Private College Tuition Increases Slow To Lowest Rate In At Least Four Decades

WASHINGTON, D.C. — Published tuition and fees at the nation’s private, nonprofit colleges and universities rose 3.9 percent for the 2012-13 academic year, the lowest rate in at least four decades, according to a survey by the National Association of Independent Colleges and Universities (NAICU). At the same time, institutional student aid budgets at private colleges increased an average of 6.2 percent for 2012-13.

Of NAICU’s 960 member colleges and universities, 445 responded to this year’s survey of published tuition and institutional student aid increases. NAICU member institutions enroll 90 percent of the students who attend private, nonprofit colleges and universities in the United States.

This is the fourth consecutive year that the percentage increase in published tuition has stayed below pre-recession rates, and the first time in at least four decades it has been below 4 percent.  From 2009-10 to 2011-12, average private college tuition increases ran in the mid-4 percent range, down from an average annual increase of 5.7 percent during the previous 10 years.  This year’s 3.9 percent increase is the lowest NAICU has on record. (NAICU’s data goes back to 1972-73.)

This year’s average 6.2 percent increase in institutional student aid follows increases of 7 percent, 6.8 percent, and 9 percent in 2011-12, 2010-11, and 2009-10, respectively. The NAICU survey did not collect student aid figures prior to 2009-10.

“Students and families are increasingly price- and value-conscious,” said NAICU President David L. Warren. “Private college leaders are listening, and working hard to keep students’ out-of-pockets costs as low as possible and provide the best value for the tuition dollar.”

“Since the economic downturn, private colleges and universities across the nation have redoubled efforts to cut their operating costs, improve their efficiency, and enhance their affordability,” Warren said. “More will continue to be done by private institutions to stay affordable and within reach of families from all backgrounds.”

According to the College Board, average inflation-adjusted net tuition and fees (published tuition and fees minus grant aid from all sources and federal higher education tax benefits) at private colleges dropped 4.1 percent from 2006-07 to 2011-12.

“Students and families should not rule out a private college just because of its sticker price,” said Warren.

Tuition Cuts, Freezes, and Other Affordability Measures Spread
Since the economic downturn, private colleges have introduced creative affordability measures to keep students' and families' out-of-pocket costs as low as possible. In recent years, an unprecedented number of private institutions have cut tuition, frozen tuition, announced fixed-tuition guarantees (no increases for students while they are enrolled), or introduced three-year degree programs.

Other initiatives are also spreading, including four-year graduation guarantees, substantial student aid increases, published tuition increases that are the lowest in years or decades, and degree partnerships with community colleges.

“The intense focus by private colleges on affordability and institutional cost control is here for the long run,” Warren said. “Broad economic, demographic, and market trends have made it a necessity for every institution of higher education.”

“Each college and university will determine for itself – based on institution-specific financial, market, and mission-related factors – the approach that best addresses growing consumer concern over rising college prices, while best serving the educational needs of its students,” said Warren.

Average Published Tuition, Net Tuition, and Student Debt
NAICU’s survey collects percentage increases in published tuition and institutional student aid budget increases, but not dollar amounts.

According to the College Board, in 2011-12, published tuition and fees at private, nonprofit colleges and universities averaged $28,500. However, average net tuition for full-time students dropped to $12,970, after grant aid from all sources and federal tax benefits.

The average debt of bachelor’s degree recipients at private, nonprofit colleges who borrowed was $28,100 in 2010, according to the College Board. This compares to average student loan debt of $22,000 for graduates of four-year public universities.

Tuition Drivers
Growing demand for student financial assistance, along with cost drivers that typically rise faster than inflation – employee health care, insurance premiums, and information technology – all contribute to rising tuition. For example, health-care insurance premiums for college employees increased 6.7 percent this year, according to the College and University Professional Association for Human Resources.

Significant investments in student support services, including mental health counseling, support for students with disabilities, and programs designed to boost student retention and graduation rates for at-risk populations, have also stretched institutional budgets.

NAICU serves as the unified national voice of independent higher education. With more than 1,000 member institutions and associations, NAICU reflects the diversity of private, nonprofit higher education in the United States. They include traditional liberal arts colleges, major research universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, art institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions.


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