Colleges’ net prices drop as inflation outpaces average published tuition

Dive Brief:

  • Sticker prices for college tuition and fees again rose at historically low rates in the 2021-22 academic year, with increases averaging 2.1% or less across different sectors tracked in a pair of annual reports from the College Board.
  • Before taking inflation into account, average published tuition and fees for in-state undergraduates at public four-year colleges rose by 1.6% to $10,740. For in-district students at public two-year colleges, they increased by 1.3% to $3,800. Average tuition and fees for out-of-state students at public four-year colleges rose by 1.5% to $27,560, and for students at private nonprofit four-year colleges, they climbed by 2.1% to $38,070.
  • But after accounting for inflation, average published tuition and fees fell across all sectors. Average net prices — the amount students actually pay after factoring in grants and scholarships — also slipped slightly.

Dive Insight:

The new data on college pricing and student aid adds perspective to how shifts in the U.S. higher education landscape are unfolding.

“This year’s data underscore the significant impact COVID-19 has had on higher education,” Jessica Howell, College Board’s vice president for research, said in a statement.

It’s the second straight year the College Board has tracked abnormally small increases in before-inflation sticker prices. Last year, average tuition and fees rose just over 1% for in-state students at four-year public colleges and about 2% for students attending private nonprofit colleges.

Prices are constrained as colleges enroll fewer students. Fall 2020 undergraduate enrollment fell from the year prior by about 4%, or almost 700,000 students, the College Board reported. The sharpest declines were at community colleges.

Those trends appear to be continuing this year, according to preliminary data released this week by the National Student Clearinghouse Research Center. It shows undergraduate enrollment falling by 3.2% from last year, although graduate enrollment increased 2.1%. Community colleges were again among the hardest hit.

The College Board estimates that total student aid, including federal loans and nonfederal loans, declined between 2019-20 and 2020-21. Aid fell by more than 5% to $247.1 billion. Notably, Pell Grants, which go to students from low-income families, dropped by almost 10% to $26 billion.

Institutional grants were one of the few major student aid categories that increased year over year. Colleges awarded $71.1 billion in institutional grants in 2020-21, up about 2%.

Institutional grants have now jumped 56% over a decade. That’s notable because total federal loans have fallen by 34% during the same time frame. Total federal grants fell by 32%, including a 39% drop in Pell Grants.

Nonetheless, net tuition and fees have declined, the reports estimated. First-time, full-time undergraduates attending private nonprofit four-year institutions paid a net $14,990 on average in 2021-22, down from $15,630 the year before and $15,760 a decade prior. 

Those paying in-state prices at public four-year institutions saw a net price of $2,640 on average, down from $2,880 the year before and $3,630 a decade ago

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