Trends in College Pricing, 2012. Trends in Higher Education Series

Widespread concern about the high and rising price of college makes timely data on tuition increases in historical context particularly important. The increase in average published tuition and fees at public four-year colleges and universities for the 2012-13 academic year is smaller than it has been in recent years--and below the average growth rate for the decade from 2002-03 to 2012-13. But the news about what students actually pay is less encouraging. From 2008-09 to 2010-11, grant aid and tax benefits increased rapidly enough to cause the average net prices to decline, even in the face of tuition increases. Through unusually large increases in Pell Grants, grants for veterans, and federal tax credits, the federal government increased its role in financing higher education, relieving the burden on students. In contrast, the average net price paid by full-time students enrolled in public four-year colleges increased measurably in 2012-13 for the second consecutive year. Average net price also increased for public two-year and private nonprofit four-year students in 2011-12 and 2012-13, after three years of decline. Average published tuition and fees for in-state students at public four-year colleges and universities increased from $8,256 in 2011-12 to $8,655 in 2012-13. The 4.8% ($399) increase in tuition and fees was accompanied by a $325 (3.7%) increase in room and board charges for students living on campus. At $9,205, room and board charges account for more than half of the total charges for these students. Half of all full-time students at public and private nonprofit four-year colleges attend institutions charging tuition and fees of $10,282 or less; half attend institutions with higher published prices. In 2012-13, full-time undergraduates at public four-year institutions receive an estimated average of $5,750 in grant aid from all sources and federal tax benefits to help them pay the average $8,665 published tuition and fees. The students pay average net price of just over $2,900. State appropriations per full-time equivalent (FTE) student declined by 10% in 2011-12, leaving this source of funding 25% below its level five years earlier, after adjusting for inflation. Over the decade from 1999-2000 to 2009-10, the percentage of all associate degrees awarded by for-profit institutions increased from 12% to 19%. The percentage of all bachelor's degrees awarded by this sector increased from 2% to 6%, and its percentage of all graduate degrees awarded increased from 2% to 9%. Over the entire income distribution in the United States, real average family incomes in 2011 were lower than they were a decade earlier. The largest declines were for the families in the lowest 20% of the population. (Contains 14 tables and 52 figures.) [This paper was written with assistance from Charles Kurose.]