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Business and Policy Areas
Business and Policy Areas

Tuition Prices Maintain Moderate Increase While Borrowing Declines

November 13, 2015

In-state tuition and fee sticker prices for undergraduate students attending public colleges and universities for the full academic year increased by 2.9 percent between 2014-15 and 2015-16, according to the College Board's Trends in College Pricing 2015 report.  This is the second year in a row that 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 costs for undergraduates attending public and private colleges and universities 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 just $265, from $9,145 in 2014-15 to $9,410 in 2015-16. 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 by 3.4 percent, from $23,107 to $23,893, and the average tuition price at four-year private nonprofit schools rose 3.6 percent, from $31,283 to $32,405.

The report also shows the increases in sticker price of tuition, fees, room, and board (TFRB) at public and private nonprofit colleges and universities. Between and 2014-15 and 2015-16, total TFRB for undergraduates attending in-state four-year public schools rose by 3.3 percent, from $18,931 to $19,548. Total TFRB at four-year private nonprofit institutions rose 3.5 percent, from $42,445 to $43,921.

More Grants, Less Borrowing

It's important to note that the listed tuition, fees, and other charges do not reflect what students and families actually pay because many undergraduates receive grants and federal education tax credits that lower their ultimate education-related expenditures. The average net price (i.e., 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 $14,120 in 2015-16, a 6 percent increase over the net price for 2013-14. For students at four-year private nonprofit institutions, the average net price was $26,400, an 8 percent increase.

In addition, according to the College Board's Trends in Student Aid 2015 report, grant aid and tax credits covered a much larger share of net price than student loans did. Between 2013-14 and 2014-15, total grant aid per full-time equivalent undergraduate rose from $7,630 to $8,170. In the same span, average borrowing per student dropped from $5,670 to $4,800.

In total, undergraduates received approximately $183.8 billion in assistance to help defray their higher education expenses in 2014-15; $120.9 billion (66 percent) of these funds came from grants and federal tax credits. In 2009-10, grants and tax benefits accounted for 59 percent of undergraduates' total financial assistance.

The growth in institutional grant aid largely explains the increasing share of total grants to students. Between 2009-10 and 2014-15, grants, scholarships, and fellowships awarded directly by colleges and universities to undergraduates jumped 32 percent in inflation-adjusted dollars, from $30.2 billion to $39.8 billion. Federal loan volume, conversely, fell 17 percent, from $74.9 billion to $62.1 billion.


Ken Redd
Director, Research and Policy Analysis