What the average college price really means for students

By Sandy Baum :: December 4th, 2013

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For the past 12 years, I have coauthored the College Board’s annual reports on college prices and student aid. Every year, reporters eagerly await the news about how much more students are paying this year than they paid last year. Unfortunately, a key goal seems to be generating startling headlines rather than providing clear and practical information. Of course, the complexity of the college pricing system—including differences between sticker and net prices and the wide variation across states, students, and types of institutions—makes an accurate story difficult to tell.

The news this year is mixed. After several years of rapid tuition increases in the public sector, the average increase for public four-year colleges across the country was just 2.9 percent in 2013-14. That’s the smallest increase in over 30 years. Even after adjusting for the low level of inflation, it’s still among the smallest. That said, the $8,893 average tuition and fee price for in-state students at public four-year institutions is much higher than the $7,008 (in 2013 dollars) five years earlier and $5,900 a decade ago.

But the $8,893 average price does not really represent what most students will pay. Indiana is the only state in the nation whose price is within $100 of that average. Published prices range from $4,404 in Wyoming and $5,885 in Alaska to $13,958 in Vermont and $14,665 in New Hampshire. Since in-state prices apply only to state residents, students don’t have the option to seek out better deals elsewhere in the country.

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There is, however, variation across public institutions within states. Community colleges generally have much lower tuition rates than four-year public colleges and universities. The national average price for a full-time student in 2013-14 is $3,264—just 37 percent of the average in the public four-year sector. Prices range from $1,424 in California (just 16 percent of the average four-year price there) to $7,090 in Vermont (51 percent of the average four-year price). In South Dakota, community college tuition is about three-quarters of university tuition.

But even within the four-year sector there is variation. There are flagship universities that grant doctoral degrees and where faculty are quite focused on research; master’s universities, where most graduate studies end with master’s degrees and where undergraduate admission standards tend to be less stringent; and a small number of public colleges offering only undergraduate degrees. Prices differ, ranging from an average of $9,804 at doctoral institutions to $6,918 at bachelor’s institutions.

All these prices are for state residents. Out-of-state residents are increasingly appealing to public colleges and universities because they pay higher prices, bringing badly needed revenues to campus.

These sticker prices matter because they are visible and because students may make decisions thinking this is what they will pay. But for most students that is not actually the case. Most receive assistance in the form of grants and scholarships from their institutions and/or from federal and state governments. Many pay lower taxes because of their tuition payments and, of course, many borrow.

My next post will focus on what all this financial aid means for college prices.

2Comments

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    [...] my last post indicated, average college tuition prices can be quite misleading because of the considerable variation across and within states, even within the public sector of [...]

  2. College is expensive, but how do we know if it is "unaffordable"?  ::  10:51 am on April 14th, 2014:

    [...] see headlines about college prices and we know that they keep going up, but do we know what it means for college to be [...]