A problematic equation: College costs rise. Student aid doesn't.

College prices continue to increase at a moderate pace, and student aid remains stable according to the College Board’s 2015 Trends in Higher Education reports — Trends in Student Aid and Trends in College Pricing — released today. Tuition and fees continued to rise this year at a rate similar to that of the last two years, while lower inflation made these increases larger in real terms. Continuing the postrecession trend, borrowing per student declined for the fourth consecutive year and was 10% lower in 2014-15 than in 2010-11.

When accounting for grant aid, the prices typical students paid for college fell in all sectors between 2005-06 and 2010-11, but they have risen since then. On average, full-time students at public two-year colleges pay $1,140 less in net tuition and fees — and $430 less in net tuition and fees and room and board — in 2015-16 than they did a decade ago.

Credit: Maureen Downey

Credit: Maureen Downey

At private nonprofit four-year institutions, the estimated net tuition and fee price is just 1% higher in 2015-16 than a decade earlier. However, because of recent increases, public four-year college students pay net prices averaging 38% more than 10 years ago.

“These data provoke a necessary conversation about college financing,” said Jack Buckley, senior vice president of research at the College Board. “As the price of postsecondary education continues to rise, we need innovative thinking around federal, state, and institutional aid that will allow all students and families to feel confident that they will be able to pay for college. The College Board will continue to present the most transparent and relevant data so that policymakers and researchers can understand how to evaluate and address this nationwide challenge.”

The average published tuition and fee price is 40% higher in 2015-16 at public four-year institutions than it was in 2005-06, 29% higher in the public two-year sector, and 26% higher in the private nonprofit four-year sector. However, the report finds that these price increases are smaller than those in previous decades.

“The postrecession trends we documented last year have continued, with price increases that are moderate by historical standards and with continuing declines in student borrowing,” said Sandy Baum, senior fellow at the Urban Institute, research professor of education policy at the George Washington University Graduate School of Education and Human Development, and coauthor of the 2015 Trends in Higher Education reports.

“However, the reports also document dramatic increases in published tuition and fees over time, as well as increases in net tuition and fees in the past few years, resulting from the combination of published prices that continue to rise and student aid levels that have not kept up. Assuring that our nation continues to provide access to affordable education for all who can benefit is a prerequisite for a healthy economy and society.”

The Trends in Student Aid 2015 report also shows that student borrowing continues to decline. Total education loan volume declined by 6% in 2014-15, and was 14% lower than in 2010-11. Average federal loans per undergraduate student also declined by 6% in 2014-15 — and by $870 (in 2014 dollars) over four years.

The report highlights differences in debt levels and in default patterns among different groups. Students who do not complete their degrees default on their student loans within two years of beginning repayment at almost three times the rate of those who graduated. Independent students, students who take longer to earn their degrees, and those who attend for-profit institutions are among those who accumulate the most debt for their undergraduate degrees.

Key Pricing Findings

•Between 2005-06 and 2015-16, published in-state tuition and fees at public four-year institutions increased at an average annual rate of 3.4% per year beyond inflation, compared to average annual rates of increase of 4.2% between 1985-86 and 1995-96 and 4.3% between 1995-96 and 2005-06.

•Average published tuition and fees for full-time in-state students at public four-year colleges and universities increased 2.9% before adjusting for inflation, rising from $9,145 in 2014-15 to $9,410 in 2015-16.

•Average published in-state tuition and fees at public four-year institutions range from $4,890 in Wyoming and $6,350 in Montana to $14,990 in Vermont and $15,160 in New Hampshire.

•Average published tuition and fees for full-time out-of-state students at public four-year colleges and universities increased 3.4% before adjusting for inflation, rising from $23,107 in 2014-15 to $23,893 in 2015-16.

•Average published tuition and fees at private nonprofit four-year institutions increased 3.6% before adjusting for inflation, rising from $31,283 in 2014-15 to $32,405 in 2015-16.

•Average published in-district tuition and fees at public two-year colleges increased 3.0% before adjusting for inflation, rising from $3,336 in 2014-15 to $3,435 in 2015-16.

•State funding per full-time equivalent (FTE) student in public two-year and four-year institutions declined from a high of $10,110 (in 2014 dollars) in 2000-01 to $6,960 in 2012-13, and rose to $7,540 in 2014-15.

•Total postsecondary enrollment, which increased by 20% between 2005 and 2010, declined by 3% between 2010 and 2013; enrollment in the public and private nonprofit four-year sectors grew slightly over these three years.

Key Student Aid Findings

•Undergraduates received an average of $14,210 in financial aid in 2014-15, including $8,170 in grants from all sources, $4,800 in federal loans, $1,170 in education tax credits and deductions, and $70 in Federal Work-Study.

•Inflation-adjusted grant aid per FTE undergraduate student increased by 56% between 2004-05 and 2014-15, with only 7% of that increase between 2010-11 and 2014-15.

•Total Pell Grant expenditures increased from $16.5 billion (in 2014 dollars) in 2004-05 to $39.0 billion in 2010-11, but declined to $30.3 billion by 2014-15. The percentage of all grant aid coming from the Pell program increased from 24% in 2004-05 to 33% in 2010-11 and was 24% in 2014-15.

•After increasing by more than 60% in inflation-adjusted dollars between 2006-07 and 2010-11, total federal borrowing declined by 20% among undergraduates and by 12% among graduate students between 2010-11 and 2014-15.

•Total borrowing from the federal Direct Subsidized and Unsubsidized Loan Programs fell by 20% ($19.5 billion in 2014 dollars) between 2010-11 and 2014-15. Total borrowing from the PLUS program for parents of undergraduate students fell by 9% ($1 billion); Grad PLUS borrowing increased by 2% ($200 million).

•In 2014-15, the average undergraduate who borrowed from the Stafford Subsidized Loan Program borrowed $3,750, 9% less than in 2010-11; the average undergraduate who borrowed from the Stafford Unsubsidized Loan Program borrowed $4,125, 11% less than four years earlier.

•In 2013, households currently in the top quartile of the income distribution held 47% of outstanding education debt; those in the lowest income quartile held 11%.

•In 2015, 3.9 million federal Direct Loan borrowers were in repayment plans that limit their payments to a specified percentage of their incomes. These borrowers constituted 20% of those in repayment plans; they held 37% of the total outstanding debt in repayment plans.

•Loans issued to students enrolled in for-profit institutions increased from 13% of total outstanding federal student loan balances in 2003-04 to 21% in 2013-14.

•Among borrowers who entered repayment in 2011-12, 9% of those who completed their programs and 24% of those who did not graduate defaulted on their student loans within two years of entering repayment.