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Costs of College

Is the cost of college tuition going up? The College Board reports that, when adjusted for inflation, average tuition at 4 year public and private institutions more than doubled since 1980. During this time, average family income grew by only 27%, but the financial aid available to full time students grew by 82%.

 

What do these numbers mean? Understanding the costs of college is a very confusing
business, left primarily up to statisticians and researchers. More important is for students considering college is how it affects them. Can they afford to enter and complete a college program?

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There are two important distinctions to be made for all those hoping to understand the costs of college. The first is what is referred to as the 'Net price' of college. The Net price is a term used to describe what it costs students to go to college after subtracting all financial aid of any sort. The 'Sticker price' of college is a term used to describe the price of college charged by institutions.

Recent studies have concluded that whereas the Net price of college has not increased substantially, the Sticker price has.

Consider the following:

  • At public 4 year institutions, the tuition charges (Sticker price) of college rose
    from $4,000 in 1992-93 to $4,800 in 1999-2000

  • At private, non profit research institutions, the Sticker price grew by approximately
    $3,000

  • Over all public institutions, tuition charges overall increased in these years from
    $3,500 to $4,000

Yet, when federal grants are subtracted from the figures above, this increase in
Sticker price was eliminated.

The College Board reports similar statistics with regard to Sticker price as follows:

  • 4 year private institutions - 5.8% increase

  • 4 year public institutions - 9.6% increase

  • 2 year public institutions - 7.9%

These brief statistics demonstrate that although Sticker price has increased over the past decade, the increase in available grant funding has counteracted this increase in terms of what the student pays out of pocket. Undergraduates are more likely than those students working at higher levels to receive institutional grant aid.

  • Undergraduates receiving institutional grant aid increased from 1992-93 levels of 23%
    to 31% in 1999-2000

  • The average amount of the grant aid increased from $4,200 to $4,700.

When considering college, every possible avenue of financial aid should be studied. In the years 2001-2002, over $90 billion dollars was available in student financial aid, with scholarships accounting for an ever growing percentage of that aid, outpacing student loan growth.

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It is increasingly evident that those seeking a college education need to be ever vigilant about securing all possible sources of financial aid.

The U.S. Department of Education
 

 

 

 


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