Trends in Higher Education Reports Find Published Tuition and Fees in Grant Aid for Students Continue to Grow at Moderate Rates

NEW YORK — The College Board’s 2018 Trends in Higher Education reports released today—Trends in Student Aid and Trends in College Pricing—show a continuation of moderate growth in college prices and grant aid and declines in undergraduate student borrowing.

Published tuition and fee prices of colleges and universities were about the same in 2018-19 as in 2017-18, after adjusting for inflation. At public four-year institutions, average in-state tuition and fees rose by $250 (2.5% before accounting for last year’s inflation rate of 2.9 %), from $9,980 in 2017-18 to $10,230 in 2018-19. Private nonprofit four-year institutions had the largest increase—$1,130 (3.3%), from $34,700 in 2017-18 to $35,830 in 2018-19.
Total grant aid per full-time equivalent (FTE) undergraduate student rose by 4% (after adjusting for inflation) between 2016-17 and 2017-18, slightly faster than in the four preceding years, but much more slowly than in 2009-10 and 2010-11, when large increases in grant aid and tax credits kept the net prices students paid down, even in the face of rapid price increases. Average grant aid per undergraduate student rose by 42% between 2007-08 and 2012-13, but by only 14% between 2012-13 and 2017-18.

Both total education borrowing and average federal loans per FTE undergraduate student declined for the seventh consecutive year in 2017-18. Undergraduate students borrowed an average of $4,510 in 2017-18, down from $5,830 (in 2017 dollars) in 2010-11. However, average federal borrowing per graduate student, which peaked at $19,180 in 2010-11 before declining to $17,340 in 2014-15, rose for the third year in a row, to $17,990 in 2017-18.
“Understanding the impact of rising college prices requires considering both changes in the amounts of aid available to students and the distribution of that aid. Growing inequality in family income exacerbates the challenges low- and moderate-income students face in financing their education,” said coauthor Jennifer Ma, senior policy research scientist at the College Board.

The average increase in published tuition and fees over the 30 years from 1987-88 to 2017-18 for in-state students attending public four-year colleges equaled 57% of the increase in income ($11,840) of the middle 20% of families in the United States, compared with 9% of the increase in income ($77,650) of the 20% of families with the highest incomes.

However, in 2015-16, when 81% of full-time students at public two-year colleges from families with incomes below $35,000 received enough grant aid to cover all of their tuition and fees and 11% paid $2,500 or more, among dependent students from families with incomes of $120,000 or higher, 24% paid no tuition and fees and 44% paid $2,500 or more.

Almost 60% of full-time dependent students from families with incomes below $35,000 at public four-year colleges received enough grant aid to cover their tuition and fees. By contrast, only 8% of full-time dependent students from families with incomes $120,000 or higher at public four-year colleges received enough grant aid to cover tuition and fees.

“Our 2018 reports highlight how much the trends in college financing have changed in recent years,” said Sandy Baum, nonresident fellow in the education policy program at the Urban Institute and coauthor of the 2018 Trends in Higher Educationreports. “Between 2007-08 and 2010-11, tuition prices rose rapidly, particularly at public colleges and universities. Federal expenditures on student aid increased dramatically, helping a growing student population to finance their education. At the same time, students borrowed more and more. Since 2010-11, all of these trends have reversed.”

The composition of the grant aid students rely on has changed dramatically in recent years. The federal share of total grant aid to undergraduate and graduate students combined, which rose from 28% in 2007-08 to 44% in 2010-11, declined to 32% in 2017-18. Moreover, Pell Grants comprise a declining share of federal grants, falling from 78% of the total in 2007-08 to 68% a decade later, as aid to veterans rose from 15% to 31% of federal grants to postsecondary students.

“The Trends in Higher Education series provides insight into trends in college pricing and financial aid,” said Jessica Howell, the College Board’s vice president of research. “A college education is critical to one’s long-term financial security, yet many students and families face real financial barriers to college enrollment and success. The data on college prices and student aid included in these reports create a context for evaluating public policies designed to increase educational opportunities.”

Key College Pricing Findings

• Average published tuition and fees for full-time in-state students at public four-year colleges and universities increased by 2.5% ($250) before adjusting for inflation, from $9,980 in 2017-18 to $10,230 in 2018-19.

• The increase in average grant aid and tax benefits for full-time students at public four-year institutions covered 61% of the $2,030 (in 2018 dollars) increase in average tuition and fees between 2008-09 and 2013-14, but between 2013-14 and 2018-19, increases in aid covered 45% of the $640 price increase.
• Average published tuition and fees for full-time out-of-state students at public four-year colleges and universities increased by 2.4% ($620) before adjusting for inflation, from $25,670 in 2017-18 to $26,290 in 2018-19.
• Average published in-district tuition and fees at public two-year colleges increased by 2.8% ($100) before adjusting for inflation, from $3,560 in 2017-18 to $3,660 in 2018-19.
• On average, full-time students at public two-year colleges receive more than enough grant aid and federal tax benefits in 2018-19 to cover tuition and fees. After this aid, they must pay an estimated average of about $8,300 in living expenses out of pocket.
• In 2018-19, average published tuition and fees for in-district students at public two-year colleges range from $1,430 in California and $1,840 in New Mexico to $7,090 in New Hampshire and $8,190 in Vermont. Average published tuition and fees for in-state students at public four-year institutions range from $5,400 in Wyoming and $6,360 in Florida to $16,460 in New Hampshire and $16,610 in Vermont.
• Average published tuition and fees at private nonprofit four-year institutions increased by 3.3% ($1,130) before adjusting for inflation, from $34,700 in 2017-18 to $35,830 in 2018-19.
• The increase in average grant aid and tax benefits for full-time students at private nonprofit institutions was large enough to cover the $4,060 (in 2018 dollars) increase in average tuition and fees between 2008-09 and 2013-14, but between 2013-14 and 2018-19, increases in aid covered only about 60% of the $3,330 price increase.
• State and local funding per student rose in 2016-17 (in inflation-adjusted dollars) for the fifth consecutive year, following four years of decline. Funding per student fell by 24% from $8,270 (in 2016 dollars) in 2006-07 to $6,320 in 2011-12, and then rose by 21% to $7,640 in 2016-17.

Key Student Aid Findings

• In 2017-18, undergraduate students received an average of $14,790 per FTE student in financial aid: $8,970 in grants, $4,510 in federal loans, $1,240 in education tax credits and deductions, and $70 in Federal Work-Study (FWS).
• Grant aid per FTE undergraduate rose by 42% between 2007-08 and 2012-13, from $5,560 (in 2017 dollars) to $7,890, and by another 14% to $8,970 by 2017-18.
• Pell Grant expenditures rose from $17.2 billion (in 2017 dollars) in 2007-08 to $40.1 billion in 2010-11, but declined to $28.2 billion by 2017-18. The number of Pell Grant recipients fell in 2017-18 for the sixth consecutive year, but the 7.0 million recipients represented a 27% increase from 5.5 million in 2007-08.
• Colleges and universities increased their grant aid for undergraduate and graduate students by 24%, from $48.4 billion (in 2017 dollars) in 2012-13 to $60.0 billion in 2017-18. Over these five years, federal grant aid declined by 12% and grant aid from states and from employers and other private sources rose by less than 10%.
• In 2017-18, annual education borrowing declined for the seventh consecutive year. Students and parents borrowed $105.5 billion, down from $127.7 billion (in 2017 dollars) in 2010-11. Federal loans per FTE undergraduate student also declined in 2017-18 for the seventh consecutive year—from $5,830 (in 2017 dollars) in 2010-11 to $4,510 in 2017-18. Federal loans per FTE graduate student declined from a peak of $19,180 in 2010-11 to $17,340 in 2014-15, before rising to $17,990 in 2017-18.
• The number of parents borrowing PLUS Loans in 2017-18 was 12% of the number of undergraduates taking subsidized and unsubsidized Direct Loans, but the average parent loan was $16,450, 2.5 times as much as the average undergraduate student loan.
• In 2015-16, 5% of master’s degree recipients, 20% of doctoral degree recipients, and 50% of professional degree recipients borrowed $100,000 or more to fund their graduate school study.
• In 2016-17, the 59% of bachelor’s degree recipients from public and private nonprofit institutions who borrowed graduated with an average of $28,500 in debt.
• Average debt among public four-year college graduate borrowers rose by 16% ($3,700 in 2017 dollars) between 2006-07 and 2011-12 and by 3% ($700) between 2011-12 and 2016-17. Among private nonprofit bachelor’s degree recipients, the increases were 6% ($1,700) between 2006-07 and 2011-12 and 3% ($900) between 2011-12 and 2016-17.
• As of March 2018, 52% of the outstanding federal education loan debt was held by the 14% of borrowers owing $60,000 or more; 56% of borrowers with outstanding debt owed less than $20,000.

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