Search Results
Briefing
Tracking College Tuition Growth
Previous research analyzed the rapid tuition growth that occurred from the late 1980s to 2010. That research indicates that several key factors drove the rise in college tuition: large expansions in the federal student loan program, a dramatic increase in the college-earnings premium, steady increases in average parental income, and state support of public schools that did not keep pace with tuition. Where that analysis stops, this analysis begins, showing that tuition growth slowed markedly from 2010 to 2022. We highlight several factors contributing to this pivot, interpreting those factors ...
Journal Article
The Rise and Fall of College Tuition Inflation
The cost of college tuition increased rapidly from 1980 to 2004 at a rate of about 7 percent per year, significantly outpacing the overall inflation rate. Since 2005, college tuition inflation has slowed markedly and has averaged closer to 2 percent per year for the last few years. Understanding what drives tuition inflation is important for predicting future tuition as well as personal income mobility. However, untangling the various supply and demand factors influencing college tuition can be challenging. {{p}} Brent Bundick and Emily Pollard document changes in college tuition inflation ...
Discussion Paper
Soaring Tuitions: Are Public Funding Cuts to Blame?
Public colleges and universities play a vital role in training a state’s workforce, yet state support for higher education has been declining for years. As a share of total revenues for America’s public institutions of higher education, state and local appropriations have fallen every year over the past decade, dropping from 70.7 percent in 2000 to 57.1 percent in 2011. At the same time, college enrollment numbers have swelled across the country—public institutions’ rolls grew from 8.6 million full-time students in 2000 to 11.8 million in 2011. Faced with dwindling funding from the ...
Journal Article
The Return on Investing in a College Education
Comparing higher education’s costs and benefits—tuition and greater future earnings, respectively—shows that the returns on investing in college can be high.
Report
Credit supply and the rise in college tuition: evidence from the expansion in federal student aid programs
We study the link between the student credit expansion of the past fifteen years and the contemporaneous rise in college tuition. To disentangle simultaneity issues, we analyze the effects of increases in federal student loan caps using detailed student-level financial data. We find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar, and smaller but positive effects for unsubsidized federal loans. The subsidized loan effect is most pronounced for more expensive degrees, those offered by private institutions, and for two-year or vocational ...
Report
College Tuition and Income Inequality
This paper evaluates the role of rising income inequality in explaining observed growth in college tuition. We develop a competitive model of the college market in which college quality depends on instructional expenditure and the average ability of admitted students. An innovative feature of our model is that it allows for a continuous distribution of college quality. We find that observed increases in US income inequality can explain more than the entire observed rise in average net tuition since 1990 and that rising income inequality has also depressed college attendance.
Working Paper
How Much Does College Cost and How Does It Relate to Student Borrowing? Tuition Growth and Borrowing over the Past 30 Years
The rising cost of college and graduate school is often cited as a cause of rising student loan borrowing. This paper analyzes long-term trends in tuition and student financing using data from the National Postsecondary Student Aid Study. While real top-line “sticker prices” have increased 114 percent since 1993, after accounting for increases in financial aid and tax benefits net tuition prices have not changed. Over the same period, student borrowing tripled. While certain groups, like graduate students and affluent undergraduates, have faced higher prices, aggregate increases in ...