The Lunacy Of Tuition Inflation Must End: 39 Brave Colleges Buck The Trend

Few issues in American higher education today are less well understood yet subject to greater controversy than the price of a college education. In recent years, state legislatures, Congress and even the president have taken on the higher education establishment over the high price of college. The press has jumped on the bandwagon with feature articles, television stories and op-ed pieces. As a result of this rather negative publicity, colleges and universities are being put on the defensive and are being asked to act.

Over the last 20 years, the average published price for a year of tuition and fees at a private four-year college has increased from $11,719 to $31,231, an increase of 166%, an increase two and a half times the 61% rise in the Consumer Price Index. Adjusting for inflation, the price of tuition and fees has escalated by 67% at four-year private colleges and by 60 percent at two-year public colleges. Reflecting decreased government funding, the price has more than doubled at four- year public colleges. (Trends in College Pricing 2014 p.16) During this same period, the median family income in the U.S., also adjusted for inflation, has increased 5.2% from $51,006 to $53,657, but it has actually declined by more than 7% since 1999 when it peaked at $57,843.

The implications are clear—list price has made a college education appear unattainable to an ever-increasing proportion of the population, as indicated by several recent studies. A survey by Sallie Mae reported that 63% of students eliminate colleges solely on the basis of price and 56% of families eliminate a school without any research beyond its price (How America Pays for College: 2015 Sallie Mae and Ipsos, Table 31). Another study, by Longmire and Company, reports that 32% of students and parents say they did not consider a private college on the basis of its published sticker price alone, and 60% say that they are unaware that most private colleges discount their sticker price so that freshmen pay less than the published tuition. (Higher Education Value Proposition Study, Longmire and Company p. 9, 2013)

In reality, though, few students pay the published price to attend college. Scholarships, institutional grants and government assistance provide the average student a significant discount to the published price of a college education. Unfortunately, students and their families do not know what the net price that they will actually pay will be until after they are accepted and thus many students choose not to apply to higher priced college. We need to think about other ways to price college so that what students pay is much closer to the published price and students can have this information when they begin their college search.

Over the last few decades 40 bold schools have lowered their tuition so that it more closely reflects the net price that their students pay. This is a trend that seems to be gaining momentum and needs to be watched as it will provide much greater transparency to students and their families on one of the important factors in deciding on which college to apply to and then to attend.