Introduction

Each year, Trends in College Pricing reports on one-year increases in tuition and fee and room and board prices at colleges and universities across the nation. We report on average national price changes by sector, as well as variation in the price levels and their rates of change across types of institutions and across states. We also clarify the role financial aid plays in reducing the share of those prices students and families actually pay.

But one-year changes tell a small part of the story. What matters to students and families, to colleges and universities, to state and federal governments, and to society as a whole, are longer-term trends. Most students do not plan to go to college for only one year, so they are concerned about price increases over a number of years. And the prices they pay are the result of the compounding of price increases over many years.

2017-18 is a good year to stand back and focus on trends over time because the price increases this year were neither larger than average nor small enough to suggest a new pattern. For a decade, from 2001-02 to 2011-12, we reported one-year price increases in the public four-year sector ranging from 5.7% to 13.3% (before adjusting for inflation). But for the past five years, these institutions have raised their prices by about 3% each year—still greater than the overall rate of inflation. Prices in the public two-year and private nonprofit four-year sectors also continue to rise relative to other prices in the economy, but somewhat more slowly than in previous years.

It is also possible now to see clearly the legacy of student aid policies during the Great Recession. Because of rapid increases in grant aid and tax benefits, particularly in 2009-10 and 2010-11, average net prices declined even in the face of unusually large increases in published tuition and fees. In the public two-year and private nonprofit four-year sectors, average net tuition and fees remain below their levels of a decade ago. But net prices have risen for eight consecutive years for full-time students at public four-year institutions, seven years at public two-year colleges, and six years at private nonprofit colleges and universities.

Rising college prices would not necessarily signal increasing financial strains on students and families if incomes were growing at a healthy pace. But earnings have been slow to recover from the recession. The average income of families in the top 20% was 7% higher (after adjusting for inflation) in 2016 than in 2006. The increases for those who are lower down in the income distribution were smaller, and the average income of those in the lowest 20% remains below that of their 2006 counterparts. Stagnant incomes and rising inequality exacerbate the barriers created by rising college prices.

As documented in Education Pays 2016: The Benefits of Higher Education for Individuals and Society, the payoff of college remains strong and it is actually that payoff that determines whether or not college is affordable. If students can pay for college, repay any loans they take, and still live at a higher standard of living than they would have been able to reach without a college education, college is, in the most meaningful sense, “worth it” financially. Nonetheless, the variation in outcomes and the strains families and students experience during the college years make it imperative that policymakers both on college campuses and in federal and state governments address the issue of rising college prices.

Trends in College Pricing 2017 includes data that can provide insight into the forces underlying increases in the prices students pay for college, including changes in state funding levels and in enrollments, the composition of institutional expenditures and revenues, and the distribution of endowment resources across institutions.

Published Prices for One Year of Full-Time Study

The prices reported in Trends in College Pricing are for one year of full-time study. Many students enroll part time, and prorating these prices does not always give an accurate picture of the published prices that students face, much less of the net prices generated by the grant assistance and tax benefits they receive.

Students might benefit more from focusing on the price of earning a degree, rather than the price of one year of college. But the variation in time to degree and the difficulty of measuring the number of terms for which students pay tuition makes this a challenging task. Among students who began their studies full time at a four-year institution in 2009, 40% had completed a bachelor’s degree at their first institution after four years and 60% had completed a degree after six years (NCES, Digest of Education Statistics 2016, Table 326.10). In other words, among students who earned bachelor’s degrees within six years, one-third took more than four years to do so. Not all of these students paid more than four years of full-time tuition—they may have taken time off or enrolled part time for at least a semester. But for many of those who took longer than four years to earn their degrees, tuition and fees (before accounting for grant aid) were likely to be considerably more than four times the one-year price.

Taking more than two years to earn an associate degree or more than four years to earn a bachelor’s degree has financial implications beyond tuition and fee expenses. Forgone earnings from reduced participation in the labor force constitute the largest portion of the cost of college for most students. The more quickly students earn their degrees, the more time they have to earn college-level wages and reap the financial benefits of postsecondary education. Bachelor’s degree recipients age 25 to 34 had median earnings 71% ($19,497) higher than those with high school diplomas in 2016 (U.S. Census Bureau, 2016 Income Data, Table PINC-03).

Why are Prices Rising?

Trends in College Pricing does not analyze the causes of the rising price of a college education. However, the information in this report, combined with the data in Trends in Student Aid, lays the groundwork for understanding the trends. For example, the data indicate that prices at public colleges and universities rise most rapidly when state and local funding per student is growing slowly or declining. In 2015-16, appropriations per FTE student were 11% lower in inflation-adjusted dollars than they were a decade earlier and 13% lower than they were 30 years earlier. Enrollment has grown rapidly and appropriations have not kept up.

Private nonprofit college prices rise at a steadier pace than public college prices. Trends in College Pricing includes information on the concentration of endowment assets at a small number of institutions in this sector and Trends in Student Aid reports on the increases in institutional grant aid or discounting, but determining the causes of the price trends requires more in-depth analysis.

Published and Net Prices

We estimate that in 2017-18, the average in-state net tuition and fee price at public four-year institutions is about $4,140, compared with a published price of $9,970. Between 2007-08 and 2012-13, growth in financial aid covered the entire published price increases at public two-year and private nonprofit four-year institutions, and most of the increase in the public four-year sector. But between 2012-13 and 2017-18, increases in grant aid and tax credits and deductions for full-time students covered only about 7% of the $730 (in 2017 dollars) increase in published tuition and fees at public four-year institutions and about two-thirds of the $3,770 increase in published tuition and fees at private nonprofit four-year colleges and universities. For public two-year college students, the $200 increase in tuition and fees over these five years was accompanied by a $90 decline in average grant aid and tax benefits.

Averages across sectors conceal considerable variation among students within sectors. As the data in this report indicate, net prices are lowest for low-income students and rise with income. But even within income groups averages do not tell the stories of all students.  The distribution of net prices is more critical for college access than the overall average since there are sharp differences in financial capacity among families and students.

Tuition and Fees Versus Total Charges

In addition to tuition and fees, we report room and board charges for residential students, living costs for commuter students, and other components of student budgets. Whether students live on campus or off campus, they must pay for housing and food, buy books and supplies, and cover transportation and other basic living costs. Many of these expenses are not really additional costs associated with attending college, but are expenses people face whether or not they are in school. The largest real college cost many students face is forgone earnings. It is very difficult to succeed in college while working full time. However, the cost of students’ time is difficult to measure, and we make no attempt to do so in this report. Because students tend to think of living expenses as part of the cost of going to college, and because they must come up with the funds to cover these outlays, it is useful to use these expenses as a proxy for forgone earnings. The cost of living poses a significant hurdle for many students. Even those who receive grant aid sufficient to cover tuition and fee charges may struggle to meet living expenses. It is not so much the prices charged by institutions, but the very real costs that students incur by devoting their time to school and forgoing the income needed to support themselves and their families while in school that create the burden for these students.

Interpreting The Data

Measuring Tuition

A growing number of institutions charge different prices for different years of study and/or for different academic majors. In other words, many students on a campus may face published prices quite different from those reported by institutions in the College Board’s Annual Survey of Colleges. Even more fundamental, the lines between sectors are increasingly blurry as more two-year colleges offer some four-year degrees. For these reasons, the average published prices for each sector that Trends in College Pricing 2017 reports are not precise measures.

Trends in College Pricing 2017 presents detailed pricing data for public two-year and four-year colleges and private nonprofit four-year colleges and universities. Although in the past we have provided estimates of tuition and fees at for-profit institutions, the data are no longer adequate for this purpose. Instead, we report the estimated average price in this sector from last year’s report.

Price Changes

While the information reported here provides a best approximation of trends in college charges over time, we caution readers about placing too much reliance on either precise dollar amounts or annual percentage changes. Each year we revise the average prices calculated the previous year to account for revised data we receive from institutions and for changes in enrollment patterns. Details relating to our methodology and to other technical issues and data reliability can be found at the end of the report in Notes and Sources.

The tables supporting all of the graphs in the Trends publications, PDF versions of the publications, PowerPoint files containing individual slides for all of the graphs, and other detailed data on student aid and college pricing are available at trends.collegeboard.org. Please feel free to cite or reproduce the data in Trends for noncommercial purposes with proper attribution.