College is more expensive than ever, but 'almost no one' is paying sticker price
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- Though the costs of college have been on the rise, the financial aid discounts colleges give students are rising at the same pace, especially at private nonprofit colleges and universities.
- As Paul Tough reports for New York Times Magazine, 89% of students don't pay full price, and giving students a break has caused some colleges to operate at a loss.
- The average freshman student in the class of 2018 at one of these private nonprofit universities will get a discount of 50%, he reports.
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For many high school seniors, the process of choosing a college comes down to the price. But with the rise of financial aid, the sticker price of college means less than ever."At private, nonprofit four-year colleges - a category that includes most of the nation's highly selective institutions - 89 percent of students receive some form of financial aid, meaning that almost no one is paying full price," reports Paul Tough for New York Times Magazine.
For the 2016-2017 academic year, Yale University students saw price tags of $68,950 for tuition, room and board, and other costs, but paid an average of $18,319, as Business Insider's Andy Kiersz reports. At Dartmouth, the average student paid $21,177 of the $69,474 tuition. The average Columbia University student paid $22,973 of $71,785, and the average Amherst student paid just $19,055 of the $68,986 tuition.In August, Tara Siegel Bernard wrote for The New York Times that some schools, mostly private liberal arts colleges, are slashing their advertised rates in a bid to appeal to students who don't think they could pay full price. It sounds like a good idea, but in actuality, it doesn't have the obvious effect of charging families less for college. Siegel Bernard reports that financial aid discounts, like the ones Tough writes about, haven't kept pace with the reduced tuition. Since most students don't pay full price anyway, the lower advertised costs just bring the sticker price closer to what most students have been paying all along.
With very few students actually paying full price, drops in tuition revenue have caused colleges to operate at a loss, and even consider whether a student can pay full price as part of their admission qualifiers, a pattern Tough explores in detail in "What college admissions offices really want," a deep dive into the admission practices at elite colleges published in New York Times Magazine. This struggle to make up revenue is detrimental to a school's socioeconomic diversity, and it also means there's a greater divide between those who can and can't pay, giving yet another advantage to ultra-wealthy students.College is more expensive than ever - that much is clear. But how much students actually pay is less obvious.More personal finance coverage
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