Maybe You Can Afford Freshman Year, But What About the Next Three?
This is the season when many high school seniors have their college admission and financial aid offers in hand. Now, the cost of attending college becomes real—at least for the first year--because most students are only given dollar figures for the coming year, not what their costs might be in their sophomore, junior, or senior years.
According to an analysis of U.S. Department of Education data done by the National Association of Student Financial Aid Administrators, only about 320 colleges and universities offered tuition guarantees during the 2012-13 school year. The other 4,500 or so institutions that offer federal financial aid have no such guarantee. Because the cost of attending postsecondary institutions has increased so much over the last few years, students should anticipate that their bills will go up while they are in school, but by how much? The increase varies wildly depending on the type of school.
The National Center for Education Statistics (NCES), the data arm of the U.S. Department of Education, recently released a study of the Out-of-Pocket Net Price for College. It reports the changes in both the net price and total price of attending colleges/universities grouped by sector:
- 2-year public
- 4-year public
- Private not-for-profit
- Private for-profit
The total price includes tuition and fees, books and materials, housing, food, transportation, and personal expenses. More important is the net price, which is the out-of-pocket amount that students and their families actually pay to attend college after subtracting grants, loans, work-study, and all other student aid from the total price. Findings are based on undergraduates attending full time for a full year and give average increases by type of school.
The figure below shows changes in both the total and net prices between 2007-08 and 2011-12, the last academic year for which NCES has detailed information. The total price for attending public and private-not-for-profit institutions increased faster than the inflation rate (8 percent) as measured by growth in the Consumer Price Index. In contrast, the total cost of attendance at for-profit institutions fell by 7.6 percent.
The net price of attending public and private-not-for-profit institutions all increased—and the net price of public, four-year schools increased faster than inflation. In contrast, the net price of attending for-profit institutions declined by more than 20 percent.
One lesson is clear: Unless a student is at one of those 320 colleges that promise to freeze costs or at a private for-profit institution, this year’s bill is not the end of the story. This is especially true for students attending public, four-year institutions, where state budget problems have led to big increases as state subsidies decline.
Finally, given this overall picture, students and their families should dig deeper to find out if the schools they are considering offer guaranteed four-year tuition. NCES presents these institution-level data on its College Navigator site. It is only with these data that students and their families will be able to get a better idea of what their costs will be over the next few years as they pursue their degrees.
Mark Schneider is a vice president and Institute Fellow at AIR.