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Solutions for our Future is an effort to raise awareness that higher education is one of America's greatest resources

Rising Prices: College Tuition Increases

In the new knowledge-based economy, affordable postsecondary education is more critical than ever.

Over the past two decades, changes in state funding, tuition and financial aid have made postsecondary affordability a growing problem.

And while state and federal support for financial aid has increased over the past decade, it has not kept pace with tuition increases.

  • College tuitions have increased on average by 76 percent at public four-year institutions over the last decade. Private four-year institutions have seen an average increase of 62 percent.

  • While the average cost of college tuition has risen more than 65% over the past decade, median family income has risen by only 5 percent.

  • The purchasing power of a Pell Grant, the largest need-based financial aid program in the country, continues to decrease as the maximum available grant amount has remained constant for the last five years.

  • The single biggest cause for tuition increases in public institutions has been cuts in state appropriations. Among private colleges, the causes of rising tuition are more dispersed, but include the rising cost of student financial aid, maintenance, and information technology.

  • In addition, higher education is highly labor intensive and it is commonplace for colleges and universities to spend 60 percent or more of their budgets on human resources. In many cases, colleges and universities compete with the private sector to hire outstanding individuals such as engineers, computer scientists, biologists, doctors and lawyers for faculty positions. Despite these pressures, colleges and universities are taking a wide range of steps to reduce costs and ease the upward pressure on tuition, including reducing course offerings, eliminating departments, and adopting pay and hiring freezes.

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American Council on Education
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Phone: (202) 939-9456
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