Net Tuition Revenue Fell While Sticker Price and Grants Grew Over Last Decade
November 17, 2010
The College Board's 2010 "Trends in College Pricing and Trends in Student Aid" reports provide comprehensive analysis of ten-year trends in college costs and student financial aid. The report analyzes changes in average net price of tuition and fees (defined by the College Board as the difference between the listed tuition and fee "sticker" price and average grant aid from all sources). This analysis reveals that the net price, after adjusting for inflation over the time period from academic year 2005-2006 to 2010-2011, declined for public and private four-year institutions. NACUBO's analysis of the data in the College Board report shows that the net tuition price for undergraduates attending public four-year colleges and universities fell by 26 percent; at private nonprofit four-year institutions the net tuition price declined12 percent. These results suggest that on average, students are paying less today in tuition and fees than in 2005-2006. This trend is in stark contrast to the sticker price of education, which has increased on average by 24 percent for public four-year institutions, and 17 percent for private four-year institutions over the same time period.
Furthermore, these results indicate that the gap between the average net price and sticker price is growing. Now, only one-third of undergraduates pay the increasingly more expensive sticker price. Due to recent substantial increases in Pell grants, higher education tax benefits, and Veterans Administration education benefits for returning soldiers, a greater share of students are getting support to pay their tuition and fee costs.
As a result, grant aid has grown much more rapidly than the amount borrowed under federal student loan programs. The "Trends in Student Aid" report shows that over the past ten years, federal loans grew by 128 percent, but federal grants jumped 215 percent.
Institutional need-based grants at four-year institutions account for the majority of institutional aid and have the largest percent growth across both public and private sectors. At public institutions, grants that meet financial need increased from 28 percent to 42 percent of all institutional grants over the last ten years. At private institutions, about 66 percent of institutional grant aid is awarded based on financial need. The College Board attributes the growth in need-based grants to the combination of increasing tuition prices and decreasing family incomes due to the economy.
The full 2010 "Trends in College Pricing and Trends in Student Aid" report can be downloaded from the College Board Web site.
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