LEILA FADEL, HOST:
The high cost of college has led a lot of families to question just how important it is to get a degree. Even Congress, which held a hearing on student debt this week, is alarmed. For our Cost of Living series, NPR's Elissa Nadworny joins us to talk about price tags on tuition. Good morning, Elissa.
ELISSA NADWORNY, BYLINE: Hi, Leila.
FADEL: Hi. OK. So it's no secret that college tuition has gone up quite a bit. But, Elissa, just how much has it ballooned?
NADWORNY: OK. So over the last 30 years, average tuition for both public and private four-year colleges has essentially doubled after adjusting for inflation. And the thing is, it really does feel like tuition is always rising. I wanted to tell you about a New York Times article that I found from 1970, Leila, bemoaning the tuition at Harvard, saying that it's soaring by jumping $200.
FADEL: Which would be a dream today.
(LAUGHTER)
NADWORNY: That journalist - yeah, exactly - would be pretty shocked that today Harvard tuition, plus room and board, is about $83,000.
FADEL: OK. But that sticker price that's advertised - that's not actually what many families pay, right?
NADWORNY: That's right. So most families get financial aid or merit aid, and what they actually pay is called net price. But net price has still gone up quite a bit over time because colleges have raised tuition faster than financial aid can keep up.
FADEL: But why? Why have colleges raised their tuition so much and so fast?
NADWORNY: Well, there's a lot of factors. For public schools, the decrease in state funding. There's administrative bloat. Some research point to student loans. Like, regardless of the tuition, students can just borrow from the federal government. And there's also rising costs and competition. There's always fancy buildings to build, you know, more staff to hire.
FADEL: And often, having a high price tag dictates prestige.
NADWORNY: Exactly, and there are plenty of wealthy families who are willing to pay those really high prices. I mean, at Harvard, 40% of their freshmen pay the full price. They don't get any financial help.
FADEL: Some families pay one thing. Others pay another price, and no college seems to cost the same. That seems...
NADWORNY: Yeah.
FADEL: ...Like, yeah, a pretty murky market.
NADWORNY: Exactly, and it's another reason why tuition is so high. It's not transparent. Here's Preston Cooper, who studies the economics of higher ed. He's at the American Enterprise Institute, a right-leaning think tank.
PRESTON COOPER: That means that colleges don't really compete on price with one another. Because students can't see the price up-front, they can't comparison shop. They can't play different colleges' pricing offers against one another the way they could in a normal market.
FADEL: OK. Are there any solutions?
NADWORNY: OK. So let me tell you about one - a tuition freeze. So Purdue University, a public land-grant school in Indiana, did this in 2013. They locked undergrad tuition. They have been doing it for 14 years. I talked to Chris Ruhl, the CFO at Purdue, about this.
CHRIS RUHL: We've increased tuition revenue without raising price by serving more students. We've grown other revenue streams, and then we've been laser-focused on costs.
NADWORNY: So historically, colleges set their budgets first and then divvied up the bill, setting tuition to meet that. Purdue flips that. They start with tuition, and they adjust revenue goals and spending to meet what they can afford.
FADEL: So in addition to Purdue, there are other affordable options, right?
NADWORNY: Yeah, of course. So places like Florida, the average tuition for in-state students is below $5,000 a year, and that's remained constant for about 10 years. There is a huge range in tuition. I mean, a lot of community colleges are charging even less for low-income students. A federal Pell Grant would end up making that tuition free for a lot of low-income students.
FADEL: That's NPR's Elissa Nadworny. Thank you, Elissa.
NADWORNY: You bet.
(SOUNDBITE OF BONOBO'S "CHANGE DOWN") Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
