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College tuition has increased — but what’s the actual cost?

More and more Americans are going to college as tuition increases. But what’s the actual cost of higher education? Here’s an analysis of how colleges finances work and how tuition factors in.

Updated on Thu, March 23, 2023 by the USAFacts Team

More and more Americans are going to college. According to data from the Department of Education National Center for Education Statistics (NCES), in 1980, 50% of high school graduates between the ages of 16 and 24 were enrolled in college; in 2016, it was 70%. In 2016, 19.3 million undergraduate students were enrolled in higher education institutions. 70% were enrolled at public schools, 23% at private non-profits schools and 7% at private for-profit schools. The cost of going to college has also changed since 1980 — however, how much it has changed depends on whether you look at the “sticker price” or the net price after financial aid.

Tuition is an increasingly important revenue source

After adjusting for inflation, the average undergraduate tuition, fees, room and board has more than doubled since 1964, from $10,040 to $23,835 in 2018. Tuition has recently grown the fastest at public and private non-profit institutions, for which tuition has gone up 65% and 50%, respectively, since 2000. Tuition at private for-profit institutions has only increased 11%. However, as we describe below, the sticker price (our term for full tuition without aid) only reflects what one shrinking group of students pays for college.

Average undergraduate tuition, fees, room and board Constant 2017-18 dollars

As tuition has increased, the revenue makeup for many institutions has also shifted, with government funding making up a smaller proportion of revenue for schools, and tuition payments making up a larger proportion. At public institutions, state, local and private funding has decreased from making up 50% of revenue in 1981 to 29% in 2016. It’s not just public schools experiencing a shift in funding sources. Private institutions, which have historically relied on tuition and fees even more than public institutions, have also seen federal funding drop from 19% of revenue to 13%. Tuition payments are making up a larger proportion of their revenue as a result. University-affiliated hospitals are also increasingly important revenue streams for public and private schools, as well as a growing component of institution expenditures.

Average undergraduate tuition, fees, room and board (Constant 2017-18 dollars, by institution type)

Non-profit Institutions

Average undergraduate tuition, fees, room and board (Constant 2017-18 dollars, by institution level)

Two-year Institutions

Despite these shifts in revenues, colleges have not really altered how they spend money. Public schools spend heavily on instruction and student services, with expenditures shifting slightly from instruction to student services during the last 30 years. Both private non-profit and for-profit institutions also spent most of their revenue in these areas, though non-profits have shifted more dollars away from student services and more toward “Other” spending (a miscellaneous category that contains expenses that don’t fit in other categories, such as an early retirement program for faculty and staff ), while for-profit institutions have shifted dollars toward student services.

However, expenditures can vary greatly by institution. For example, top research universities may spend a much larger proportion of expenditures on research—for example, University of California Berkeley spends 26% of expenditures on research—whereas many post-secondary institutions, such as Berkeley City College, may spend nothing on research.

Institution revenues (Public institutions)

Auxiliary enterprises in the United States

$27,581,335,730

Institution revenues (Private non-profit institutions)

Investment income gains (losses) in the United States

-$2,736,521,305

Institution revenues (Private for-profit institutions)

Student tuition and fees in the United States

$14,429,842,000

Sticker v.s. net price

While the sticker price of college is increasing, fewer students are paying the full price due to grant aid. For example, while the average tuition at public institutions in 2016 was $17,459, the average tuition revenue institutions received on average per full-time student was only $7,547.

Federal grants are the most common type of aid students receive — about two in five students at public and non-profit schools receive some form of federal grant aid compared to two-thirds of students at for-profit schools. There are four major types of federal grants , the largest of which is the Pell Grant program, which is available for students for whom the difference between cost of attendance and the expected family contribution exceeds a certain amount (roughly $600 for full-time students according to information provided in a student’s FAFSA ( IFAP )).

Across almost all categories and school types, more students are awarded grant aid to pay for school, meaning fewer students are paying the list price. In 2000, 44.4% of all undergraduates received grant aid, whereas in 2016, that number increased to 63.1%.

Institution expenditures (Public institutions)

Instruction in the United States

$108,162,492,300

Institution expenditures (Private non-profit institutions)

Student services, academic and institutional support in the United States

$32,937,346,000

Institution expenditures (Private for-profit institutions)

$9,198,033,000

Note: These categories are not mutually exclusive — many students receive multiple types of aid. The population covered in this table is first-time, full-time students at degree-granting institutions.

The average amount of grant aid has also increased, but few types of grant aid have increased at the same rate as tuition, which has increased 53% since 2001.

While federal grants are the most common form of aid, the largest forms of aid from a monetary standpoint, are institutional grants and scholarships. The average amount of federal aid received per student receiving aid ranged between $4,453 and $5,208 per school year.

Percent of full-time, first-time undergraduate students awarded grant aid (Public)

Percent of full-time, first-time undergraduate students awarded grant aid (private non-profit), percent of full-time, first-time undergraduate students awarded grant aid (private for-profit).

So, what does this mean most students end up paying? For the roughly 55% of students receiving any form of federal aid—including federal grants, loans, or work-study aid — the average annual net price of the school, or the sticker price minus any government or institutional grants and scholarships, was $16,147 in the 2016-17 school year.

This average net price varies based both by the student’s family income and by the type of school. A family earning $30,000 per year may on average pay $9,510 per year for their child to attend a four-year public institution (48% of the average sticker price). Enrolling in a four-year, private non-profit institution would cost $20,150 per year, or 44% of the average private non-profit sticker price.

Note: Net price data is for students receiving some form of federal aid—including federal grants, loans, or work-study aid. For this reason, data for students from higher-income families is more limited and may not be representative.

When looking at students receiving any form of federal aid, the net price of college has not dramatically changed since 2010. While the sticker price average for four-year institutions has increased 12.4% since 2010, the net price has only increased 1.7%. For two-year institutions, the sticker price increased 10.8%, whereas the net price decreased 5.6%. The percent of students receiving any form of federal aid has also increased from 36.6% in 2001 to 55.9% in 2016. This appears to be part of a larger trend of federal funding shifting from operating grants and non-operating appropriations to non-operating grants, which includes grant aid to students like Pell Grants.

Note: Net price data is for students receiving some form of federal aid—including federal grants, loans, or work-study aid.

However, not all students who need financial help qualify for federal aid and increasing sticker prices are still felt by many students. In 2017, while 56% students received federal aid, 83% of students received either government or institution grants or student loans (excluding Parent PLUS loans). For many students, what’s left over after grant aid — if they even receive grant aid — requires student loans.

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Department of Education, National Center for Education Statistics, Digest of Education Statistics

Department of Education, College Scorecard

Department of Education, Integrated Postsecondary Education Data System

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What You Need to Know About College Tuition Costs

The cost of college might seem less expensive at state schools, but sticker prices can be deceiving.

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The average price at all ranked private colleges increased by about 5.5% between the 2023-2024 school year to 2024-2025.

Many families have felt the pinch of rising college tuition costs over time. Those prices are a lot higher today compared with two decades ago.

For instance, the average cost for tuition and fees among ranked private National Universities – schools that are often research-oriented and offer bachelor's, master's and doctoral degrees – has risen by about 41% since 2005 when accounting for inflation, according to U.S. News data.

Comparing the 2023-2024 school year to 2024-2025, the average price at all ranked private colleges increased by about 5.5%, according to data reported to U.S. News in an annual survey. Meanwhile, tuition hikes for both in-state and out-of-state students at ranked public schools were less percentagewise, rising 2.2% and about 2.4%, respectively, from the prior year.

"As everything else increases, so does the cost of running a college or a university," says Katie Conrad, executive director of scholarships and financial aid at Georgia Institute of Technology . "We're experiencing the same increase in utilities, food and materials. We also have increased services that we offer students. There's a big emphasis on mental and emotional health. And that's not necessarily a service that was provided 10 or 20 years ago at the level that it is now. As we increase services to students, we see the increase in tuition."

The year-over-year numbers look a little different when inflation is considered. Tuition and fees at private ranked colleges increased 2.5%, while at public ranked schools they declined about 0.6% for in-state students and about 0.5% for out-of-state students.

About 81% of families said they eliminated a college from consideration at some point in the research and application process due to cost, according to the 2024 Sallie Mae/Ipsos survey How America Pays for College . But many higher education experts recommend that prospective students look beyond published prices, since the tuition listed may not be the actual amount they'll pay after institutional grants and other financial aid.

For college-bound students and their families, here's what to know about tuition costs.

How Much Is College Tuition?

In looking at schools ranked by U.S. News, the average cost of tuition and fees for the 2024-2025 school year is $43,505 at private colleges, $24,513 for out-of-state students at public universities and $11,011 for in-state residents at public schools. That is, the average tuition and fees to attend an in-state public college are nearly 75% less than the average sticker price charged at a private institution, according to U.S. News data.

At public two-year institutions, tuition and fees cost $3,990 on average for in-state, in-district students in 2023-2024, according to data collected in the College Board's annual survey, Trends in College Pricing and Student Aid 2023 .

What Are the Differences Between Tuition and Fees?

The biggest chunk of college costs is usually tuition – the amount of money required for instruction. Especially at the undergraduate level, students are often required to pay fees , and these additional costs usually need to be paid to enroll in and attend class.

Fees vary per college, but are typically associated with the "services or facilities that the student would encounter being on campus," Conrad says. Those can include lab fees, activity fees, technology fees and health fees, for instance.

Most private college fees are low, says Shannon Amundson, director of financial aid at Davidson College in North Carolina. Davidson's student fee goes to the student government to pay for student activities, she says.

"That's pretty common in the private school world," Amundson says. "Then you look at other systems where those fees pay for things that aren't approved for increases in tuition. If you look at state systems where they're charging maybe facility fees and technology fees, and their tuition is set by the state, and they can't pay for the things that they need to pay for, they use those fees to do that. It really differs across the system, and students and families should be paying attention to what the schools are charging that they're looking at."

How Do I Use a Tuition Calculator?

The cost of attendance isn't always clear, since many families don't pay the sticker price once financial aid and institutional grants are factored into the bill. So experts advise families to fill out the net price calculator, which is available on each college's website – a federal requirement.

Net price is the amount students pay to attend an institution for an academic year after subtracting scholarships and grants. In essence, net price is the final out-of-pocket price a family can expect to pay, and it's often lower than the published price.

The Department of Education's College Scorecard includes links to schools' net price calculators. These calculators – furnished with first-time, full-time undergraduate students in mind – produce estimated values based on the information the student or parent provides.

Which Colleges Are the Least Expensive?

When it comes to published prices, attending a state school as an in-state student might be the least expensive option among four-year colleges.

However, a few regions and states have tuition reciprocity programs . For example, under the New England Board of Higher Education's Tuition Break program, residents of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont may be eligible to receive discounted tuition at out-of-state public colleges and universities within New England.

Prices among public schools across the country vary. State schools in Florida, followed by Wyoming, charged in-state, full-time students the least on average in 2023-2024 among four-year public colleges, according to the College Board. New Hampshire and Vermont had the most expensive published tuition and fees, on average, for full-time, in-state students.

Tuition and fees at flagship universities for in-state students often cost more compared with other colleges and universities in the state. For example, the University of Virginia 's in-state published price for the 2024-2025 year – $23,118 – is about 66% more than the in-state sticker price of $13,918 at James Madison University in Virginia.

Higher education experts say students shouldn't rule out private schools, which often offer tuition discounts that may make them competitive with state school prices. This practice among private institutions of offering grants, scholarships and fellowships to offset the sticker price is known as tuition discounting.

According to a report from the National Association of College and University Business Officers, 325 private nonprofit institutions discounted their tuition by an average of 56.1% for first-time, first-year, full-time undergraduate students and by 51.9% for all undergrads in 2023-2024 – an estimated record high for both.

Which Colleges Are the Most Expensive?

Per U.S. News data, the colleges with the highest published prices are the University of Southern California and Brown University in Rhode Island. These National Universities charge $71,647 and $71,312, respectively, for their 2024-2025 tuition and fees. But many students pay less than the published amount to attend .

Some schools with expensive published prices offer substantial financial aid packages. Princeton University in New Jersey, Harvard University in Massachusetts and Stanford University in California , to name a few, meet undergraduate students' full demonstrated need with no loans added to any financial aid package.

While these schools charge tuition and fees ranging from $61,676 at Harvard to $65,910 at Stanford for the 2024-2025 academic year, they rank highly among U.S. News' Best Value Schools . This ranking takes into account academic quality and the total net cost of attendance – including room and board, transportation, books and other expenses – for an out-of-state student who receives the average level of need-based financial aid.

Princeton, for example, provided need-based grants to about 64% of full-time undergraduates in the 2023-2024 school year. The average cost of attendance that year after receiving grants was $12,176.

That's why students should pay attention to net price and not just sticker price, experts say. While some schools may look more costly based on sticker price, they actually may cost less on average based on net price.

"There are no bad questions," Amundson says. If families "don't understand, there's no shame in asking. That's why my office exists. We want to help families make sure they're making an informed choice."

Which Schools Offer Free Tuition?

A handful of colleges and universities are tuition-free , but these institutions usually require work or service in exchange.

Students at the United States Naval Academy in Maryland and United States Military Academy at West Point in New York are required to serve in those respective branches of the military after graduation. In return, tuition, housing and food are free. Three other service academies have similar arrangements: the United States Air Force Academy in Colorado, the United States Coast Guard Academy in Connecticut and the United States Merchant Marine Academy in New York.

Other institutions that offer tuition-free education stipulate certain requirements, such as in-school employment. Alice Lloyd College in Kentucky and Warren Wilson College in North Carolina require full-time undergraduates to work a set number of hours at on-campus jobs.

Are There States With Tuition-Free College Programs?

Of the 441 existing college "promise" programs, which offer scholarships to eligible students to cover up to 100% of their tuition and fees, 132 are statewide, according to the nonprofit College Promise website . Most of these statewide programs are at the two-year institution level, but New York, for example, offers its Excelsior Scholarship at the two- and four-year degree levels.

Statewide programs typically have certain guidelines for students to qualify, including residency or household income. Other requirements range from holding a high school diploma to a minimum GPA.

Some promise programs are open to adult learners. The Kansas City Scholars Adult Learner Scholarship, for example, provides up to $10,000 per year for up to five years to part-time and full-time students ages 24 and older who fall in the low- to modest-income bracket. Students must live in one of the six eligible counties, among other criteria.

More than 300 promise programs exist at the local level, according to College Promise.

Tuition-free does not necessarily mean completely free, however, given the full cost of attending college. Families must also pay attention to related educational costs like housing and food, books, supplies and transportation, experts say.

It's important to have conversations about college affordability early and often as a family so that "everybody's on the same page and understands what they are looking for," Amundson says.

Cost is a key part of the college decision-making process, but it shouldn't be the only driving factor, experts say. Some other factors to consider include academic programs, class sizes and campus resources, and opportunities for research, internships and co-ops , and study abroad .

"I think that a college education is the best investment a family can make in a child," Conrad says. "And while the cost may limit where a student can attend, I would like to believe that if the student has the aspiration to get a postsecondary degree or certificate, there is a way to do that. The lack of funding, where they're coming from, their financial situation, should not prevent them. ... It may not be at the institution that is their dream school, but there is a way."

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.

Planning Last-Minute Money for College

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