NCPA - National Center for Policy Analysis

Tuition Cost Increases are Double the Rise in Other Prices

March 12, 1999

Private universities have begun announcing what they will charge for tuition in the 1999-2000 academic year. The increases range between 3 percent and 5 percent -- more than twice the rate of increase in the general level of prices.

  • Yet the stock market's stunning performance has boosted college endowments about 74 percent, on average, in the past four years.
  • While public universities won't release their fee schedules until summer, previous increases have tended to be slightly lower than private-school increases -- although still above inflation rates.
  • With college enrollments up more than 30 percent between 1976 and 1996, experts say the public is willing to pay the price -- so colleges are confident higher costs will not affect their market.

College officials contend they need the additional funds to provide more financial aid to needy students, increase professors' salaries and upgrade technology. But critics say the schools are in a vicious cycle -- raising tuitions so they can hand out more aid, then raising tuitions again.

The College Board estimates that more than $60 billion in financial aid -- most of it from the federal government -- was available to students last year, a 6 percent increase from the year before. But 60 percent of that aid was in the form of loans, up from 40 percent in 1980. On average, public university students graduate $12,000 in debt -- $14,300 for private college students.

Meanwhile, private grade schools and preschools are boosting tuition as much as 7 percent.

Source: Tristan Mabry, "College Tuition Outpaces Inflation Again," Wall Street Journal, March 12, 1999.


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