How colleges’ net prices fluctuate over time

Robert Kelchen:

A graduate sits on his bed after his graduation ceremony next to his textbooks and belongings as he gets ready to move out of his dorm at a university in Heifei, Anhui province, June 25, 2011. China’s State Council said that the country is facing a risk of creating jobs for millions of college students who will graduate between 2011 and 2015, as it forecasts a steady increase in the number of graduates over the next five years, Xinhua News Agency reported. According to the Ministry of Human Resources and Social Security, China will have about 6.6 million college graduates in 2011.
As student loan debt has exceeded $1.2 trillion and many colleges continue to raise tuition prices faster than inflation, students, their families, and policymakers have further scrutinized how much money students pay to attend college. A key metric of affordability is the net price of attendance, defined as the total cost of attendance (tuition and fees, books and supplies, and a living allowance) less all grants and scholarships received by students with federal financial aid. The net price is a key accountability metric used in tools such as the federal government’s College Scorecard and the annual Washington Monthly college rankings that I compile. In this post, I am focusing on newly released net price data from the U.S. Department of Education through the 2013-14 academic year.

I first examined trends in net prices since the 2009-10 academic year for the 2,621 public two-year, public four-year, and private nonprofit four-year colleges that operate on the traditional academic year calendar. I do this for all students receiving federal financial aid (roughly 70% of all college students nationwide), as well as students with family incomes below $30,000 per year—roughly the lowest income quintile of students. Note that students from different backgrounds qualify for different levels of financial aid from both the federal government and the college they attend (and hence face different net prices). Table 1 shows the annual percentage changes in the median net price by sector over each of the five most recent years, as well as the median net price in 2013-14.