How much has tuition really increased?
Our country has seen big college tuition increases in recent years. N.C. State University economist Mike Walden considers whether the numbers we hear quoted tell the whole story.
“The College Board, which is an organization that closely tracks everything related to college and universities, shows that average annual tuition and fees nationwide for the average college and universities increased 50 percent since the year 2000. And that’s after taking out inflation. But the problem with this measure is that it doesn’t take into account the effect of scholarships, particularly merit scholarships, where a student will apply, get a merit scholarship, which then serves to reduce their tuition and fees. If you subtract out the availability and the awarding of merit scholarships, then the average tuition and fees paid by the average student since 2000 has gone up – it’s gone up, but it’s gone up a much more modest 18 percent. So it’s very important there for the parents and students when they’re looking around at colleges and universities, don’t necessarily be shocked by those increases they’ve seen in tuition.
“Think of that as the sticker price on a vehicle. And you know if you go buy a vehicle, you’re going to bargain. And the seller knows and you know you’re probably going to pay a price that’s less than that sticker price. Think of those posted tuition fees at colleges and universities as the sticker price you’re going to have to look for, and you want to look for scholarships that (are) going to reduce that.
“So, again, yes, college costs have gone up but not nearly as much as we might think when you take into (account) the aid that colleges are giving back.”
Category: Economic Perspective