NEW YORK — The College Board announced today that college prices in 2008-09 rose just slightly faster than the Consumer Price Index. While more financial aid is available for students than ever before, the number of private loans for higher education began to shrink even before the current credit crisis.
Two new College Board reports, “Trends in College Pricing 2008” and “Trends in Student Aid 2008,” document a wide variation in prices in a diverse higher education system. College Board President Gaston Caperton said that the information in the Trends reports will help families to make better educational decisions.
“A college education is the passport to opportunity and success in today’s global economy. In this time of financial uncertainty, it is essential that students and families have the most up-to-date information on the true costs associated with making this important investment in their future,” Caperton said. “These new reports will help families understand the financial realities of higher education, including the aid available, and then make the best possible decisions.”
“Trends in College Pricing 2008” found that after adjusting for the 5.6 percent increase in the Consumer Price Index, average published tuition and fees declined this year by 0.8 percent at public two-year colleges and increased by just 0.7 percent for in-state students at public four-year institutions and by 0.3 percent at private four-year colleges and universities.
Financial aid, including both grants and federal loans, increased in 2007-08 by a per-student average of 5.5 percent after adjusting for inflation, according to the most recent aid data available. This aid can significantly lower the net price students actually pay for college. The estimated 2008-09 net price paid by full-time in-state students at four-year public colleges and universities is about $2,900, a reduction from a published price of $6,600. For full-time students at public two-year colleges, the average net price is only about $100, compared to the $2,400 published price, and for full-time students at private four-year not-for-profit institutions the net price is about $14,900, or $10,200 less than the published $25,100 sticker price.
Over the last decade, students have also increasingly turned to private loans to help pay for college. But the new reports found that in 2007-08 the private loan volume actually declined by $173 million (1 percent) to $19.1 billion in 2007 dollars. That decline reversed years of double-digit growth and came before the current credit crisis brought on new concerns about students’ ability to find loans.
Sandy Baum, senior policy analyst at the College Board and professor of economics at Skidmore College, said, “Adequate and accessible financial aid is now more crucial than ever with so many students and families facing a wide range of economic pressures. These new reports provide important information not just for students and families, but for colleges and universities, as well as policymakers trying to assure that quality higher education is financially accessible to all qualified students.”
The reports’ key findings are summarized in the table below:
|Private Four-Year||Public |
|Published 2008-09 Tuition and Fees||$25,143||$6,585||$17,452||$2,402||$13,046|
|One-Year Dollar Increase||$1,398||$394||$866||$108||$557|
|One-Year Percentage Increase||5.9%||6.4%||5.2%||4.7%||4.5%|
|One-Year Percentage Increase After Inflation||0.3%||0.7%||-0.4%||-0.8||-1.1%|
|Average Grant Aid and Tax Benefits per Student||$10,200||$3,700||$2,300||N/A|
Prices Vary by Region and Sector
College prices vary by region and type of institution. In-state public four-year tuition and fees range from $5,412 in the South to $8,602 in New England. The lowest-priced colleges are public two-year colleges in the West, with average tuition and fees of $1,292. The highest-priced colleges are private four-year colleges in New England, with average tuition and fees of $31,680. Only 19 percent of full-time undergraduates in four-year colleges and universities are enrolled in institutions with published prices of $24,000 or higher. Twenty-nine percent are at institutions with prices less than $6,000.
For the first time this year, “Trends in College Pricing” reports separately on average prices for doctorate-granting universities, master’s universities and baccalaureate colleges within both the public and private sectors. The average published price in 2008-09 at public institutions is $7,307 at doctorate-granting universities, $5,707 at master’s universities and $5,604 at baccalaureate colleges. The private equivalents were $31,066, $22,717 and $23,054, respectively.
In addition to tuition and fees, students nationally pay an average of about $8,000 in room and board if they live on campus, or in equivalent housing and food costs if they do not. This year these prices rose approximately $400 in all sectors. Student budgets also include about $1,100 for books and supplies and $3,000 for other expenses, such as transportation and miscellaneous living costs.
“Trends in College Pricing” tracks college prices over a 30-year period. From 1977-78 to 2007-08, published tuition and fees increased by an average of about $1,300 in inflation-adjusted dollars at public two-year colleges, about $4,000 at public four-year institutions, and about $15,000 at private four-year colleges and universities.
Family income over the same period did not keep pace with the increase in college prices. Average family income increased by $463 for the poorest 20 percent of families, $11,275 for the middle 20 percent, and $146,650 for the wealthiest 5 percent. Grant aid and loans have helped.
Increased Grant Aid
In 2007-08, undergraduate students received an average of $8,896 per full-time equivalent student in financial aid, including $4,656 in grant aid and $3,650 in federal loans.
After holding steady at 5.2 million for two years, the number of federal Pell Grant recipients rose by 5 percent to 5.4 million in 2007-08. The inflation-adjusted value of the maximum Pell Grant, received by students who are determined to have no capacity to contribute to college expenses from either their own or their parents’ resources, increased in inflation-adjusted dollars for the first time since 2002-03. Total Pell Grant expenditures in 2007-08 were $14.4 billion, slightly lower than in 2004-05 but still much higher than 10 years ago.
In 2006-07, private four-year colleges and universities awarded an average of almost $7,500 per student in institutional grant aid, with about 70 percent helping to meet financial need. Public four-year institutions awarded more than $1,000 per student, with about 44 percent helping to meet financial need.
Students Taking More Public Loans, Fewer Private
After two years of slow growth, federal education loan volume increased by 6 percent in inflation-adjusted dollars between 2006-07 and 2007-08, the years for which the most recent data are available. Over the same period, private loan volume declined slightly in real terms, from $19.2 billion to $19.1 billion. This decline followed an average growth rate of about 23 percent per year from 1997-98 to 2006-07. No data are available yet for this year, so the effects of the credit crisis on private education loans cannot be fully judged.
“Trends in Student Aid 2008” includes new information on the amount of debt with which students graduate from four-year institutions. In 2006-07, bachelor’s degree recipients who borrowed had an average of about $22,700 of debt, including private loans reported to their institutions. Including borrowers and nonborrowers, the average debt per degree recipient was about $12,400. Borrowers who graduated from private colleges had about 25 percent more debt than those who graduated from public colleges, while borrowers who graduated from for-profit institutions had about twice as much debt as those from public colleges.
Tracking Enrollment and Degree Patterns
The Trends reports also contain data on enrollment and degree patterns. In 2005-06, public two-year and four-year institutions enrolled 74 percent of full-time equivalent students and granted 64 percent of all degrees. Private not-for-profit institutions enrolled 20 percent of students and granted 29 percent of all degrees. For-profit institutions accounted for 6 percent of enrollments and 7 percent of degrees, up from 3 percent in 1995-96. For associate degrees, the percent awarded by for-profits rose from 9 to 15 percent.
“Trends in College Pricing 2008” and “Trends in Student Aid 2008,” including an online tool with expanded data and graphics, are available on the new Trends Web site at www.collegeboard.com/trends.
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The College Board is a not-for-profit membership association whose mission is to connect students to college success and opportunity. Founded in 1900, the association is composed of more than 5,400 schools, colleges, universities, and other educational organizations. Each year, the College Board serves seven million students and their parents, 23,000 high schools, and 3,500 colleges through major programs and services in college admissions, guidance, assessment, financial aid, enrollment, and teaching and learning. Among its best-known programs are the SAT®, the PSAT/NMSQT®, and the Advanced Placement Program® (AP®). The College Board is committed to the principles of excellence and equity, and that commitment is embodied in all of its programs, services, activities, and concerns.