Lana Oconnell
The cost of college education has been a source of concern for many students and their families. While the sticker price of tuition at some colleges can be as high as $90,000 per year, the reality is that few students actually pay the full price. In fact, the share of students paying the full advertised cost has been declining over the years, with more students receiving financial aid, scholarships, or tuition discounts. The net price of college, which is the amount students and their families actually pay, is often much lower than the sticker price, and it has been falling in recent years. However, the high tuition price tags can still be a deterrent for prospective students, especially those from low-income backgrounds, who may be unsure about taking on student loans to finance their education.
| Characteristics | Values |
|---|---|
| Share of students paying full tuition | Has declined over the last few decades |
| Average total cost of attendance for first-time, full-time undergraduate students living on campus at 4-year degree-granting institutions | $58,600 at private non-profit institutions, $33,600 at private for-profit institutions, and $27,100 at public institutions |
| Average tuition and fees for first-time, full-time students at 4-year institutions | $9,800 for public institutions, $18,200 for private for-profit institutions, and $40,700 for private non-profit institutions |
| Percentage of college students who pay the full cost of attendance | 26% for those enrolled in state at public colleges, 16% for those enrolled at private, non-profit colleges |
| Percentage of students at public universities paying full price | 40% |
| Percentage of students at private universities paying full price | 25% |
| Average net price of college | About $33,000 per year |
| Average net price of attendance at the University of California, Berkeley | About $17,400 |
| Average cost for students in the lowest income bracket at the University of California, Berkeley | $9,200 |
| Average cost of attendance at a public university for a student with a family income above $200,000 | No need-based aid or merit scholarships |
| Average cost of attendance at a private university for a student with a family income above $200,000 | Little to no need-based aid or merit scholarships |
| Percentage of college students fully paying for their own education | 67% |
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What You'll Learn
Few students pay the full price
The cost of college is a major concern for many students and their families. The "sticker price" or published cost of tuition can often be misleading, as few students actually pay the full price. This is because colleges offer financial aid, scholarships, and tuition discounts to many students.
The net price of college, which is the amount students and their families actually pay, is often much lower than the sticker price. This is due to the financial aid and scholarships that colleges and governments provide to recognise merit or need. In fact, according to a report by the Brookings Institution, family income is a better indicator of what a student can expect to pay for tuition than the sticker price. The report found that between 1995 and 2019, the share of college students paying the full cost of attendance fell significantly, both for those enrolled in public colleges and private colleges.
At public universities, around two-fifths of undergraduates pay full price, while at private universities, around a quarter of students pay full price. These full-pay students are typically wealthy. However, even for those who do not pay the full price, the cost of college can still be a burden. The average net price of college is about $33,000 per year, which means a student could owe $132,000 over four years.
The high cost of college has led to a growing concern about student loan debt. While some schools are trying to address this issue by meeting the financial needs of students without loans, the affordability of college remains a barrier for many. Students are often unsure about how much they will have to pay and may be scared away from attending college due to the high sticker prices.
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Colleges give financial aid
The cost of college can be a daunting prospect for many students, with some annual fees reaching six figures. However, it's important to remember that colleges give financial aid, and the published sticker price is not usually what students end up paying. In fact, according to a report by the Brookings Institution, family income is a better indicator of what a student will pay than the sticker price.
Financial aid can come in various forms, including grants, scholarships, work-study programs, and loans. Grants are the most desirable form of financial aid as they don't need to be repaid and reduce the overall cost of education. Scholarships are also a sought-after form of financial aid as they are awarded based on merit and do not need to be repaid. They can be provided by the college itself, private organisations, or community groups. Work-study programs allow students to earn money while attending college by working part-time, often on campus, and can provide valuable work experience. However, it's worth noting that work-study earnings are not guaranteed and usually have a cap. Loans are also an option, but it's important to understand the amount of debt and interest rates involved before accepting them as part of a financial aid package.
Some colleges offer complete financial aid packages, ensuring that students' education costs are fully covered. These colleges often have a ""no-loan" policy, replacing loans with grants and scholarships. To determine eligibility for financial aid, colleges use information provided on the FAFSA (Free Application for Federal Student Aid) or CSS Profile to assess a student's ""demonstrated financial need". This refers to the gap between what a family can afford and the actual cost of attendance.
According to financial aid expert Mark Kantrowitz, roughly two-fifths of undergraduates at public universities pay full price, while around a quarter of students at private universities do so. However, it's worth noting that these numbers may vary, and the overall trend suggests that the share of students paying full price has been declining over the years.
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Sticker prices are unreliable indicators
Sticker prices, or the full cost of attendance, are becoming increasingly unreliable indicators of what a family will pay for college. This is true for low-, middle-, and higher-income families, even those who don't qualify for need-based aid.
The share of students paying the full advertised cost has declined over the last few decades. According to a report by the Brookings Institution, the share of college students who paid the full cost of attendance fell from 53% to 26% for those enrolled in state at public colleges, and from 29% to 16% for those enrolled at private, nonprofit colleges between 1995 and 2019.
Colleges give financial aid to income-eligible students and merit aid in the form of scholarships or tuition discounts to more affluent families. On average, private nonprofit colleges cut tuition by more than half for first-time undergraduates. For example, the University of California, Berkeley, has an annual average cost of attendance of over $41,000, but after grants and scholarships, the average net price is about $17,400. Students in the lowest income bracket, with a family income of $30,000 or less, pay an average net price of $9,200.
The net price of college is the amount students and their families actually pay, and it is often significantly lower than the sticker price. The published sticker price of college is declining, and dozens of colleges now pledge to meet the full financial needs of incoming students.
Despite this, the high cost of college remains a concern for many students and their families. Affordability is a major barrier, and students don't want to take on thousands of dollars in student loans. Many students are unsure about college due to the huge tuition price tags, and the sticker price can scare students away from attending college.
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The net price of college is falling
The net price of college is the amount students and their families pay after subtracting scholarships, discounts, and grants. The net price of college is falling, even though the published sticker price is rising. This is due to the financial aid that colleges and governments provide to students.
According to a report by the Brookings Institution, the net price of college has decreased for most students over the past five years, after adjusting for inflation. The report found that between 2019-20 and 2024-25, inflation-adjusted net prices declined across different types of institutions. Public flagship universities saw the largest reductions, with decreases of 7.1-17.3%, while other public institutions experienced decreases of 8.5-13.2%. Private colleges with large endowments had substantial declines, ranging from 7.0-43.4%, and tuition-dependent private colleges saw net prices drop by 16.8-23.3%.
Lower-income students have benefited the most from the falling net prices. Families earning $40,000 annually experienced the largest reductions, with net prices dropping by 13.2-40.9% depending on the institution. At private institutions with large endowments, students from families earning $40,000 pay approximately $4,400 annually, while those from families earning $240,000 pay $82,800. However, even with these reductions, the cost of college remains unaffordable for many low-income students.
The share of students paying the full advertised cost of college has declined over the years. At public universities, around two-fifths of undergraduates pay the full price, while at private universities, around a quarter of students pay the full price. Most full-pay students across both public and private universities are wealthy. The sticker price often scares many students away from enrolling in college, as it gives the impression of unaffordability.
The complexity of college pricing creates uncertainty for families, policymakers, and the media. Focusing on the actual prices paid, rather than the headline-grabbing sticker prices, can help reshape the conversation around college affordability and ensure that misconceptions do not deter qualified students from pursuing higher education.
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Affordability is a major barrier
The high cost of college is the biggest barrier for prospective students, with many high schoolers expressing hesitation about taking on student loans. The published sticker price of colleges, which can be as high as $90,000 per year, is an unreliable indicator of what a family will pay. However, the net price of college, or the amount students and their families actually pay, is still significant and can be as high as $33,000 per year, resulting in a total debt of $132,000 over four years.
The net price of college is the full cost of attendance minus grants and scholarships. While colleges give financial aid to income-eligible students and merit aid to more affluent families, the net price still exceeds the resources available to students from the lowest income backgrounds. This is especially true for American Indian, Alaska Native, Asian, Black, Latinx, Hispanic, and Native Hawaiian or Pacific Islander students, who face larger unmet needs compared to White students.
Financial aid policies such as increasing the Pell Grant or funding first-dollar free college programs are critical to ensuring that students from low-income backgrounds can access and afford college. However, Pell Grants have not kept up with rising costs and now cover the lowest share of college costs in the program's history. This has resulted in a gap or "unmet need" where students face a disparity between college costs and available resources, contributing to high levels of student loan debt.
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Frequently asked questions
According to research by financial aid expert Mark Kantrowitz, around a quarter of students at private universities pay full price.
According to the same source, roughly two-fifths of undergraduates at public universities pay full price.
In 2022-23, the average total cost of attendance for first-time, full-time undergraduate students at 4-year institutions was $27,100 for public institutions, $33,600 for private for-profit institutions, and $58,600 for private nonprofit institutions.
The share of students paying the full cost of attendance has declined over the last few decades. For instance, between the 1995 and 2019 academic years, the percentage of students paying full tuition fell from 53% to 26% for those enrolled in state at public colleges, and from 29% to 16% for those enrolled at private, nonprofit colleges.
