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College costs are going down

  • The cost of America's top colleges has risen to $90,000
  • Few families actually pay full price for a college education
  • Still, college tuition remains out of reach for many Americans

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(The Hill) — The sticker price at America’s priciest colleges is approaching $90,000, a milestone that has inspired fresh debate about whether college is worth the cost. 

But the overall numbers tell a different story. The “net” price of college, the amount students and their families actually pay, is going down; almost no one is paying $90,000. 

The average student at a private, four-year college paid $32,800 in tuition and fees, room and board last fall, according to the College Board. Adjusting for inflation, the net price for private colleges has fallen by 11 percent in five years. 

At public colleges, the net price of attendance now averages $19,250. That figure has dropped by 13 percent in five years. 

“These schools, not only are they much less expensive than people think they are, they are getting less expensive,” said Phillip Levine, an economics professor at Wellesley College who studies college costs.  

Those net price figures comprise tuition and fees and room and board, subtracting thousands of dollars in scholarships, discounts and grants that schools and governments dispense to recognize merit or need.

Colleges give out so much grant aid that the advertised price of college has evolved into a largely fictional marketing tool, akin to the rack rates posted on hotel doors. 

At a public university, roughly two-fifths of undergraduates pay full price, according to research by financial aid expert Mark Kantrowitz. Roughly a quarter of students at private universities pay full price, and most full-pay students across the board are wealthy.

The sticker price still has the potential to scare many students away from going to school, however, because of a messaging problem and the difficulty students face calculating the net price.

“You see these headlines of college prices skyrocketing, that sort of thing, you know, it sends a message to low-income families that college is unaffordable,” said Jill Desjean, senior policy analyst for the National Association of Student Financial Aid Administrators.

Even if a student can get past a headline, comparing net prices between schools is extremely complicated. 

“If you’re looking at your financial aid offer for four different colleges. Those four pieces of paper could look entirely different. They use different terms. They use different numbers. There’s no standardization across how colleges communicate their numbers,” said Michele Shepard, senior director of college affordability at The Institute for College Access & Success.

For everyone outside the full-pay crowd, the actual price of college ranges downward to zero. At the typical four-year college, every student in the lecture hall may pay a different rate. 

“It’s like airplane tickets,” Kantrowitz said. “Everybody on the flight has paid a different fare for the ticket, even though they’re all going from point A to point B.” 

A student from a relatively prosperous family with $125,000 in household income can expect to pay $32,800 to attend a private college with a large endowment, according to a new report from the Brookings Institution.  

That figure is less than half of the published cost of attendance at those schools, which averages $73,100. 

The “average” American student, squarely within the middle class, pays much less. A student with a household income of $75,000 attending a well-endowed private college pays $17,700 on average, according to the report. 

“We’re all painted with the same brush: Private is more expensive. But it doesn’t have to be,” said Manuel Carballo, vice president and dean of admissions and financial aid at Oberlin College.  

A student from a household that earns $40,000 per year can expect to pay $10,700 per year at an elite private college with a large endowment, said Levine, author of the Brookings report. 

Ironically, low-income students at public campuses pay more: $14,400 a year on average at non-flagship schools.  

“Those kids are paying less than they were five years ago, but it’s still too much,” Levine said.  

The net price of college was rising, albeit slowly, from the mid-2000s until around 2016, College Board data show. Now, it’s falling, and scholars cite several reasons. 

For one, the published sticker price of college is declining, after adjusting for inflation. The average private college charges $53,430 in tuition and fees, room and board in 2022-23, down from $57,350 in 2020-21.  

Another factor is rising public outcry over college affordability. Colleges have responded. Dozens of them, mostly selective institutions with large endowments, now pledge to meet the full financial need of incoming students. Amid growing concern about student loan debt, some schools now meet that need without loans.  

In 2019, Rice University sweetened and streamlined its aid policy, pledging to cover the full cost of attendance for households earning up to $75,000 with grant aid.  

“Our goal was to try to simplify the discussion around college costs,” said Paul Negrete, executive director for university financial aid services at Rice. 

Williams College set a precedent in 2022 by eliminating both loans and work-study from its financial aid offerings.  

Work-study is a time-honored tradition in financial aid. But Williams officials decided student labor was patently unfair because students paying full price “had a choice to do something different,” like sleep, said Ashley Bianchi, director of student financial services. 

Although the net price is significantly lower than the sticker price for most students, it is still difficult for many to afford. Even at an average net price of about $33,000 per year, a student could owe $132,000 over four years. 

“I think it’s critically important context for people to understand that whatever that big shocking tuition number is, it’s not necessarily what they actually have to pay, said Shepard of The Institute for College Access & Success. “But I think it’s important to reiterate, that doesn’t mean that it’s actually affordable. 

Colleges once hid byzantine pricing structures behind an Ivy Curtain. In 2011, the Obama administration required all schools reaping federal aid to post a net price calculator on their websites.  

The calculator helps families gauge how much they might actually pay. But families have found the calculators cumbersome and confusing.  

“It definitely is work, and you definitely need to have some sort of base knowledge of knowing that you can look around and find out what it might cost you. The information is out there but not always easy” for everyday people to interpret, said Shepard. 

As an alternative to the calculators, Levine developed MyinTuition, a tool that promises comparatively quick net-price estimates. Dozens of top-drawer schools have signed on, including Rice, Williams and Oberlin. 

“MyinTuition is five, six questions that you can do in five minutes on your cellphone,” Carballo said.

Education

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