Trends in College Pricing

Overview > Introduction

Current economic circumstances have made the issue of rising college prices particularly salient. As Trends in College Pricing 2009 goes to press, family income has been stagnant or has declined at all levels of the income distribution over the past decade and the unemployment rate is approaching 10%. Yet the unemployment rate for individuals with a bachelor’s degree or higher is about half the rate for high school graduates (and the rate for those with some college falls between these two) (Bureau of Labor Statistics, 2009). Median income for families with a householder with at least a four-year college degree is more than $50,000 per year higher (and for those with an associate degree it is $20,000 higher) than for those with only a high school education. A college education is critical to long-term financial security, but feels out of reach to many students and families in today’s economy.

Trends in College Pricing provides extensive data describing the variety of college prices in the United States and tracking those prices over time. It focuses both on published prices and the lower net prices, taking grant aid into consideration, that better represent what students actually pay. It also includes information about college and university finances that can provide some insight into pricing patterns and trends, as well as some of the information on family incomes required to assess affordability. It does not attempt to provide a comprehensive explanation of price trends.

A thorough understanding of the forces affecting pricing would require better data than those available 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, the level of governmental and philanthropic support, 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 particular institutions, and competition among institutions all contribute to the rate of price increase.

If a college education is to become more affordable for more students, institutions will have to find ways to offer highquality 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. The data provided in Trends and the accompanying commentary can inform policymakers, researchers, student advocates and others in their analyses of these issues.

Every year since 1998, the College Board has published a new edition of Trends in College Pricing, providing detailed, up-to-date 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 2008, we introduced a new website that makes data easily available for reference and downloading. All of the graphs and the selected tables included in the print version can also be found online, along with substantial additional information. Go to www.collegeboard.com/trends to access data from both Trends in College Pricing and its companion publication, Trends in Student Aid.

The companion publication, Trends in Student Aid, 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 Trends in College Pricing 2009 provides data for the 2009-10 academic year, the latest data available for Trends in Student Aid 2009 are for the 2008-09 academic year.

Published Prices and Net Prices

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 College Board began publishing Trends in Student Aid in 1983, and Trends in College Pricing has been reporting evidence on net prices since 2003. The published prices on which the analysis in Trends in College Pricing is 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 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 — after subtracting grant aid from all sources in addition to federal tax credits and deductions. Data on prices from the Annual Survey of Colleges and on student aid from Trends in Student Aid allow us to generate new, updated estimates for average net prices by sector each year. Data from the National Postsecondary Student Aid Study (NPSAS), released about every four years, allow us to estimate net prices for students at different income levels. This year we include both analyses of net college prices.

The prices reported here are averages for one year of full-time enrollment. About 37% of 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.

The prices included in Trends represent best estimates of average prices for all full-time undergraduate students. However, a growing number of institutions charge different prices for different years and/or for different programs of study. We are able to incorporate differences in prices by year of study reported to us by individual institutions, but not differences by programs. Another complexity that has developed in recent years is in the division of institutions into the public two-year and public four-year sectors. More and more two-year colleges are offering a small number of four-year degrees or providing course work that leads to four-year degrees awarded on other campuses. While we make every effort to adjust our methodology to accommodate these changes, it is impossible to draw precise lines and to develop exact measures in all cases.

Trends in College Pricing 2009 presents detailed data on public two-year and four-year and private not-for-profit four-year institutions for the 2009-10 academic year. Comparable information about the growing for-profit sector of postsecondary education, which enrolls about 10% of all full-time 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.

Finally, in interpreting college prices, it is important to remember that Trends in College Pricing reports on the price of one year of college. Many students require more than two years of study to earn an associate degree or more than four years of study to earn a bachelor’s degree. It is critical to consider the total price for all years of study when thinking about what is required to pay for college. There is considerable variation across sectors as well as among institutions within sectors in both average time to degree and overall graduation rates.

How College Prices Are Changing

The data in this report 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 affect access and affordability more.

Average net tuition and fees have declined consistently since the late 1990s at public two-year colleges, although increases in living costs have prevented those decreases in net tuition and fees from being reflected in total net costs of attendance. Average net tuition and fees at both public and private not-for-profit four-year colleges and universities declined from 2004-05 to 2008-09, but increased by about 2% in constant dollars in 2009-10.

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. Moreover, different students pay different prices at the same institution. 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 moderateincome 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.

Tuition and Fees Versus Total Charges

Some of the graphs in this report 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 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. 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 in this report.

The Consumer Price Index

We provide much of our data in constant dollars, adjusting values for changes in the Consumer Price Index (CPI). We use the change in the CPI from July 2008 to July 2009 to measure inflation between 2008-09 and 2009-10. While CPI adjustment is necessary to make meaningful comparisons of values over long periods of time, comparisons of one-year changes in constant dollars may be confusing. Large fluctuations in energy prices have led to an unusually volatile CPI recently. The 5.6% increase in the CPI from July 2007 to July 2008 was the highest annual inflation rate since 1982. As a result, constant dollar increases for academic year 2008-09 were small relative to current dollar increases. However, in the most recent year, between July 2008 and July 2009, the CPI declined by 2.1%, which results in constant dollar increases for academic year 2009-10 that are larger than current dollar increases.

A Note on Trends Data

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 patterns were stable. Details relating to our methodology and to other technical issues and data reliability can be found in the Notes and Sources section.

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 on our website at www.collegeboard.com/trends. Please feel free to cite or reproduce the data in Trends for noncommercial purposes with proper attribution.