Affording a college degree: Is the cost curve bending?

We all know the conventional wisdom about college in the United States: tuition keeps increasing, outpacing the rate of inflation; students are accruing more and more debt that they can’t pay back; and little is being done to bend the cost curve, with students and parents footing the bill.

But what if the story is a bit more complicated?

Our latest research finds that growth in the average sticker price of a four-year bachelor’s degree at a not-for-profit college has been only slightly higher than the inflation rate over the past decade. During the same period, growth in the average net cost of attending—the out-of-pocket cost factoring in grant and scholarship aid¹“Net cost of attendance” refers to net price as defined by the Integrated Postsecondary Education Data System (IPEDS) and is the “true cost” of attending an institution for full-time, first-time undergraduate students receiving scholarship or grant aid. Net cost of attendance is calculated by subtracting the average amount of institutional and federal, state, and local government grant and scholarship aid from the total cost of attendance, or “sticker price,” which includes published tuition and required fees (lower of in-district or in-state for public institutions), books and supplies, and the weighted average for room and board and other expenses. For more about net price, see “Average institutional net price FAQs,” National Center for Education Statistics, accessed November 15, 2024.—has been below the inflation rate, while the annual cost of attending a four-year institution as a share of median household income has dropped. Moreover, students and their parents are taking on less debt, and default rates on student loans have fallen.

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