“College Costs Are Out of Control!” and other similar headlines are a constant in the media coverage of higher education.
The most expensive private colleges do have “sticker prices” in the range of $80,000 per year for tuition, room, board, and other fees. But what colleges say they charge and what they actually take in, on average, are not the same. The so-called full cost of attendance is often only paid by a fraction of the full-time students at a given institution.
Private colleges and universities carefully track their so-called “discount rates,” the percentage of the sticker price an institution actually receives on average for each student who enrolls.
Discount rates at private colleges and universities have been creeping up for many years and now hover at around 55% nationally. The typical institution is taking in well under half of what it advertises as the full cost of attendance.
In states such as Pennsylvania, for example, a discount rate of 55% means the average cost for a student at a private college with a sticker price of $75,000 is roughly $34,000. The full cost of attendance at Penn State University, the biggest in the state, sits currently at $32,270. Since the $34,000 figure is an average, many students at private institutions are paying less than the cost at Penn State, sometimes far less. The discount at public universities is in effect already built in as a function of the lower sticker price.
Another state university system, the Pennsylvania State System of Higher Education (PASSHE), oversees 10 separate universities whose full cost of attendance (tuition/fees, room, and board) is about $22,000.
Students who attend a community college for two years and transfer to a PASSHE school could complete a four-year degree for less than $60,000 in total. And the community colleges and the PASSHE schools also discount their prices for needy students, though generally in smaller increments, so the cost of a four-year degree for many is less than $50,000. Students who are eligible may borrow $23,000 in federal subsidized loans, bringing the total cash outlay for an undergraduate degree through that system to around $25,000 or about $6,000 per year.
With over 2500 colleges and universities offering four-year degree programs and competing with each other to attract students, the range of college and university options in the U.S. is wider than in any other country. And despite the focus on the most expensive of them by the press, the costs of higher education vary widely too.
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