When Good News is Bad News

An annual fall ritual in higher education is the release of two reports by the College Board: one about trends in college pricing, the other about trends in student aid.  If you are interested in the question “How much does college cost for students and families?” these reports will bombard you with numbers, definitions, estimates, and endless qualifiers. The most important message gleaned from the analysis this year, the College Board contends, is that college costs are increasing, but slower than in previous years.

But trying to get to the bottom line on college affordability isn’t easy. Tuition and fees for public, four-year and public, two-year colleges increased 4.8 percent and 5.8 percent, respectively, in 2011-12, compared to 2010-11 (a slower growth rate than previous years, thus the “encouraging” message).

These increases occurred despite the fact that inflation increased only 2.2 percent during the same time period. This is not unusual; college costs increase greater than inflation more often than not and the reason and rationale for this could fill yet another report.

At first glance, this certainly sounds like good news. But growing tuition and fee rates is not good news when family income is falling, unemployment is high, and when—contrary to what the College Board reports—enrollment is declining.

Found in these reports, long after the good news message is a quote: “Over the entire income distribution in the United States, real average family incomes in 2011 were lower than they were a decade earlier. The largest declines were for the families in the lowest 20% of the population.”

Also, the “good news” above does not include increases for room and board, costs that students must pay to attend college. (While these numbers can be found in the report they are not included in the primary message.)

So, including room and board, the average price to attend college in 2011-12 was $17,860 and $10,550 for those enrolled in public, four-year and public, two-year institutions, respectively. These institutions enroll the great majority of Americans pursuing postsecondary education.

No one actually pays these amounts because the numbers are averages. They do not include federal, state, or institutional financial aid (addressed primarily in the second report); and they don’t account for the variation in tuition and aid policies across the 50 states, resulting in wildly varying prices.

On the financial aid side, some of the programs that are considered financial aid are questionable, such as tax credits—and some would argue, student loans. Potentially, the former can, in fact, reduce the expenses that families pay for college, but so can state appropriations for higher education, which shouldn’t be counted as aid either. This is because there is simply no guarantee that it reduces the burden of paying college costs for students and families.

So back to our original question: What does college cost for students and families? Apparently the best answer the country can give at this point is: “It depends.”  This is not a good answer for a country staking its future on the development of human capital. It depends too much on where one lives, what one’s income is, what type of institution one attends, and if one is able to navigate the financial aid maze to apply for and qualify for aid. What we do know is that the cost of attending college for students and families is increasing. But take heart; the College Board has assured us that the rate of increase is slowing!

Photo Credit: College Board