For federal policymakers, concerns focus on issues of affordability, access for low-income students, and whether federal student financial aid is keeping pace with rising prices. This report presents the current status and historical trends of college costs, with an emphasis on the prices students are ultimately charged at the varying types of institutions of higher education (IHEs) and how they pay for postsecondary education using student financial aid. College tuition and fees have been rising more rapidly than household income over the past three decades. In the 1976-1977 school year, the average price charged to students for tuition, fees, room, and board at four-year public and private institutions was $2,577; in 2005-2006, it was $17,447—a 577% increase. Historically, congressional involvement with issues of college costs and prices has focused on issues related to student access to postsecondary education. However, as Congress has considered the reauthorization of the HEA, attention has been given to additional actions that could be taken at the federal level to address college costs and prices. Actions considered have included creating price indices, providing incentives for controlling costs, making it easier for students to earn college credits, reducing regulatory burden, and increasing the availability of relevant public information. It is not clear which of these strategies would be most effective at addressing the issue of college costs or prices or whether some of these strategies would be more effective if implemented at the state or institutional level. As Congress continues to debate the reauthorization of the HEA, an expanded federal role regarding college costs and prices may be considered. This report begins by exploring three core concepts: college cost (what institutions spend), sticker price (what students are charged), and net price (what students actually pay)—defining each and presenting current and historical data. This exploration is followed by a discussion of various influences on costs and prices. The report concludes with an overview of relevant issues for reauthorization of the Higher Education Act of 1965 (HEA, P.L. 89-329 as amended by P.L. 105-244 ). Where data are available, this report considers all types of postsecondary education institutions: public, private not-for-profit, and private for-profit.
The rising cost of attending U.S. colleges and universities is a growing concern, as most Americans believe that college is out of financial reach for qualified students. For federal policymakers, concerns focus on issues of affordability, access for low-income students, and whether federal student financial aid is keeping pace with rising prices. This report presents the current status and historical trends of college costs, with an emphasis on the prices undergraduate students are ultimately charged at the varying types of institutions of higher education and how they pay for postsecondary education using student financial aid.
College tuition and fees have been rising more rapidly than household income over the past two decades. In 2005-2006, the average price charged for tuition, fees, room, and board at four-year public and private institutions was $17,447—a 577% increase from 30 years ago. On the basis of the mean household income of a household in the bottom fifth of the population, the price of college in 2005 was 71.3% of their income.
Historically, congressional involvement with issues of college costs and prices has focused on issues related to student access to postsecondary education. However, as Congress has considered the reauthorization of the Higher Education Act (HEA), attention has been given to additional actions that could be taken at the federal level to address college costs and prices. Actions considered have included creating price indices, providing incentives for controlling costs, making it easier for students to earn college credits, reducing regulatory burden, and increasing the availability of relevant public information. It is not clear which of these strategies would be most effective at addressing the issue of college costs or prices, or whether some of these strategies would be more effective if implemented at the state or institutional level. As Congress continues to debate the reauthorization of the HEA, an expanded federal role regarding college costs and prices may be considered.
This report begins by exploring three core concepts: college cost (what institutions spend), sticker price (what students are charged), and net price (what students actually pay)—defining each and presenting current and historical data. This information is followed by a discussion of various influences on costs and prices. The report concludes with an overview of relevant issues for reauthorization of the Higher Education Act of 1965 (HEA, P.L. 89-329 as amended by P.L. 105-244). Where data are available, this report considers all types of postsecondary education institutions: public, private not-for-profit, and private for-profit institutions.