Higher Education:

Tuition Continues to Rise, but Patterns Vary by Institution Type, Enrollment, and Educational Expenditures

GAO-08-245: Published: Nov 28, 2007. Publicly Released: Dec 21, 2007.

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Higher education has increasingly become critical to our nation's cultural, social, and economic well-being, with 90 percent of the fastest-growing jobs in the knowledge economy requiring some postsecondary education. While a college graduate can expect to earn, on average, approximately $1 million more over the course of his or her working life than those with a high school diploma, most students and their families can expect to pay more on average for college than they did just a year ago. Moreover, many are concerned that the increases in the cost of college may be discouraging large numbers of individuals, particularly minority and low-income individuals, from pursuing higher education. The topic of college affordability continues to be an issue of great concern. Various policymakers, national associations, and philanthropic foundations have documented the growth in college tuition and its potentially adverse effects on access to higher education and rates of degree completion. Recent years have witnessed the introduction of many federal-, state-, and institution-level initiatives aimed at curbing tuition increases, yet tuition continues to rise. Congress asked GAO to provide information on trends in higher education enrollments, tuition and fees, and institutional expenditures on education- related services that students receive by addressing the following questions: (1) What have been the patterns in college enrollment over the past decade and do these patterns differ by race? (2) What have been the patterns in the types of schools students attend and do these patterns differ by race? (3) How much have tuition and fees increased over the past decade across different types of higher education institutions? (4) To what extent have increases in tuition and fees been associated with increases in spending by institutions on education?

More students are enrolling in college than ever before, and an increasingly larger percentage of all students are minorities. Between the 1995-1996 and 2006-2007 school years, overall enrollment in U.S. higher education institutions increased by about 19 percent, or more than an estimated 2.2 million students. At the same time, minority enrollments have increased at a much faster rate than White enrollments. Between school years 2000-2001 and 2006-2007, enrollment of Hispanic students grew the fastest, increasing by approximately 25 percent. While the types of schools in which students enroll have largely remained stable, the distribution of enrollment has shifted for some minority groups. Over the last 12 years, the distribution of students across different types of institutions shifted for some minority groups toward 2-year schools. By the 2006-2007 school year, for some minority groups, the majority of students were enrolled in 2-year schools. Nearly 60 percent of all Hispanic students were enrolled in 2-year schools, as were 50 percent of Asian/Pacific Islander, Alaskan Native, and Black students. In contrast, 43 percent of White/non-Hispanic students attended 2-year schools. Although average tuition increased for all institution types, the smallest tuition increases occurred at the types of institutions that enroll the largest proportion of college students. Between the 1995-1996 and 2006-2007 school years, tuition at private institutions increased the most in dollars, while tuition at public institutions increased the most in percentage points. When enrollment and tuition trends are jointly considered, overall, the majority of students today attend institutions that have the lowest average tuition. Between the 2000-2001 and 2005-2006 school years, increases in average tuition were matched or exceeded by increases in average institutional spending on education at private institutions, but not at public institutions. institutions. Though average tuition at private schools increased the most in dollars, average spending on education by private schools grew faster, in percentage points, than average spending at comparable public schools. Indeed, when comparing trends in tuition with trends in education-related expenditures, at private institutions, tuition increases have been matched by proportionally equal or greater spending on educationrelated services.

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