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Business and Policy Areas
Business and Policy Areas

Behind the Costs of a College Degree

April 17, 2014

“Tuition is rising, more students are in debt and at higher levels than ever before, and pressure is mounting in every direction and in both political parties—from the White House to state legislatures to overwhelmed parents and students—to do something about it,” writes Nate Johnson of Postsecondary Analytics in College Costs and Prices: Some Key Facts for Policymakers.

The issue paper, one of two recently released by the Lumina Foundation,uses data from a variety of sources to succinctly outline the strategic and communication challenges faced by colleges and universities. Key points include:

  • The biggest reason for surging tuition in the last few years was not increased spending on the part of institutions but rather the steep decline in state and local government support in the wake of the Great Recession.
  • Public institutions, on average, receive about 53 percent of core revenues from state or local appropriations, while 47 percent comes from tuition. The trend over many years has been for a larger share to come from tuition.
  • Reduced funding per student around the country meant almost universally that institutions felt pressured to become more efficient and find ways to serve more students with the same budget.

College Costs and Prices: Some Key Facts for Policymakers and the second issue paper, College Costs and Prices and the Great Recession, are both available from the Lumina Foundation.


Bob Shea
Senior Fellow, Finance and Campus Management