It’s that time of year. Colleges and universities will announce their tuition increases for the coming academic year soon, if they haven’t already done so. Some of them are approaching $100,000, and they will cross that threshold soon—probably next year or the year after. The media will notice, and we will see more pronouncements of skyrocketing college costs.
A $100,000 price tag is, indeed, a staggering amount to pay for college. Few can afford that. But few students actually pay that much. Only a handful of elite private colleges have such a high sticker price, and it is only paid by those with high incomes. Sticker prices elsewhere, particularly at public institutions, are considerably lower. And financial aid reduces the price of college below the sticker price for most students. Among those dependent students living away from their parents attending 4-year colleges and universities, fewer than one-quarter pay the sticker price.
How much do students really pay? How has that amount changed over time? How do the answers to these questions depend on an individual student’s financial circumstances and the type of institution they attend?
Despite the obvious importance of these questions, answering them is not simple. Available data exists to examine levels and changes in the sticker price and the average “net price,” which factors in grant-based financial aid. But unless you pay the sticker price or have average finances, these data are insufficient.
The purpose of this report is to track college prices for students with different financial circumstances enrolled at 4-year public and private colleges and universities. It updates my earlier analysis, now using data through the 2024-2025 academic year. I rely on data sources that I have been collecting annually for the past several years that go beyond official reports. Among public institutions, I examine pricing at state flagships or other research-intensive institutions (Carnegie Classification of “R1”) separately from other publics. Private colleges are distinguished by their endowment level, with a special emphasis on those with very large endowments that are subject to the endowment tax. Currently proposed legislation places them at risk of facing a substantially increased tax.
The results of this analysis indicate that inflation-adjusted college prices are falling over the past 5 to 10 years for virtually all students enrolled at public and private colleges and universities. Only high-income students at private institutions with very large endowments pay more now than they did a decade ago. No other group of students at any other type of institution faces an increased cost. Most of them now pay less.
Alternative sources of data are necessary to track college costs across the income distribution
Publicly available data on college costs focus on two main statistics: the “cost of attendance” and the average “net price.”1[1] The cost of attendance represents the total of all listed tuition and fees, living expenses (including food, housing, travel, and other personal expenses), and other educational expenses (like books and supplies). It is often described as the sticker price.
The sticker price does not represent how much students actually pay because it ignores financial aid. That aid could be need-based or merit-based aid, but in either case it reduces a student’s actual cost below the sticker price. The net price subtracts grant-based financial aid. The most recent data show that that the sticker price and average net price have been falling during the last half-decade. But these data do not show how trends in net price vary depending on family income. The purpose of this report is to provide alternative sources of data to conduct such an analysis.
Net price calculator data show that college costs are falling for most students
Beginning in 2011, the federal government required all colleges and universities receiving federal funding to post a “net price calculator” (NPC). These tools are designed to provide an individualized estimate of the cost of attending the institution as a function of the students’ and parents’ finances, among other things. The intent of the legislation, enacted in 2008, was to provide greater transparency in college pricing, a goal which I support.
These tools, though, have been subject to considerable criticism regarding their availability, ease of use, and accuracy. Still, they offer perhaps the best available insight into the variability in pricing that occurs across students with different financial backgrounds.
Since 2019, my research team has annually used these tools at selected 4-year colleges and universities to estimate college prices.2 They are grouped into those that are private, not-for-profit and public institutions. Private institutions were separated into those whose endowments were above and below $100,000 per student in 2019. Public institutions were separated into those that were state flagships or other research-intensive institutions versus others that are more regional in nature. In each of the four categories, I randomly selected 50 institutions, combined to include a total of 200.
This year, I have further divided highly-endowed private institutions into those whose endowments are above $500,000 per FTE and those between $100,000 and $500,000 per FTE. There are 15 colleges and universities in the former category and 35 in the latter among those selected. The purpose of making this further distinction is because the very highly endowed institutions are currently subject to a tax on the investment returns of their endowments (an “endowment tax”). Proposals have been put forward in Congress to substantially increase that tax. One of the justifications is high sticker price at these colleges and universities. This makes a separate analysis of their pricing structure particularly relevant now.
At each of these institutions, we entered four sets of family financial circumstances. We used the 2019 Survey of Consumer Finances (SCF) to determine the 25th, 50th, 75th, and 90th percentiles of the income and asset distributions. In each subsequent year, we use the same values adjusted for inflation. Those family income values today are $40,000, $80,000, $135,000, and $240,000 (rounded).3 Along with the net price estimates associated with these percentiles, I also report statistics on the full cost of attendance (“sticker price”), which is the value that often receives the most attention, despite the fact that so few students actually pay it.
The results of this analysis are reported in Figure 1. It is difficult to see much evidence for rising prices in these figures across income categories or types of institutions. Perhaps high-income students at private colleges with large endowments have experienced rising prices in the last couple of years but only after they fell just before that.
Beyond that, prices have fallen for all other categories of students and institutions. The evidence suggests that COVID-19 and the ensuing high inflation after 2020 may have contributed to falling real prices (prices increased but slower than the rate of inflation). After that, prices have largely stabilized or continued to fall.
Tables 1a-1e report specific dollar values and percentage changes in net prices between 2019-20 and 2024-25 across institutions and students’ financial circumstances. Among students with below-median family incomes, net prices fell by roughly 10% to 40% depending on specific income and type of institution. Higher-income students faced more modest reductions, but they occurred uniformly across types of institutions.
There are other notable patterns in these data. The first is the extent to which the relationship between family income and the net price is steeper at private colleges and universities, particularly those with large endowments, relative to public institutions. The second is the fact that prices for lower-income students are the lowest at private institutions with the largest endowments and highest sticker prices. This is the group of schools that is being threatened with an endowment tax, partially motivated by their high sticker price (which only high-income students pay).
Proprietary data largely shows falling or steady net prices at highly selective colleges
Although these data from net price calculators are available from a broad swath of higher education institutions, they are limited to some extent by concerns about their quality. An examination of the specific results from that exercise highlights some concerns. These include: net price estimates that may reflect pricing in earlier years; calculators that are not functioning (dropped from the analysis); and results that don’t necessarily make sense (like lower-income students paying more than higher-income students). It is likely the case that all these flaws average out given the number of institutions used within categories, but there are some concerns regarding the quality of these data.
Instead, I use an alternative source of proprietary data available to me from MyinTuition Corp., a nonprofit organization that I run. For a limited set of institutions, I have access to administrative records of basic family finances along with net prices paid for all students eligible for need-based financial aid (with no personally identifying information). For 14 of these institutions, these data exist going back as far as 2015-16.4 Most of them have endowment levels that exceed the endowment tax threshold. They have given permission to use these data for this exercise. I used those data to generate net price estimates for students at the same income levels (inflation-adjusted) as those used earlier.
Figure 2 reports the results of this analysis. It shows that for most students, college prices have fallen considerably over the past decade. For those below the 75th percentile of family income ($135,000), prices have fallen 20% or more in inflation-adjusted terms. Even as high as the 90th percentile ($240,000), prices are unchanged over the past decade.
At the highest income levels, though, college prices have risen. At these institutions, most if not all of the students with very high incomes pay the full sticker price—little, if any, merit aid is available for those students. But need-based financial aid does not run out at these institutions until a student’s family has income that is typically above $300,000 or more. For those students, the cost of going to college has risen by around 10% over the past decade.
Falling prices do not necessarily translate to affordable prices
The evidence from proprietary MyinTuition data is consistent with that obtained from net price calculators for the category of highly endowed private colleges. This correspondence suggests that data gathered from net price calculators is reasonably reliable as well. Collectively, these data indicate that the perception of rising college costs in the last five to ten years is not accurate.
But that does not mean that college is broadly affordable. Whether or not a student whose family earns $300,000 or more per year can afford a $90,000 price tag is an open question. But at many institutions, families earning $40,000 are still expected to come up with $15,000 to $20,000 per year. It seems clear that amount is not affordable. Only the highly endowed institutions charge a price that these low-income families can afford through, say, limited student employment. A large tax on the endowments of these institutions may imperil their ability to offer that level of financial aid.
It is not difficult to understand why there is such uncertainty regarding college pricing. The system is sufficiently complicated that it is difficult for a student or family to know how much it will cost them to attend college. Politicians and those in the media similarly face information constraints in setting policy and reporting on college costs. We need to improve the transparency of college pricing if we are to increase awareness of its true cost. Transparency and affordability in our college pricing system are critical issues. The emphasis on rising sticker prices should not be our focus.
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