No, The Era of Soaring College Prices is Not Over

Blogs, Letters & Testimonials

November 12, 2015

By Jack Esslinger

Positive tuition data from last week’s release of College Board’s annual report Trends in College Pricing prompted a flurry of good-news media headlines: “The era of soaring college prices might be at an end” said the The Washington Post and “Recession-Era Woes Subside” said Inside Higher Ed.  But a closer examination of College Board’s data suggests that maybe it’s a little early to hoist the victory flag in the battle against rising college prices.

In reviewing the data for net prices charged to in-state students at public four-year colleges, we found that in the time period spanning from the 2005-2006 to the 2012-2013 school years – a period that encompasses approximately the lead-up to, heart of, and recovery from what has become known as the Great Recession – the prices charged for tuition, fees, room, and board after all grant aid and tax benefits spiked on average from $10,970 to $13,200 – for an increase of more than 20 percent. In the same time frame, private nonprofit four-year saw average net prices decrease ever-so-slightly from $24,190 to $24,090 — for a decrease of less than half a percent.


1.  Public four-year colleges did an awful job at controlling college prices during the time students and their families needed it most; and

2.  Private nonprofit four-year schools did a much better, and comparatively excellent, job at flat-lining tuition increases when students and their families needed it most.

Ok, so . . .

What’s bad about the public college trend is that it’s pro-cyclical: While the onset of the recession forced many to enroll in colleges and universities due to a lack of alternative choices brought on by spiking unemployment rates and the need to upgrade skills, public colleges made the economic struggles for families worse by precipitously increasing prices – primarily due to state cuts in higher education funding. In hindsight, this concurrence of events ended very badly for many students in the form of soaring accumulated debt and student loan default rates. Public, if not public college, priorities were misplaced during the time of greatest need.

Yet it would be shortsighted to conclude that the private colleges did well by their students and families during the Great Recession.

A closer examination of the data forces us to ask a fundamental question: Were the steps private institutions took to stifle net price increases during hard economic times a harbinger of things to come in terms of positive steps to help address longer-term issues surrounding tuition increases? Or might they be opportunistically, shrewd maneuvers by struggling schools? Trends in College Pricing‘s data seems to hint towards the latter.

In looking at the report’s data from the 2012-2013 (the last year in the last grouping of data) to today (the 2015-2016 school year), we see a huge jump in net prices at private nonprofit four-year schools: Net prices jumped from $24,090 to $26,400, an increase of nearly 10 percent in about half the time frame of the 2005-2007 to 2012-2013 data period. Public four-year colleges saw their net prices move from $13,200 to $14,120, an increase of almost exactly 7 percent, over the same time period. That’s the part on which the media coverage has focused. But the increases were even worse when considering just net tuition and fees: net tuition and fees increased by 13 percent and 9 percent for private non-profit and public universities, respectively.

In short, data from the past five years indicates that we’ve seen a significant spike in private college prices after seeing them flat-line for nearly a decade, while net prices at public colleges have begun to stabilize after a period of sharp increases for nearly a decade.

So, fact of the matter is “No,” the era of soaring college prices isn’t coming to an end, and “No,” recession-era woes may not be subsiding for all. Public and private four-year colleges are still exploiting students and families in one way or another – doubling down on them when things are bad or doubling down on them later when things get better.

Perhaps it’s time for a different approach to college affordability – one that places an affordability commitment to students and families front and center instead of leaving them to pick up whatever tab is left over: Here’s our plan for a “cap on student loan debt.” It changes the incentive structure underlying college pricing.

Jack Esslinger is a research and policy intern with Education Reform Now.