Tuition Rates and Aid Decline Show a College Affordability Gap
The Trends in College Pricing report, compiled by the College Board, found that in-state tuition fees increased by 2.9 percent for the 2013-14 school year. This is a drastic decline from the 8.5 percent increase of 2011-12 and continues the downward trend started by 2012-13′s increase of 4.5 percent. It is the lowest increase of in-state tuition in more than 30 years.
This is the bit that makes headlines: that tuition prices aren’t keeping pace with previous increases. The College Board even references this in the report: ”Although it is generally the published prices that make headlines, it is the net prices paid by individual students that matter the most for college access and affordability.”
The College Board arrives at its net price by averaging the price all students pay, also taking into account any aid a student is receiving. According to the organization, two-thirds of students receive some form of aid to finance their education. The net price adjusts the cost for those students to reflect the actual out-of-pocket expense, using that figure, along with the full tuition price one-third of students pay, to calculate the net tuition price.
As a result, the price of tuition is an important factor, but so is the amount of aid students are receiving. The net price of tuition, on average, stands at $3,120 for 2013-14. Adjusted for inflation, in 2007-08 the net price was $2,590, and it fell in 2009-10 to $1,940.
When tuition prices were booming, so was student aid. This trend has not continued. “The data reported in Trends in Student Aid 2013 reveal that the sharp increases in federal grant aid and in student borrowing that accompanied the financial crisis have not been repeated,” according to the College Board. As the chart shows, federal programs to assist in paying for education have declined.
There has been a marginal pickup in aid from nonfederal loans, but total funds have decreased from their 2010-11 high. In 2012, there were fewer people vying for student aid. Fall 2012 enrollment fell by 467,000 compared to fall 2011 enrollment. But this is only a modest decline compared to the surge between 2006-2011 — that period saw growth of 3.2 million in enrollment.
The decline in enrollment numbers does not match the decline in aid, as shown by the rise in net price for tuition. However, the drop in overall tuition is a positive sign. The College Board report believes it is an indicator that tuition increases are cyclical in nature, matching increases witnessed during other economic downturns, rather than a new trend of consistently rising prices.
Another factor that’s damaging to the affordability of college is that real median family income in 2012 was 8.3 percent lower that year than it was before the recession started, in 2007, according to a Census Bureau report. A drop in tuition prices is a step in the right direction, but it does little to alleviate the burden of cost when there is less aid or family income to spend on attending college.
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