Here’s One Thing That Increased Less Than Inflation This Year: College Tuition

Average college tuition and fees increased substantially less than inflation for academic year 2022-23.

In fact, the just-released College Board report Trends in College Pricing and Student Aid 2022 shows that, after adjusting for the 8.3% inflation seen for the first eight months of the year, average published tuition and fees actually declined in all three of higher education’s largest sectors compared to last year. That’s the second year in a row that inflation-adjusted college tuition has decreased.

Published Tuition Prices

Before adjusting for inflation, the average 2022-23 published tuition and fees for full-time college students increased:

• 1.8% at public four-year colleges (in-state students): $10,940, $190 higher than in 2021-22.
• 2.2% at public four-year colleges (out-of-state students): $28,240, $620 higher than in 2021-22.
• 1.6% at public two-year schools (in-district students): $3,860, $60 higher than in 2021-22.
• 3.5% at private nonprofit four-year colleges: $39,400, $1,330 higher than in 2021-22.

Taking a longer view, over the decade between 2012-13 and 2022-23, average inflation-adjusted tuition and fees has declined by 4% at public two-year colleges, and by 1% at public four-year institutions. It’s increased by 6% at private nonprofit four-year institutions.

States With Lowest and Highest Published Tuition

The national average for in-state students attending four-year public institutions was $10,940. Florida had the lowest average four-year tuition at $6,370, followed by Wyoming, North Carolina, Montana and Utah. Vermont was the most expensive, with average in-state tuition of $17,650, followed by New Hampshire, Connecticut, Pennsylvania, and New Jersey.

At public two-year colleges, the national average for tuition was $3,860. California had the lowest rate – $1,430 for students paying in-district rates. It was followed by New Mexico, North Carolina, Arizona and Texas. Vermont’s two-year colleges were by far the most expensive with an average two-year tuition rate of $8,660. The next most expensive were South Dakota, New Hampshire, Massachusetts, and Oregon.

Net Tuition and Fees

Published – or sticker price – captures the headlines, but most students do not pay the tuition sticker price. They pay a discounted rate. Net tuition refers to the price students pay for college after government grants and institutional financial aid are factored into the equation.

According to the report, in 2019-20, 75% of public two-year, 78% of public four-year, and 88% of private nonprofit four-year first-time, full-time undergraduate students received federal, state, or institutional grant aid.

In 2021-22, undergraduate students received an average of $15,330 per full-time equivalent student in financial aid, made up of $10,590 in grants, $3,780 in federal loans, $870 in education tax credits and deductions, and $90 in Federal Work-Study. As a result:

• At public two-year colleges, first-time, full-time students will receive enough grant aid on average to cover their tuition and fees (but not their room, board and other educational costs), just as they have since 2009-10.
• The average net tuition and fees paid by first-time, full-time in-state students enrolled in public four-year institutions is an estimated $2,250, the lowest it’s been since 2006-07 and down more than a $1,800 from a peak in 2012-13 of $4,060.
• The average net tuition and fee price paid by first-time, full-time students enrolled in private nonprofit four-year institutions is an estimated $14,630, the lowest since 2006-07.

What Explains The Small Increases?

The historically small increases stem from several sources. First, a number of colleges continued to freeze tuition in an attempt to keep college as affordable as possible.

Second, after several consecutive years of sagging undergraduate enrollment, made worse the last two years by the Covid-19 pandemic, institutions are continuing to set their sticker prices and financial aid with an eye toward being as competitive as possible in the recruitment and retention of students.

And third, as pointed out by Robert Kelchen, professor and head of the department of educational leadership and policy studies at the University of Tennessee at Knoxville, in Inside Higher Education , in several states, the legislatures Simply did not allow their state universities to increase tuition, or alternatively, imposed a cap on what the increase could be. It’s a form of price control that’s overwhelmingly approved by the public.

Student Loans And Debt

While student loan debt remains a national concern and a political hot button, the overall picture is improving. In 2021-22, undergraduate borrowing declined for the 11th consecutive year. ƒAs of March 2022, the outstanding federal student loan balance stood at $1.62 trillion, up only slightly from the prior year.

In 2021-22, students and parents borrowed a total of $94.7 billion, down from a peak of $141.6 billion (in 2021 dollars) in 2010-11., and more than six billion dollars less than the prior year’s total of $101.3 billion.

ƒFederal loans per FTE undergraduate student declined to $3,780 in 2021-22, from a peak of $6,450 (in 2021 dollars) in 2010-11.

As of March 2022, 33% of borrowers owed less than $10,000 and 21% of borrowers owed between $10,000 and $20,000 in federal loan debt.

ƒIn 2020-21, 51% of bachelor’s degree recipients from public four- year institutions graduated with federal loans with an average federal debt level of $21,400 per borrower; 53% of bachelor’s degree recipients from private nonprofit four-year institutions graduated with federal loans with an average federal debt level of $22,600.

The Future

With inflation continuing to soar, the ability of institutions to hold down their tuition and fee rates for another year is doubtful. The large pulses of federal money that helped colleges deal with the financial fallout from the pandemic are gone. Enrollment increases are not expected; in fact, declines are more likely. And colleges will have to compete for appropriations in state budgets that are subject to similar inflationary pressures. Faced with rising costs in operations and no foreseeable increases in enrollment, colleges will have two basic choices – raise their tuition prices or cut their personnel and other operating costs.