Higher Education:

Tuition Increasing Faster Than Household Income and Public Colleges' Costs

HEHS-96-154: Published: Aug 15, 1996. Publicly Released: Aug 15, 1996.

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Pursuant to congressional requests, GAO provided information on: (1) changes in college tuition levels relative to increases in consumer prices and families' ability to pay; (2) the extent that increased expenditures for instruction, administration, research, and other services have contributed to the increase in colleges' overall expenditures; (3) how tuition levels at public colleges and universities vary among the states and the factors that account for the differences; and (4) what actions states and institutions have taken to deal with affordability issues.

GAO found that: (1) between 1980 and 1995, average tuition at 4-year public colleges for in-state, full-time students increased 234 percent, while median household income increased 82 percent and the Consumer Price Index increased 74 percent; (2) the increase in colleges' expenditures and a greater dependency on tuition as a revenue source were the two factors most responsible for the tuition increase; (3) tuition revenues increased from 16 percent to 23 percent during this period, mainly because the revenue share provided by states decreased 14 percent; (4) student grant aid has not kept pace with tuition levels, so students and their families are relying more heavily on loans and personal finances; (5) increases in instruction, administrative, and research costs accounted for more than two-thirds of the 121 percent increase in total college expenditures; (6) expenditures for scholarships and fellowships, student services, and plant operations and maintenance, which also rose faster than inflation, accounted for about one-fourth of the increase; (7) for school year 1995-96, in-state student tuition at 4-year public colleges ranged from $1,524 to $5,521, with a nationwide average of $2,865; (8) states' level of financial support to colleges accounted for most of the variation in tuition levels, but there was a strong correlation between state and local tax rates, median household income, and colleges' expenditures per student and state tuition levels; and (9) states and colleges are taking actions to address college affordability issues, such as limiting tuition increases, providing payment alternatives, and speeding academic progress.

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