Average College Costs on the Rise

The latest report from the College Board on college costs shows that the decade-long trend of tuition and fees climbing much faster than general inflation continued into the 2010-2011 school year.

average college costs

Steep Growth in Tuition and Fees

The 2010 Trends in College Pricing report from the College Board shows that, between the 2000-01 school year and the 2010-11 school year, published tuition and fees at public 4-year year colleges and universities increased at an average rate of 5.6% per year beyond general inflation. These costs went up 7.9% for in-state students and 6% for non-resident students between 2009-10 and 2010-11 alone. In the same year, tuition and fees at private nonprofit 4-year institutions went up 4.5%.

However, it is important to differentiate between published tuition and fees and actual college costs. The College Board points out that about two-thirds of students receive grant aid, and others typically take advantage of federal tax credits and deductions to help defray costs.

Taking this into consideration, net costs have actually declined over the past five years for most groups when you adjust for inflation. When room and board are included, costs have increased about $600 (in inflation-adjusted dollars) at public 4-year colleges. But even with room and board, net costs declined at private nonprofit institutions and public 2-year colleges between 2005-06 and 2010-11.

This is due partially to an increase in the availability of student aid, particularly Federal Pell Grants and veterans' benefits. And institutional grant aid helped keep net college costs particularly for low-income students at private nonprofit institutions.

Nevertheless, college remained unaffordable for many American families. The effect of the economic downturn on family finances was significant: In 2009, average income for the bottom 20% of families was 11% lower than it had been for the previous ten years. Average income for families in the middle 20% was 5% lower, and it stayed the same for the top 20%.

Pricing poor students out of college creates a vicious cycle. The College Board report reminds us that median family income for individuals with at least a bachelor's degree was $99,707 in 2009, as compared with only $48,637 for those with only a high school diploma. When young people from the poorest 20% of families are unable to gain access to college, they are much less likely to be able to improve their economic outcomes.

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