Published Prices and the Net Prices Students Pay Rise at Moderate Rates
Undergraduate student borrowing declines for the eighth consecutive year
New York—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 circumstaces. 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
Average published tuition and fees for full-time in-state students at public four-year colleges and universities increased by 2.3% ($230) before adjusting for inflation, from $10,210 in 2018-19 to $10,440 in 2019-20.
The increase in average grant aid and tax benefits for full-time students at public four-year institutions covered 8% of the $1,430 (in 2019 dollars) increase in average tuition and fees between 2009-10 and 2014-15; between 2014-15 and 2019-20, increases in aid covered 29% of the $590 price increase.
Average published in-district tuition and fees at public two-year colleges increased by 2.8% ($100) before adjusting for inflation, from $3,630 in 2018-19 to $3,730 in 2019-20.
In 2019-20, average published tuition and fees for in-district students at public two-year colleges range from $1,430 in California to $8,210 in Vermont. Average published tuition and fees for in-state students at public four-year institutions range from $5,580 in Wyoming to $17,470 in Vermont.
Average published tuition and fees at private nonprofit four-year institutions increased by 3.4% ($1,200) before adjusting for inflation, from $35,680 in 2018-19 to $36,880 in 2019-20.
The average net tuition and fee price for dependent students from the lowest income families at for-profit institutions rose 36%, from $8,830 (in 2015 dollars) in 2003-04 to $12,020 in 2015-16; the average net price for lowest-income students in the private nonprofit sector fell by 2% to $7,580 over these years.
State and local funding per student rose in 2017-18 (in inflation-adjusted dollars) for the sixth consecutive year, following four years of decline. Between 2007-08 and 2012-13, the combination of a 15% decline in total funding and an 11% increase in enrollment led to a 23% decline in state and local funding per public college student. Between 2012-13 and 2017-18, the combination of a 15% increase in total funding and a 3% decline in enrollment led to a 19% increase in funding per student.
Total postsecondary enrollment fell by 196,000 (1%) between fall 2015 and fall 2017. There were 118,000 (2%) more students at public four-year institutions and 60,000 (2%) more in the private nonprofit four-year sector, but 127,000 (2%) fewer at public two-year colleges and 247,000 (18%) fewer in the for-profit sector.
In 2015-16, 28% of full-time undergraduates taking courses in classroom settings lived on campus; a similar share lived with their parents and 44% lived off campus but not with parents.
Of 2015-16 bachelor's degree recipients, 41% completed their degrees within four years of first enrolling in college; 59% finished within five years.
Key Student Aid Findings
In 2018-19, undergraduate students received an average of $15,210 per FTE student in financial aid: $9,520 in grants, $4,410 in federal loans, $1,210 in education tax credits, and $70 in Federal Work-Study (FWS).
Grant aid per FTE undergraduate rose by 40% between 2008-09 and 2013-14 from $5,940 (in 2018 dollars) to $8,340, and by another 14% to $9,520 by 2018-19. Grant aid per FTE graduate student rose by 13% ($950 in 2018 dollars) between 2008-09 and 2013-14 and by another 9% ($710) to $8,920 by 2018-19.
Pell Grant expenditures rose from $21.0 billion (in 2018 dollars) in 2008-09 to $41.2 billion in 2010-11, but declined to $28.2 billion by 2018-19. The number of Pell Grant recipients fell in 2018-19 for the seventh consecutive year, but the 6.8 million recipients represented a 10% increase from 6.2 million in 2008-09. The $6,095 maximum Pell Grant in 2018-19 was 32% higher in inflation-adjusted dollars than it was 20 years earlier, but 1% lower than it was 40 years earlier.
Colleges and universities increased their grant aid for undergraduate and graduate students by 24%, from $52.1 billion (in 2018 dollars) in 2013-14 to $64.7 billion in 2018-19. Over these five years, state grant aid rose by 17%, but federal grant aid declined by 13%. The share of grant aid coming from colleges and universities rose from 35% in 2010-11 to 48% in 2018-19.
In 2015-16, 78% of full-time students at public four-year colleges and universities had to cover an average of $14,400 in expenses beyond their expected family contributions (EFCs) and grant aid from all sources. For 12% of students in this sector, grant aid exceeded documented financial need.
In 2017-18, average debt per borrower among bachelor's degree recipients from public and private nonprofit four-year institutions was $29,000—a 1% ($300) increase from $28,700 (in 2018 dollars) in 2012-13. Debt per bachelor’s degree recipient, including both those who borrowed and those who did not, was $16,800—3% ($500) lower than in 2012-13.
Among the 2015-16 bachelor's degree recipients who were age 23 or younger, 11% borrowed $40,000 or more; 27% of those between the ages of 24 and 29 and 35% of those age 30 or older borrowed this much. One-third of black bachelor’s degree recipients accrued $40,000 or more in student debt, compared with 17% of white graduates,13% of Hispanics, and 9% of Asians.
As of March 2019, 55% of borrowers with outstanding education debt owed less than $20,000; 43% of the outstanding federal education loan debt was held by the 10% of borrowers owing $80,000 or more.
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