Published Prices and the Net Prices Students Pay Rise at Moderate Rates
NEW YORK, Nov. 6, 2019 /PRNewswire/ -- College Board’s 2019 Trends in Higher Education reports released today—Trends in Student Aid and Trends in College Pricing—show a continuation of moderate growth in college prices and grant aid and declines in undergraduate student borrowing. Yet, for many students, grant aid is not keeping pace with increases in tuition, fees, and other expenses. Rising net prices, combined with increasing income inequality, create ongoing challenges for students and families paying for college.
“The Trends in Higher Education series provides insight into long-term changes in college pricing and financial aid,” said Jessica Howell, College Board’s vice president of research. “A college education is critical to long-term financial security, yet many students and families face real financial barriers to college enrollment and success. The data on college prices and student aid included in these reports create a context for evaluating public policies designed to increase educational opportunities.”
After rising at an average rate of 5.0% beyond inflation between 1999-00 and 2009-10 and 3.2% per year between 2009-10 and 2014-15, average published tuition and fees at public four-year colleges and universities rose 1.2% per year between 2014-15 and 2019-20. In 2019-20, the increase was 0.5% (2.3% before adjusting for inflation). The average net price paid by full-time in-state students in this sector rose by about $400 between 2014-15 and 2019-20, following an increase of $1,300 over the previous five years.
At public two-year colleges, declines in Pell Grants have contributed to a decline in the amount of grant aid the average student has available for books, supplies, and living expenses after covering tuition and fees from almost $1,000 in 2010-11 to about $400 in 2019-20. In the private nonprofit four-year sector, the average net tuition and fee price was lower in 2014-15 than in 2009-10 but has risen since.
The federal government provided 62% of all student aid in 2018-19. Because veterans’ benefits, non-need-based loans, and tax benefits have grown more rapidly than Pell Grants, subsidized loans, and smaller need-based programs, only 33% of federal aid in 2018-19 was based on students’ financial circumstances—a decline from 91% in 1988-89 and 58% in 1998-99. Some state and institutional grant aid is also allocated without regard to students’ financial circumstances. Overall, the share of state grant aid allocated on the basis of financial need rose from a low of 71% in 2010-11 to 76% in 2016-17. But it remains to be seen whether the decline in that share to 75% in 2017-18 is the beginning of a reversal in that trend.
In 2015-16, public four-year colleges and universities distributed less than half of their institutional grant aid to in-state students (and 20% of aid to out-of-state students) on the basis of financial need. Almost 60% of institutional aid at private nonprofit doctoral universities, just under half at bachelor’s colleges, and about a quarter at master’s institutions in the sector was need-based.
Trends in Student Aid 2019 documents an eight-year decline in both total annual student borrowing (from $131.7 billion in 2018 dollars in 2010-11 to $106.2 billion in 2018-19) and loans per full-time equivalent undergraduate student (from $6,000 in 2018 dollars in 2010-11 to $4,410 in 2018-19). However, average federal borrowing per graduate student, which peaked at $19,750 in 2010-11 before declining to $17,850 in 2014-15, rose for the fourth year in a row, to $18,470 in 2018-19.
“Price increases, even moderate increases, can be a barrier to accessing a high quality postsecondary education,” said coauthor Jennifer Ma, senior policy research scientist at College Board. “Our reports combine information about published prices with data on financial aid and household incomes to provide insight into the struggles many students and families face.”
The average published tuition and fees for in-state students attending public four-year colleges increased by $6,850 from 1988-89 to 2018-19. This increase equaled about half of the increase in income ($13,000) of the middle 20% of families in the United States—and 8% of the increase in income ($87,930) of the 20% of families with the highest incomes.
However, in 2015-16, at public four-year institutions, full-time dependent students from families with incomes below $35,000 paid an average of about $9,000 less in net tuition and fees after grant aid than those from families with incomes of $120,000 or more. The average net tuition and fees paid by full-time students from families with incomes below $35,000 at private nonprofit four-year institutions fell between 2011-12 and 2015-16, while the average price paid by those from families with incomes above $120,000 rose by about $1,600.
“Our 2019 reports highlight differences in prices and aid across students from different family backgrounds and different states,” said Sandy Baum, nonresident senior fellow in the Center on Education Data and Policy at the Urban Institute and coauthor of the 2019 Trends in Higher Education reports. “These reports show non-need-based aid making up a significant share of federal, state, and institutional grant aid.”
Key College Pricing Findings
Key Student Aid Findings
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SOURCE The College Board