The price of college is...dropping?
You've seen all of the headlines about college prices soaring. You've seen eye-watering prices posted by the top colleges and universities.
But is that only part of the story?
New data from CollegeBoard suggests that it is only part of the story. On average, students at many schools pay less for college in today's dollars than they were ten years ago.
The data
Let's start with some of the startling findings in CollegeBoard's new report:
From 2014 to 2024, the inflation-adjusted published tuition and fees declined by 4% for in-state students at public four-year colleges. The actual average net tuition and fees paid by these in-state students also dropped after aid.
During the same period, the inflation-adjusted published price for private schools increased by 4%. But again, the average actual price paid after aid fell during this period after considering aid.
In other words, the average price paid by students both in-state at public colleges and for private schools fell when adjusted for inflation. This reverses a trend in prior decades where the inflation-adjusted cost increased by 20%.
Inflation-adjusted - what does it mean?
Your grandpa probably bought candy at a "five and dime" store. Newspapers used to cost 10 cents. And you certainly can't buy a dozen eggs for a dollar anymore.
A dollar today is worth less than in prior decades, and that's part of why the "true" cost of attending college has decreased.
Especially in the early 2020s, inflation ran rampant after the pandemic. It peaked at about 9% in the year ending June 2022. Unless schools increased their costs by 9% that year, the inflation-adjusted cost actually dropped. The price did not keep up with the general increase in costs for goods and services.
This might not be much consolation to consumers who are tired of paying more. But it's relevant to the discussion of price increases in higher education.
Grants and "averages"
CollegeBoard notes, "Changes in sticker prices tend to garner the most media attention. However, it is important to note that most undergraduate students do not pay the full sticker price."
Indeed, that's one of the things CollegeIQ helps students and families discover: what is the true price of attending college after aid?
CollegeIQ publishes the average net price paid after aid for students by income level for each school. It also publishes the Merit Price™, which is how much a student without need typically pays after the school pitches in merit scholarships.
At all but the most prestigious colleges, the price you pay is often less than the sticker price, even if you don't qualify for need-based aid.
Read this primer about need-based aid and merit aid.
A caveat is necessary, though...these are averages. And few people actually pay the average. That's why it's important to look at the whole picture and how much you are asked to pay for each school.
It's good news
Inflation-weary consumers probably don't care much that prices aren't keeping up with inflation because inflation has been so high. At the same time, in prior decades, the cost of college outpaced inflation considerably. That trend has reversed in the past decade. That's good news.