More Out of Pocket $ as Grant Aid Fails to Keep Up with Moderate Increases in Tuition and Fees 10/25/17 NEW YORK —

The College Board’s 2017 Trends in Higher Education reports—Trends in Student Aid and Trends in College Pricing—show continuing moderate annual increases in published tuition and fee prices, ranging from 2.9% to 3.6% across the public and private nonprofit sectors of higher education. In 2017-18, the average published tuition and fee prices are $3,570, $9,970, and $34,740 at public two-year, public four-year, and private nonprofit four-year sectors, respectively.

For the past five years, Trends in College Pricing has reported one-year price increases of about 3% each year in the public four-year sector (before adjusting for inflation)—a steep decline from the one-year price increases of between 6% and 13% during the decade from 2001-02 to 2011-12. Patterns in the public two-year and private nonprofit four-year sectors are similar but less pronounced.

In 2017-18, full-time students in the public and private nonprofit four-year sectors receive an estimated average of $5,830 and $20,210, respectively, in grant aid and tax benefits, covering nearly 60% of tuition and fees in each sector. On average, grant aid and tax benefits cover tuition and fees for full-time students at public two-year colleges. However, net prices in all three sectors continued to rise between 2016-17 and 2017-18, even after adjusting for inflation. While the average net prices in 2017-18 remain lower than they were in 2007-08 at public two-year and private nonprofit four-year institutions, net prices have risen in all three sectors each year since 2011-12, as the growth in grant aid slowed relative to the growth in tuition and fees.

In 2016-17, postsecondary students received a total of $125.4 billion in grant aid to help pay for undergraduate and graduate education—74% more (in inflation-adjusted dollars) than a decade earlier. Even with an 11% increase in full-time equivalent (FTE) enrollment over 10 years, the $8,440 in grant aid per undergraduate was 61% higher and the $9,290 per graduate student was 39% higher than a decade earlier.

The federal share of total grant aid peaked at 44% in 2010-11 and declined to 32% in 2016-17, while the share of institutional grant aid increased from 35% in 2010-11 to 47% in 2016-17. The composition of federal grant aid has also changed. Between 2006-07 and 2016-17, Pell Grants increased from $15.2 billion (in 2016 dollars) to $26.6 billion, but fell from 76% to 66% of federal grants; veterans’ benefits, which rose from $3.2 billion to $12.9 billion, grew from 16% of federal grants in 2006-07 to 32% in 2016-17.

Total annual education borrowing declined in 2016-17 for the sixth consecutive year, falling by 15%, from $125.6 billion (in 2016 dollars) in 2010-11 to $106.5 billion in 2016-17. Borrowing per FTE undergraduate fell from $6,260 in 2010-11 to $5,430 in 2016-17. Borrowing per FTE graduate student declined from $19,420 in 2010-11 to $17,760 in 2014-15, but increased to $18,430 in 2016-17.

Key College Pricing Findings

• Average published tuition and fees for full-time in-state students at public four-year colleges and universities increased by 3.1% before adjusting for inflation, from $9,670 in 2016-17 to $9,970 in 2017-18.
• In 2014-15, at public four-year institutions, federal aid recipients (including those who received only federal loans) with incomes $30,000 and below paid no tuition on average, and had $2,700 of grant aid to put toward an estimated $14,520 in non-tuition expenses, leaving $11,820 for them to cover out of other resources.
• Average published tuition and fees for full-time out-of-state students at public four-year colleges and universities increased by 3.2% before adjusting for inflation, from $24,820 in 2016-17 to $25,620 in 2017-18.
• Average published in-district tuition and fees at public two-year colleges increased by 2.9% before adjusting for inflation, from $3,470 in 2016-17 to $3,570 in 2017-18.
• In 2017-18, full-time students at public two-year colleges receive an average of about $3,900 in grant aid and federal education tax credits and deductions—$330 more than required to cover tuition and fees. On average, after grant aid, they must cover about $8,070 in living expenses.
• In 2017-18, average published in-district tuition and fees for full-time students at public two-year institutions range from $1,430 in California and $1,760 in New Mexico to $6,840 in New Hampshire and $7,980 in Vermont. Average tuition and fees for in-state students at public four-year institutions range from $5,220 in Wyoming and $6,360 in Florida to $16,040 in Vermont and $16,070 in New Hampshire.
• Average published tuition and fees at private nonprofit four-year institutions increased by 3.6% before adjusting for inflation, from $33,520 in 2016-17 to $34,740 in 2017-18.
• The increase in average grant aid and tax benefits for full-time students at private nonprofit institutions was large enough to lower average net tuition and fees by $740 (in 2017 dollars) between 2007-08 and 2017-18, but most of the increase in aid came during the first half of the decade.
• Between 2007-08 and 2017-18, average tuition and fees increased by $870 (in 2017 dollars) at public two-year colleges, $2,690 at public four-year institutions, and $7,220 in the private nonprofit four-year sector. 3 2017 Trends in Higher Education
• Between 2005-06 and 2010-11, total state and local funding rose by 2%, from $75.6 billion (in 2015 dollars) to $77.3 billion. At the same time, enrollment increased by 19%, generating a 14% decline in per-student funding over these five years. Between 2010-11 and 2015-16, total funding fell by 2%. Combined with a 5% decline in enrollment, this generated a 3% increase in per-student funding over these five years.
• Between 2004-05 and 2014-15, per-student revenue at public four-year institutions from tuition and fees and federal, state, and local governments increased by $720 (3%) in 2014 dollars. Net tuition revenue increased by $3,000, while revenue from government sources declined by $2,280.
• Tuition and fees constitute 39% of the total budget for in-state students living on campus at public fouryear colleges and universities and 20% of the budget for public two-year college students who pay for off-campus housing.

Key Student Aid Findings

• In 2016-17, undergraduates received an average of $14,400 per FTE student in financial aid, including $8,440 in grants from all sources, $4,620 in federal loans, $1,280 in education tax credits and deductions, and $60 in Federal Work-Study.
• Grant aid per FTE undergraduate student increased by $1,020 (14%) in 2016 dollars between 2011-12 and 2016-17, after increasing by $2,180 (42%) over the preceding five years.
• Total Pell Grant expenditures increased from $15.2 billion (in 2016 dollars) in 2006-07 to $35.8 billion in 2011-12, but declined to $26.6 billion by 2016-17. The number of Pell Grant recipients declined in 2016-17 for the fifth consecutive year, but the 7.1 million recipients represented a 38% increase from 5.2 million a decade earlier.
• Colleges and universities increased their aid by 32%, from $44.4 billion (in 2016 dollars) in 2011-12 to $58.7 billion in 2016-17. Over these five years, federal grant aid declined by 15%, and grant aid from states and from employers and other private sources rose by less than 10%.
• Annual education borrowing fell (in inflation-adjusted dollars) in 2016-17 for the sixth consecutive year. Federal education loans per FTE undergraduate student followed the same pattern, but the average amount borrowed by graduate students increased for the second year in a row—to $17,710, almost four times as high as the $4,620 in federal loans per undergraduate student.
• Undergraduate students and parents borrowed 2% more (after adjusting for inflation) in 2016-17 than in 2006-07, but 18% less than in 2011-12. Graduate students borrowed 31% more in 2016-17 than in 2006-07, but 3% less than in 2011-12.
• Total federal loans per FTE undergraduate student increased by 36% ($1,470) between 2006-07 and 2011-12, but declined by 17% ($970) between 2011-12 and 2016-17. • In 2015-16, the 60% of bachelor’s degree recipients from public and private nonprofit institutions who borrowed graduated with an average of $28,400 in debt. 4 2017 Trends in Higher Education
• Sixty percent of federal student loan borrowers entering repayment in 2010-11 and 2011-12 after earning a degree or certificate and 34% of noncompleters had paid down at least $1 of loan principal after three years. Repayment rates ranged from 23% for independent students in the for-profit sector to 68% for dependent students in the private nonprofit sector.
• In 2017, 50% of the outstanding federal education loan debt is held by the 12% of borrowers owing $60,000 or more; 57% percent of borrowers with outstanding federal education loan debt owe less than $20,000.
• The share of the savings from education tax credits and deductions going to households with adjusted gross income (AGI) below $25,000 rose from 15% in 2004 to 24% in 2014. The share going to those with AGI over $100,000 rose from 0% to 24%.