While sticker prices have continued to balloon to as large as $100,000 at some private, nonprofit universities, the average net price — the remaining cost of tuition after institutional and grant aid is deducted — for undergraduate students entering their freshman year at these institutions clocked in at $16,510 for the 2024-25 academic year, down from $19,330 in 2006-07 (adjusted for inflation to 2024 dollars). Net prices at public institutions followed similar trend lines: $2,480 was the average amount charged in 2024-25 at in-state, four-year institutions, down from $4,340 in 2012-13 (inflation adjusted); and, according to the College Board, freshmen attending two-year colleges continue to receive on average enough grant aid to cover tuition and fees, a trend that dates back to 2009-10.
How exactly colleges are making up for the lost tuition revenue? Elsewhere in the same article:
For the past few years, however, the rate of inflation elsewhere in the economy has far exceeded increases in net tuition. Since September 2019, out-of-pocket college-tuition costs for households have climbed by less than 9 percent, according to a Chronicle of analysis of U.S. Bureau of Labor Statistics data (not seasonally adjusted). In contrast, prices across the economy grew by more than 22 percent during that time.
Such muted tuition inflation, combined with the growing costs of most goods and services, have squeezed many colleges financially. Typically, student-derived revenue accounts for about three-quarters of total operating revenue for private colleges and about half for public colleges, according to Moody’s Investors Service, a credit-rating agency.
These competing economic pressures, exacerbated by ever-declining birth rates, will likely continue to put higher education in a painful bind, said Stella M. Flores, a professor of higher education and public policy at the University of Texas at Austin. Administrators who are eager to discount tuition costs in a competitive environment for attracting students could potentially find themselves constrained financially to meet the increased costs associated with, say, subsidizing low-enrollment academic programs, or offering mental-health counseling or programs to relieve food insecurity among students.
“It’s good that tuition isn’t rising,” Flores said, “but really the bigger problem for higher ed is that there are just less students.”
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