School expenses continue to account for a substantial chunk of students’ earnings, according to a newly released report from the College Board. However, the pace at which prices are climbing has moderated. This has led to reduced borrowing.
For in-state students attending a public university, tuition costs averaged more than $9,400 in 2015-16, the College Board reported from its Trends in Higher Education analysis. That’s up by 3 percent from the previous school year, when the average was $9,145.
For out-of-state public college or university students, the average cost was nearly $23,900, up 3.4 percent from $23,100.
Tuition costs down at two-year colleges
“Tuition costs at private non-profit four-year institutions are up 1 percent in last 10 years.”
However, when factoring in grant aid, students attending two-year colleges today are spending less than they did 10 years ago, according to the Trends in Higher Education report. After accounting for taxes, full-time students at these two-year colleges paid approximately $1,150 less in 2015-16 than they did in 2005-06. Meanwhile, at private nonprofit four-year institutions, tuition is roughly 1 percent more versus one decade ago.
Jack Buckley, senior vice president at the College Board, pointed out that these numbers are something that students – along with their parents – have to take into account when pursuing a student loan estimate.
“These data provoke a necessary conversation about college financing,” Buckley explained. “As the price of postsecondary education continues to rise, we need innovative thinking around federal, state, and institutional aid that will allow all students and families to feel confident that they will be able to pay for college.”
Price increases more tepid
The report also referenced how while the dollar value of tuition is higher today than in years gone by – 40 percent more in 2015-16 versus 2005-06 at public four-year institutions and 29 percent more at public two-year educational establishments – the pace of price growth has slowed.
Sandy Baum, senior fellow at the Urban Institute, pointed out that this is a classic case of good news-bad news.
“The post-recession trends we documented last year have continued,” Baum explained. “Price increases are moderate by historical standards with continuing declines in student borrowing.”
She cautioned that the government needs to do more to ensure everyone who wants to go to college has the financial means to do so.
Several lawmakers – such as Massachusetts Sen. Elizabeth Warren – have suggested that students be able to take advantage of refinance rates, similar to real estate, only for tuition. Supporters say this would enable them to pay down the principle on their loans much quicker.