This year’s innovations in Trends in College Pricing are paralleled by changes in its companion publication, Trends in Student Aid, which provides detailed up-to-date information on the sources, forms, and amounts of financial aid available to assist students and families paying for postsecondary education. Although the latest data available for Trends in Student Aid are for the 2007-08 academic year, Trends in College Pricing includes information on published prices for the 2008-09 year.
College prices have become a subject of attention not only in state legislatures, but also in Congress. The reauthorization of the Higher Education Act signed into law in August 2008 contains new reporting requirements for colleges and universities relating to both published and net prices. According to the legislation, beginning in 2011, the Department of Education will publish lists of the 5% of institutions in each of nine categories that charge the highest tuition and fees, that have the highest average net price, and whose tuition and fees, both published and net, increase by the largest percentages over three years. These lists, along with those of the lowest-priced institutions, will be made public and institutions with the largest increases will be required to provide information about why they have raised their prices and how they plan to constrain future price increases. The federal government will also publish state-by-state information about funding for higher education, as well as tuition and fees and student aid at public colleges and universities.
The precise definition of net price that will be used is yet to be determined. However, the increasing focus on net price, as opposed to just published prices, is also reflected in the mandate that the Department of Education provide students with a tool to estimate what they will actually pay at individual institutions and that each institution provide such a calculator.
The College Board began publishing Trends in Student Aid in 1983, and Trends in College Pricing has been estimating net prices since 2003. The definition of net price on which we rely is the average price paid by all full-time students—including those who do and do not receive student aid. We report on the various sources of aid in Trends in Student Aid and subtract grant aid from all sources, in addition to federal tax credits and deductions, in calculating overall net price for Trends in College Pricing. Although it is generally the published prices that make headlines, it is the net prices paid by individual students that matter most for college access and affordability.
The published prices on which the analyses in Trends in College Pricing are based come from data reported by institutions on the College Board’s Annual Survey of Colleges. This survey is distributed to about 3,500 postsecondary institutions across the country, collecting a wealth of data on enrollment, admissions, degrees and majors, tuition, financial aid, and other aspects of undergraduate education.
The data confirm the widespread perception that published college prices are rising more rapidly than the prices of other goods and services. This is not a new phenomenon, but one that has persisted over the entire 30-year period documented here. Annual percentage increases in tuition and fees consistently receive most of the attention, but a number of other aspects of college pricing have a greater impact on access and affordability.
Average net prices have declined quite consistently at public two-year colleges, although increases in living costs have prevented those decreases in tuition and fees from being reflected in total costs of attendance. Average net tuition and fees at public four-year colleges and universities declined in inflation-adjusted dollars in the late 1990s and the early part of the current decade, but have been rising since.
Changes in average published prices or in average net prices do not necessarily describe the circumstances facing individual students. There is considerable variation in prices across sectors and across states and regions, as well as among institutions within these categories. College students in the United States have a wide variety of educational institutions from which to choose and these come with many different price tags. One of the problems many students face is how to make sense of all the options and complex pricing structures.
The scenario is even more complicated because of the wide variety of student aid programs and policies and because of changes over time in the distribution of student aid among students. A decline in the average net price at public four-year colleges in a particular state or at an individual private institution should make education more affordable. But if at the same time grant aid migrates from low- and moderate-income students to wealthier student-athletes or merit scholars who have less financial need, more students will actually struggle to pay for college.
In considering the impact of price increases, it is accumulated patterns, not one-year changes, that determine current charges. Relatively low prices may rise rapidly in percentage terms without causing significant difficulties, while even freezing high prices does not put them within reach of the typical student. Current prices and dollar increases, not percentage increases, best measure the impact on students and families.
Moreover, tuition and fees tell only part of the story. For many students it is the additional costs associated with college attendance, including room and board, books, and other expenses, as well as forgone earnings, that present the greatest financial barriers.
This report contains information that can provide insight into the underlying causes of rising tuition and fee charges, but it does not attempt to provide a comprehensive explanation. A thorough analysis of this vital issue would require better data than those available to us on the expenditure patterns of colleges and universities over time, as well as careful empirical analysis of all of the contributing forces. It is clear that the efficiency of campus operations, changes in nontuition revenues, the prices of the goods and services educational institutions purchase, the nature and extent of the services and facilities provided, the academic preparation of the students who enroll, the level of demand for a particular institution, and competition among institutions all contribute to the rate of price increase. If college education is to become more affordable for more students, institutions will have to find ways to offer high-quality higher education in a more cost-effective manner and state and federal governments will have to improve their systems for supporting both postsecondary institutions and the students they educate.
Trends in College Pricing 2008 presents detailed data on public two-year and four-year and private not-for-profit four-year institutions for the 2008-09 academic year. Comparable information about the growing for-profit sector of postsecondary education, which enrolls about 7% of all undergraduate students, is not available. We do provide an estimate of the average charges at for-profit institutions, but because of the relatively small sample of those institutions from which we are able to collect data, it is important to interpret that information with extreme caution.
The tuition and fees and other charges reported in Trends apply to full-time undergraduate students. About 36% all undergraduates and about 61% of those attending public two-year colleges are enrolled part-time. Because of the variety of enrollment and pricing patterns, it is not possible to provide estimates of the charges facing these students that would be as accurate as the information we provide about full-time students. Data on full-time charges provide the best basis for comparison both over time and across sectors. Many institutions charge different prices depending on year or program of study, even for full-time students. The prices included in Trends represent best estimates of average prices for all full-time undergraduate students.
Another important aspect of estimating the price of a college education is that many students take longer than two years to earn an associate degree or longer than four years to earn a bachelor’s degree. An accurate comparison of the price of one institution or type of institution to another involves incorporating the expected time to degree in addition to the annual price of attendance. The prices we report are prices for one academic year.
Some of the graphs and tables here focus only on tuition and fee charges, but we also report room and board charges for residential students, living costs for commuter students, and other components of student budgets. Because tuition and fees are relevant for all enrolled students, they are easiest to compare. However, whether students live on or off campus, they all must also pay for housing and food, buy books and supplies, and cover transportation and other basic living costs. While some students are able to live with family, and not all living costs are attributable to attending school, the cost of living poses a significant hurdle to many students. Even those who receive grant aid sufficient to cover tuition and fee charges may struggle to cover living expenses. It is not so much the prices charged by institutions that create the burden for these students, but the very real costs students incur to support themselves and their families while they are in school. It is also important to remember that for many students, the largest component of the cost of being a student is actually the result of devoting time to schooling rather than to the labor market. Forgone earnings are not addressed here.
While the information reported here provides a best approximation of trends in college charges over time, we would caution readers about placing too much reliance on either precise dollar amounts or precise annual percentage changes. Each year we revise the average prices calculated the previous year to account for corrected data we receive from institutions and to provide an enrollment-weighted average based on the most recent available data on the number of full-time students attending each institution. If over time increasing numbers of students were to choose to enroll in the lower-priced institutions within a sector, our measure of the average price increase would be lower than if enrollment were stable. Details relating to our methodology and to other technical issues and data reliability can be found at the end of the report, in the Notes and Sources section.
We hope readers will find the new format of the Trends publications valuable. Please feel free to cite or reproduce the data in Trends for noncommercial purposes with proper attribution.