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Do I really need this student loan? The latest trend in tuition fees.

Pabio October 30, 2024

Americans love to complain about the rising cost of college. But consider this: The average student at a public state university now pays just $2,480 net per year in tuition and fees.

Of course, tuition is only one item on the list of college expenses. Room and board may cost more. But the total cost of attending a public college goes down, rather than up, when adjusted for inflation.

The average net price of tuition and fees for an in-state student at a public four-year college fell 40 percent in a decade, after inflation, from $4,140 in 2014-15 to an estimated to $2,480 in 2024-2025, according to a new report of the College Council.

“The idea that the cost of college is out of control is not accurate,” said Marc Beckerpresident of the Association of Public and Land Universities. “And the College Board data shows it.”

The figures represent the average net price of college tuition and fees for a first-time student, after deducting grants, scholarships and other discounts and accounting for inflation.

(The College Board takes into account financial aid and inflation to show actual price changes over time. If you ignore both inflation and aid, then tuition increases slightly, other reports have shown.)

The total cost of attending a public college is also falling, but not as quickly. The net cost of attendance in the state, including housing, meals and other expenses, increased from $23,050 in 2014 to $20,780 in 2024, after accounting for subsidies and inflation, a noted the College Board. That’s because room and board make up a large portion of an in-state student’s annual grade.

Prices are falling in academia

Prices fall in the higher education sector as the industry faces drop in registrations and cost-conscious customers, financial experts say.

The falling cost of college, however, is not the trend making headlines. Candidates faint every time someone presents a new list of the most expensive colleges: those who charge more than $70,000 one year of tuition and fees, or more than $400,000 in total costs over four years.

But these are “indicative” prices, and research suggests most students do not pay them. Elite colleges often commit to meet financial needs of each student. Colleges regularly offer discounted rates to attract deserving students.

Even at private, nonprofit colleges, average tuition and fees have declined from $18,680 in 2014 to about $16,510 in 2024, after accounting for inflation and aid.

At public two-year colleges, net tuition has fallen into negative territory. The average student in 2024 receives enough aid to fully cover tuition and fees, with $710 remaining for other expenses.

The numbers come from the College Board’s annual report on trends in college pricing and student aid.

The price of university studies is falling

The falling costs of public colleges reflect two economic trends, both beneficial to the consumer, the College Board reports.

The price of university tuition is falling. Published tuition and fees averaged $11,610 in 2024 for in-state students at public four-year colleges, down from a high of $12,830 in 2019, after inflation.

Flagship public universities in 45 states charge less in tuition and fees in 2024 than in 2019, after inflation.

And student aid is increasing. Per-student grants increased from $8,000 in 2014 to $9,130 in 2024 for in-state students at public four-year colleges, in inflation-adjusted dollars.

The overall amount of aid distributed by colleges and their states has increased over the past 10 years, the College Board said.

About half of public university students graduated debt-free in 2022-23, compared to about two-fifths of students a decade earlier.

“State governments have reinvested in higher education over the past decade,” after a series of dramatic budget cuts during the Great Recession, said Nicholas Hillmanprofessor and expert in higher education finance at the University of Wisconsin-Madison.

Americans expect tuition hikes

Falling prices and reducing debt go against public opinion. About half of Americans expect tuition fees at public colleges will increase over the next year, while only 9% expect a decline, according to recent survey data from the Federal Reserve Bank of New York.

Public opinion is not entirely wrong. Tuition costs are gradually increasing in much of the country, but inflation is rising more quickly.

Tuition fees paid by American households have increased increased by less than 9% since 2019, according to an analysis by the Chronicle of Higher Education. In contrast, overall prices increased by more than 22%.

Public skepticism has caused many colleges to curb tuition increases, said Jason Delislenon-resident senior fellow at the Urban Institute’s Center on Education Data and Policy.

“People are more price sensitive. They wonder if they should go to college, Delisle said. “They wonder if they should go into debt.”

University enrollment has been declining for a decade, although there are signs of a rebound. The shortage of students is forcing higher education institutions to compete on price for their businesses.

Colleges “are not in charge”

Colleges are “in a bit of a buyer’s market,” Mr. Delisle said. “They are not in charge.”

College pricing is complex and admissions officers struggle to explain math to prospective students and their families, higher education experts say.

This is because many colleges charge students based on their ability to pay. In this equation, the sticker price is just a starting point. Students pay tuition at different rates, a concept that no dollar figure on a college’s website can really convey.

“There’s no uniform price that everyone pays,” Hillman said, “like on an airplane.”

Tuition costs also vary widely from state to state. The cheapest state is Florida, the College Board reports, with average published tuition and fees of $6,360 for in-state students. The most expensive is Vermont, with an average of $17,490.

But almost all states charge less in 2024 than in 2019, after inflation. Public universities subsidize in-state students by charging a premium to out-of-state students. On average, these students pay about $30,000 more.

“It’s difficult to make a blanket statement about all 50 states,” Becker said. “But if you look nationally, the net effect is that there has been an increase in investment in higher education.”