On the Latest Trends in College Pricing

Every year, the College Board publishes its Trends in College Pricing and Trends in Student Aid reports. And every year, the news is the same: the price of college is up; debt is up; and the benefits of a college education are moving farther and farther away from the average family.

On one level, this year’s reports are no different. Average tuition and fees for in-state students at public four-year colleges increased 2.9 percent over the past year. The average tuition at two-year colleges increased 3.3 percent, while tuition at private nonprofit colleges increased 3.7 percent. And roughly 60 percent of students who earned bachelor’s degrees in 2012-13 from the institutions at which they began their studies graduated with debt. They borrowed an average of $27,300—an increase of 13 percent over five years. And the grand total of student debt is up too.

But there is also what appears to be a bit of good news. The rate of price increase is actually down, and the sum of what students borrowed this year was 13 percent lower than their borrowing in 2010-11. 

Some are greeting these reports with optimism, taking them as evidence that calls for dramatic higher ed reforms are premature. According to Inside Higher Ed, “Justin Draeger, president of the National Association of Student Financial Aid Administrators, said this year’s reports are good news over all. They’re also a good reminder of why permanent changes, such as cuts to Pell Grants, shouldn’t be made in response to acute budgetary problems.”

But when one digs into the data, even the “good” news reveals itself to be superficial.

First, it is important to remember why tuition and fees had been growing at such an especially alarming rate over the past several years, especially at public institutions. The Great Recession put a tremendous amount of strain of college and university budgets, as state appropriations evaporated and families’ finances suffered. Instead of making the tough decisions that would allow them to maintain academic quality while cutting back, many schools made up their financial shortfalls by passing the costs onto students in the form of higher tuition and fees. The decline in the rate of price increase this year doesn’t reflect institutions’ learning to control costs; it is simply the process of returning toward the pre-recession status quo.

Furthermore, much of the fall in total student borrowing is the result of sharp declines in enrollment. As the College Board notes, “Growth in full-time equivalent (FTE) postsecondary enrollment of 16% over the first three years, followed by a decline of 4% over the next three years, contributed to this pattern [of declining student borrowing].” Far from representing a success, this fact illustrates that more and more families feel higher education is out of reach. Even when it comes to the per-student decrease in borrowing, which is unaffected by enrollment, grant aid has simply taken up much of the slack. Less borrowing has little to do with greater cost effectiveness.

And all of this comes at a time when the average American’s income remains stagnant. So, even as growth in tuition and fees slows, a college education continues to become increasingly less affordable for most Americans.

Finally, it is also important to remember what the College Board’s reports don’t measure: what students are getting for all of this money. The publication of these reports comes not long after Richard Arum and Josipa Roksa released Aspiring Adults Adrift, the follow-up book to their 2011 study on the limited learning that occurs on college campuses. What they found is that today’s graduates are entering the world less prepared than ever. They lack the skills to be useful employees and the knowledge to be informed citizens. College price growth isn’t just outpacing inflation; it’s outpacing student learning by light-years.

A slower increase in tuition and fees and less student borrowing are surely good news. But the fundamental problems plaguing higher education remain as acute as ever. Far from dulling our desire for higher ed reform, a deeper look into the data should spur the country to stop focusing on the symptoms and begin tackling the root causes of our higher ed crisis.

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