College Board Reports Tuition Increases, More Financial Aid
October 23, 2009
Two reports released last Tuesday by the College Board - Trends in College Pricing 2009 and Trends in Student Aid 2009 - show significant tuition increases for 2009-10. At the same time, schools are offering more financial aid even while their state appropriations and endowments spiral downward.
The average listed tuition and fee charge for full-time, full-year undergraduates at public four-year colleges and universities rose at an average annual rate of 4.9% per year beyond general inflation from 1999-2000 to 2009-10, more rapidly than in either of the previous two decades. The rate of growth of published prices at both private not-for-profit four-year and public two-year institutions was lower from 1999-2000 to 2009-10 than in either of the previous two decades. However, despite this increase, half of all full-time public and private not-for-profit four-year college and university undergraduates attend institutions charging tuition and fees of less than $8,679.
Increases in financial aid helped to mitigate these tuition increases. Although average published tuition and fee charges increased by about 15% in inflation-adjusted dollars at private not-for-profit four-year and by about 20% at public four-year colleges and universities from 2004-05 to 2009-10, the average estimated 2009-10 net price for full-time students, after considering grant aid and federal tax benefits, is about $1,100 lower (in 2009 dollars) in the private sector and $400 lower in the public sector than it was five years ago. Increases in grant aid, which is funded primarily by colleges and universities, accounted for much of this growth. The average grant aid per undergraduate full-time equivalent (FTE) student increased by $1,439, from $3,602 (in 2008 dollars) in 1998-99 to $5,051 in 2008-09.
In 2008-09, undergraduate students received an average of $10,185 in financial aid per FT student, including $5,041 in grant aid and $4,585 in federal loans. Graduate students received an average of $22,740 in aid, including $7,558 in grant aid and $14,598 in federal loans.
Increases in financial aid occurred in spite of the fact that the state tax appropriation per student in 2008-09 was actually 12% lower in constant dollars than a decade earlier.
The report shows a few other trends in the financing of higher education, such as:
- Between 1978 and 2008, average family income declined by 3% ($528 in constant 2008 dollars) for the poorest 20% of families, but rose 15% ($8,067) for the middle 20% and 78% ($143,587) for the wealthiest 5% of families.
- From 2007-08 to 2008-09, total education borrowing increased by about $4 billion, or 5% in current dollars. Federal borrowing increased by about $15 billion, but nonfederal loans declined by about $11 billion.
- Total assets in state-sponsored Section 529 college savings plans declined by 19% in current dollars during calendar year 2008, and by another 4.3% during the first three months of 2009. The average value of individual accounts declined 24% in current dollars during 2008, and another 4.7%, to $8,944, during the first three months of 2009.
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