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Business and Policy Areas
Business and Policy Areas

Tuition Burden Eases at Public Universities

June 29, 2004

Despite increases in tuition and fees, students attending public institutions are actually paying nearly one-third less on average due to federal tax breaks and an increase in state and federal grants, according to a recent analysis by USA Today. Since 1998, students have enjoyed a $22 billion annual increase in grants, an 80 percent rise in financial aid targeting middle-class families, and new federal tax breaks.

The findings follow a June 1 report by the National Center for Education Statistics that detailed increases in need-based financial aid and grant aid during the 1990s, resulting in significant changes in how families pay for college. USA Today’s analysis focuses on the effective price of tuition and fees – what students paid after grants, discounts, tax credits, and deductions.

In 2003, students at four-year public universities paid on average only 27 percent of the published rate for tuition and fees. The effective tuition paid fell 32 percent from $1,636 during the 1997-98 academic year to an average of $1,115 in 2002-03. The analysis contends that grants, financial aid, and new tax breaks offset the 18 percent rise in tuition during the same time period.

At independent colleges and universities, the picture was somewhat different. Students at these institutions paid on average 57 percent of the published tuition and fees rate. These tuition rates rose 20 percent between the 1997-98 academic year and the 2002-03 academic year. However, students at independent institutions paid on average 7 percent more for tuition and fees. For these students, increased aid did not offset the tuition increases as greatly, according to the analysis.

Find the analysis at  USA Today.