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Tuition Has Increased Faster at Public Than Private Nonprofit Four Year Institutions

November 4, 2011

The 2011 “Trends in College Pricing” and “Trends in Student Aid” reports provide comprehensive analysis on trends of several measures of the cost of college and financial aid. One prominent headline from the “College Pricing” report is public four-year institutions increased tuition and fees 8.3 percent for in-state tuition while private nonprofit four-year colleges increased their tuition by 4.5 percent in 2011-12 compared to the year before. The variation in tuition and fee increases was much wider for public institutions than private institutions. Public institutions saw a range of increases in price from under 3 percent to 21 percent or more.

Even though most public institutions (35 percent) raised their tuition and fees between 3 to 5.9 percent, 6 percent of public institutions raised their tuition 15-17 percent, and another 6 percent of public institutions raised their tuition and fees by 21 percent or more. While public institutions had the larger percent increases in tuition and fees, for 83 percent of public institutions this increase translated into an increase of $1,000 or less per student. Private institutions’ narrow distribution of percentage increases in tuition and fees increases, ranging only from under 3 percent to 11.9 percent, meant a dollar increase of $1,000 or more per student for 71 percent of institutions.

Over each of the last three decades, private nonprofit four-year institutions have seen declines in the average annual percentage increases in inflation-adjusted tuition and fee price. At their highest point, private institutions saw annual increases averaging 4.8 percent from 1981-1991, 3.1 percent from 1991-2001, and 2.6 percent from 2001-2011. Public institutions were similar to private institutions in the average annual percentage increases in inflation-adjusted tuition and fees from the decades from 1981-1991 and 1991-2001, but diverge in the latest decade with average annual increases of 5.6 percent from 2001-2011.

“Trends in College Pricing” also highlights students’ increase in net tuition price, declining state appropriations, declining family income, and correlations between selectivity and completion. The “Trends in Student Aid” report shows the share of federal government dollars of all student aid has grown 10 percentage points over the last decade to 74 percent of all student aid.

Of students with Stafford loans, there has been a large decline in students only borrowing the unsubsidized portion of their loan package, and increase in the percentage of students taking both subsidized and unsubsidized portions of their loan package over the last decade. Of Bachelors degree recipients in 2009, approximately 19 percent have more than $28,000 in student debt, and 13 percent of students that started at four-year institutions but did not complete their degree program also had debt totaling more than $28,000.

Higher education tax credits and deductions from the American Opportunity Tax Credit implemented in 2009 provided significant savings to students and parents, from $6.6 billion in 2008 to more than double that in 2009, with $14.7 billion. The distribution of this savings by adjusted gross income (AGI)from 2008 to 2009 show that individuals with an AGI of less than $25,000 and AGI’s between $100,000 and $180,000 increased their share of the tax credit and deductions savings, from 5 to 17 percent and 18 to 26 percent, respectively. Individuals with AGI’s anywhere from $25,000 to $99,999 saw a decline in their portion of tax savings.

“College Pricing” also reports on trends in institutional grant aid at public and private institutions, total aid by FTE student, and Pell grants.

The 2011 “Trends in College Pricing” and “Trends in Student Aid” reports can be downloaded for free from the College Board website.

Contact

Natalie Pullaro Davis
Manager, Research and Policy Analysis
202.861.2596
E-mail