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Business and Policy Areas
Business and Policy Areas

Study: Tuition Prices Maintain Moderate Increase While Grants Rise and Borrowing Declines

October 27, 2016

In-state tuition and fee sticker price for undergraduate students attending public colleges and universities increased just 2.4 percent between 2015-16 and 2016-17, according to the College Board's Trends in College Pricing 2016 report. This is the third year in a row the average in-state tuition prices grew by less than 3 percent. 

Trends in College Pricing examines annual changes in the published tuition and fees and other charges for undergraduates attending higher education institutions in the United States. The new report shows that for undergraduates attending four-year public colleges and universities in their legal states of residence (thus, paying in-state tuition and fees), the average tuition and fee price increased $230, from $9,420 in 2015-16 to $9,650 in 2016-17. For undergraduates who attended four-year public institutions outside their states of legal residence (thus, paying out-of-state tuition and fees), the average tuition price over that same time period rose 3.6 percent, from $24,070 to $24,930. The average tuition and fee charge at four-year private nonprofit schools also increased by 3.6 percent, from $32,330 to $33,480.

The report also shows the increases in sticker prices for tuition, fees, room, and board (TFRB) at public and private nonprofit colleges and universities. Between and 2015-16 and 2016-17, total TFRB for undergraduates attending in-state four-year public schools rose 2.7 percent, from $19,570 to $20,090. Total TFRB at four-year private nonprofit institutions rose 3.4 percent, from $43,870 to $45,370.

More Grants, Less Borrowing

The TFRB listed prices do not reflect what most students and families actually pay for college. Many undergraduates receive grants and federal education tax credits that lower their ultimate education-related expenditures. The average net price (the published price of tuition, fees, room, and board minus grant aid from all sources and federal education tax credits) for students who attended in-state four-year public colleges was $14,210 in 2016-17, a 6.7 percent increase over the net price for 2014-15. For students at four-year private nonprofit institutions, the average net price was $26,080, a 7.2 percent increase.

Even so, according to the College Board's Trends in Student Aid 2016 report, students received a much higher share of their financial aid from grants, and the amounts they borrowed fell sharply. Between 2011-12 and 2015-16, total grant aid per full-time equivalent undergraduate rose nearly 10 percent, from $7,640 to $8,390. In the same span, the average amount borrowed per student dropped 17 percent from $5,680 to $4,720.

Student loan borrowing has been on the decline over the past several years. The total amount of college loans taken by all students (undergraduate and graduate/professional) and their families fell from $124.2 billion in 2010-11 to $106.8 billion in 2015-16.
In 2015-16, undergraduates received approximately $184.1 billion in college financial aid. Total grants and scholarships accounted for 55 percent of these financial assistance funds; student loans represented only 36 percent.

While loans have fallen, the total amount of grants and scholarships received by all postsecondary students rose 6.1 percent, from $119.8 billion in 2010-11 to $125.9 billion in 2015-16. Institutionally funded grants and scholarships largely accounted for this increase. Grants, scholarships, and fellowships awarded directly by colleges and universities rose from 35 percent of the total amount students received in 2011-12 to 43 percent in 2015-16. At the same time, grants from the federal government fell from 44 percent of the total to 34 percent. Colleges and universities awarded $54.7 billion in grants and scholarships to all students in 2015-16; undergraduates received nearly 79 percent of these award dollars. 


Ken Redd
Director, Research and Policy Analysis