Facts of the Month

College Tuition Hikes

Students, parents and policy makers often lament the seemingly substantial college tuition hikes that appear to have become annual events. While they may expect to see the increases reflected in their college bills, they often don't know what contributes to such unrelenting increases year after year. Unfortunately, there is rarely one simple answer. Data recently published by the Commonfund Institute revealed that the cost of running colleges and universities in the United States, based on the Higher Education Price Index (an inflation index specific to higher education), increased only 3.4% during academic year 2006-2007. This is the smallest increase in the past four years. According to the College Board's Trends in College Pricing 2006, published tuition and fee charges at four-year public colleges increased an average of 6.3 percent in 2006-2007. At four-year private colleges, the increase was approximately 5.9%. The differences in these numbers show the complexity of college financing, since many students do not pay the published tuition and fee charges. What does all this mean?  Tuition and fee rates are likely to continue to climb, but hopefully colleges' attempts to reign in costs will eventually translate to smaller increases for all students.


Commonfund Institute HEPI

Publication Date: July 2007