College Affordability 

A study released in December 2000 compared the affordability of four-year public colleges and universities with their rates of graduating students. It revealed significant differences from state to state. 

Illinois, Iowa and Washington ranked the best in affordability and productivity. Colleges were identified as more affordable given family income in the state, and students were more likely to graduate. In states that ranked lowest - Indiana, Maine and West Virginia colleges were identified as less affordable for the states' families, and students were less likely to graduate. 

The first-of-its-kind study, "College Affordability: Overlooked Long-term Trends and Recent 50-State Patterns," was directed by Jerry S. Davis, vice president for research at the USA Group Foundation. It focused on affordability and graduation productivity at four-year public colleges and universities and covers three decades of data. 

According to Davis, current federal financial aid policies did not take into account the significant differences in affordability among the 50 states. This inequality represents one of the most important findings in the report. 

The complete state-by-state ranking is as follows: 

State-by-state Affordability/Graduation Productivity Rankings 

Highest Productivity and Affordability

Highest Affordability but Lowest Productivity

Highest Productivity but Lowest Affordability 

Lowest Productivity and Affordability

Other Implications:

• College as an investment: Although public and private college prices have increased, recent graduates can recover their educational expenses faster than in earlier years. During the past decade, the value of a college degree and its ability to increase graduates' earnings outpaced the growth in college prices.

• Penalty for not graduating: Students who attend four-year colleges but do not graduate may be worse off financially than if they didn't attend college at all. Greater numbers of undergraduates are leaving college without degrees, and more have larger student loan debt to show for their efforts.

• Widening income gaps: Although the costs of public higher educational institutions have not increased beyond most families' ability to pay, lower-income families are actually less able to pay than ever.

• Financial aid implications: The research findings urge policy-makers to consider a sometimes-controversial financial-aid strategy - "front-loading" grants in the first two years of four-year college programs to encourage attendance and retention, while reducing students' and families' financial risks. Loans would be emphasized for college juniors and seniors.

For more information on the study contact Sara Murray-Plumer at 317-951-5493 or splumer@usagroup.com. The USA Group Foundation is an Indianapolis-based private foundation dedicated to expanding access to education through research, innovation, and communication.

TUITION AT TOP 50 COLLEGES NEARLY QUINTUPLED SINCE 1980, TUITION GREW AT THREE TIMES THE RATE OF INFLATION 

Tuition at the 50 top academic colleges as ranked by U.S. News and World Report increased by an average rate of 367% from1980 to 2000. The consumer price index for all goods and services increased by 108% over the same period. Prices at all colleges mirrored the increase of the top 50 academic institutions. A separate report by the Education Testing Service predicted a 20% increase in college enrollment over the next 15 years.

The Cost of College has Increased Faster than any other Consumer Item

• Tuition at the top 50 academic colleges rose from $3,904 in 1980 to $17,772 in 2000. If tuition at these institutions had increased by the rate of inflation, the average tuition price this year would be $8,116 – less than half the actual price.
  

• 547,460 undergraduate students currently attend these top 50 academic institutions.
  

• The steepest percentage increase was 691% for in-state students at University of Texas - Austin ($452 to $3,575), followed by 523% at Wake Forest ($3,600 to $22,410), 444% at Rice University ($2,900 to $15,762), 441% at Duke University ($4,740 to $25,630), and 433% at Emory University ($4,605 to $24,532).

• The slowest increase was 276% for in-state students at University of Wisconsin - Madison ($1,006 to $3,780) which was still more than twice the rate of inflation. The next slowest increase was 277% at California Institute of Technology ($5,289 to $19,959), 279% for in-state students at Georgia Institute of Technology ($874 to $3,308), 287% at Harvard University ($6,490 to $25,128), and 296% for in-state students at the College of William and Mary ($1,184 to $4,687).

• Beyond the top 50, between 1980 and 1998, the cost of college tuition for all two and four year institutions increased by 313% -- faster than any other major consumer item including health care which increased by 223%.

• College tuition inflation has outpaced the consumer price index for 20 consecutive years.

• The Education Testing Service estimates that the number of college student enrolles will increase from 13.4 million to 16.0 million students by 2015. 

Tuition costs include student fees but not room and board.

 
Sources: National Association of Independent Colleges and Universities, Bureau of Labor Statistics, Statistical Abstract of the United States, U.S. News and World Report, Baron's Guide to Colleges