In today’s news, you hear about college tuition costs rising all the time. But are prices really getting higher? It’s a complicated question, but it’s one that you need to know about if you’re looking to go to college today. A lot of this information can be found here and here, and both links are worth a look if you want as much detail as possible.
Actual Price versus List Price
The first thing you need to understand about college tuition prices is that there is a difference between actual price and list price.
List price is what most are talking about when they talk about college tuition prices rising. List price is the price that colleges will actually list in brochures or other informational sources. It’s not influenced at all by other factors, such as financial aid, scholarships, or other means of reducing the price.
The actual price, on the other hand, is the price that students and their families actually wind up paying, in practice. It accounts for the financial aid that the students are getting.
According to the New York Times source, the actual price of attendance for a year of education at a private college has increased 1.6% on top of inflation, or 4% not controlling for inflation, per year. At public four year colleges, the increase was 2.3% per year, or 5% per year not controlling for inflation. Public two-year colleges had their prices fall on average by 0.3% per year relative to inflation.
The point of these figures is simply to say that prices have increased, but they have not increased as much as many sources seem to be indicating. Furthermore, they have increased proportionally with many other industries.
Other facts and figures
According to The Daily Beast source, about 68% of high school seniors are still enrolling in two or four year colleges immediately after high school graduation. Furthermore, the college degrees that they earn will increase their lifetime earning by substantially more than the average cost of college at a four-year school, which is $23,066 per year, or $92,264 for four years. The low end of the average increase in overall earnings is $280,000. Taken from the same article, a figure from the NCES states that “full-time, annual median earnings for college grads between 25 and 34 are about $15,000 per year more than they are for high school grads.”
How does this impact me?
If nothing else, it means that you shouldn’t lose hope that you can attend college and obtain a degree without breaking the bank! It means that if you pursue full financial aid and scholarship opportunities, you should be able to make your college education significantly more affordable. If you want to see some of those scholarship opportunities, check out the Peterson’s scholarship search tool.
When you’re looking at colleges and their prices, be sure to do enough investigation that you figure out what the actual price of college is going to be for you, versus the list price that the college might originally tell you. Furthermore, be aware that the “elite” schools out there are more likely to have higher list prices and higher actual prices, and keep in mind that if you come from a higher-income family, you’re likely going to receive less financial aid and have a higher actual price. That said, someone from a lower-income family is likely to receive more financial aid and have a lower actual price.
In general, the impact of this information on you is to suggest that you learn as much as possible about the prices you’re facing and how to alleviate them before diving into your college education.