NCPA - National Center for Policy Analysis


June 30, 2004

What students pay on average for tuition at public universities has fallen by nearly one-third since 1998, thanks to new federal tax breaks and a massive increase in state and federal grants to most students and their families, says USA TODAY.

Federal tax breaks and big jumps in state and federal grants to students are responsible for the drop in the price of a college education:

  • In 2003, students paid an average of just 27 percent of the official tuition price at four-year public universities when grants and tax breaks are counted.
  • Average tuition fell 32 percent from $1,636 in the 1997-98 academic year to $1,115 in 2002-03.
  • Some 6.5 million families got tuition tax credits that reduced taxes an average of $1,350 per return.

In recent years, affluent students have benefited from more merit-based scholarships, and poor students have benefited from increased federal Pell grants. But middle-class families earning $40,000 to $100,000 a year have benefited the most, as they most often qualify for financial aid based on need and merit, says USA Today.

Source: Dennis Cauchon, "Tuition burden falls by a third," USA TODAY, June 28, 2004.

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