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Trends in College Pricing – 2008


The College Board has published an annual report on college pricing since 1998.  The report looks at tuition and fees, room and board, and other related costs at colleges in the United States.  It also reviews the net price of college after subtracting financial aid grants to students.  Colleges are categorized as public four-year, public two-year, and private non-profit four year.  Data is also collected for public out of state student pricing and for-profit pricing.  (see http://www.collegeboard.com/html/costs/pricing/

The College Board states that all costs of college attendance are important and that often, costs such as room and board and books influence the ability of a student to afford college more so than tuition and fees.  The College Board encourages readers to cite or reproduce the data as long as they are given proper attribution, so I’ll list a few facts that I found interesting in this year’s report.

In 2008-2009, the average published tuition and fees increased:
 Public four year   6.4%
 Private four year  5.9%
 Public two year    4.7%
 For profits           4.5%
The public four year in-state tuition and fees averaged $6,585 plus $7,748 room and board for a total charge average of $14,333.

Page 7 of this year’s report has an interesting chart called “Variation in Tuition and Fees, 2008-09.”  This chart shows the distribution in tuition and fees by category.  For example, 78% of public four year colleges have tuition and fees less than $9,000 annually whereas only 7% of private four year colleges and universities fall into that category (note that APUS‘ full-time undergraduate tuition and fees would be $7,500 per annum).  Another interesting chart examines the variation in tuition and fees and notes that while public four year colleges increased their tuition and fees on average 6.4% versus the 5.9% at private colleges, the dollar increase average at public four year colleges was $380 versus $1,484 at private colleges (due to the substantially higher tuition).

Net price is another area where the data collected is interesting.  In 2008-2009, private college full-time students received an average financial aid award of $10,200.  This amount reflects all sources (institutional and federal) and includes the federal tax benefits.  Thus, the net tuition and fees average is reduced to $14,900 from $25,100.  At public four year colleges the average financial aid is $3,700 which reduces tuition and fees to $2,900 (net) from $6,600.  At two year colleges, full time students received $2,300 in aid reducing the $2,400 in tuition and fees to $100 net.

The net pricing data confirms other theories about college access including “the higher the tuition, the less affordable college attendance is for students in the lower income group.”  Measuring Up 2006 is a report published by The National Center for Public Policy and Higher Education.  In December, Measuring Up 2008 will be published.  That group breaks out the cost of college attendance by quintiles of family income.  The College Board states that “the federal Pell Grant program provides about half of the grants received by full-time students at public two year colleges and a quarter of the grants received by full-time students at public four year colleges, but only about 10% for students at private colleges.”  With the wide disparity in net price cited above (from $14,900 to $2,900 to $100), it’s understandable why students from families with lower incomes would choose more affordable options or no college at all.

Concerns about the cost of college attendance caused Congress to act.  The Higher Education Opportunity Act (HEOA) passed in July of this year has a number of cost-related disclosure and reporting requirements for colleges.  Among them, HEOA introduces the concept of net price (similar to the above except it does not include the federal tax benefits received by a student), requires the Department of Education to publish on its website the top five percent of colleges and universities with (1) the highest tuition and fees for the most recent academic year, (2) the highest net price for the most recent academic year, (3) the largest percentage increase in tuition and fees over the most recent three academic  years, and (4) the largest percentage increase in net price over the most recent three academic years.  These reports will be categorized among nine institutional categories.  Schools in the lists on (3) and (4) will have to submit a written report to the Department of Education explaining the increases and the steps that they’re taking to reduce future costs of attendance.

Affordability can expand access to college.  It will be interesting to see if the current economic downturn will change the pricing trends or if they will accelerate upward due to some of the budgetary crises at the state level and the endowment issues at the private college level.

Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston was appointed to the National Advisory Committee on Institutional Quality and Integrity by the U.S. Secretary of Education in 2019. He also serves as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), as a Trustee of The American College of Financial Services, as a member of the board of Our Community Salutes - USA, and as a member and chair of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.



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