College Isn't Getting Wildly Expensive Despite What You Might Think
The Brookings report partly debunks the perception that college is becoming unaffordable for most students by citing a report released earlier this year from education researchers Sandy Baum and Jennifer Ma that highlights the dramatic difference between the perceived and actual cost of college.
By just looking at the advertised price on a school's website - usually covering tuition, fees, room, and board - it appears that the overall cost of a year of a college education has jumped significantly over the past decade. However, the amount that students are actually paying has stayed comparatively low, rising a much smaller amount than what the rapidly increasing public prices might have you believe.
According to a Wall Street Journal article from earlier this year, both private and public colleges use tuition from students who are able to pay full price to subsidize the cost of attendance for lower-income students in the form of financial aid. Schools say that tuition subsidies can create a diverse student body.
"At private schools without large endowments, more than half of the tuition may be set aside for financial-aid scholarships. At public schools, set-asides range between 5% and 40%," the Journal reports.
Many private colleges - realizing that they've priced out potential students - are now offering an increasing amount of financial aid each year, according to another Journal article. They need to be able to fill seats in their classrooms, and the higher they set tuition, the more potential students they lose.
At public universities, these subsidies have also increased dramatically over the past several years, as state governments have slashed education budgets.
Baum and Ma's research found that public four-year colleges charged on average $11,380 in 2003-04, which grew by just over $7,000 by 2013-14, to $18,390 overall. In what students actually paid, though, the average cost went up only $3,220, from $9,400 to $12,620.
The difference between sticker price and what students actually pay is even bigger at private colleges and universities.
In 2003-04, private colleges charged $33,100 for tuition, fees, and room and board. Ten years later, they charged on average $40,920, a rise of $7,820.
The actually charges, though, stayed roughly the same. In 2003-04, students paid $22,630 on average, a charge which rose only $660 - to $23,290 - by 2013-14.
Here's why the actually cost for private colleges have kept steady over the past decade:
The average list price at these schools has increased by nearly $8,000, but the average price paid by students has barely changed at all (Baum and Ma 2014). In general, this means that students from affluent families, who actually pay the list price, are paying significantly more, while their lower-income counterparts are paying less, on average. This is a trend that dates back to at least the early 1990s.