Get Ready for July Madness

There are no brackets to guide you through it, but July is the prime month for presidential transitions at private colleges. To keep up on who's going where, visit our Comings and Goings page, with up-to-the-minute news of the many appointments now being made.

College Cost Fact Sheet

October 28, 2008

• The Impact of Student Aid
• Cost Drivers
• The Value of a Private Higher Education
• Innovative Efforts to Enhance Affordability
• Innovative Efforts to Cut Costs
• Endowments at Private Colleges
• Providing Opportunity for All Students
  
  

• The majority of students pay far less than the published tuition at private colleges and universities after grant aid and tax benefits. Undergraduate students who receive grant aid pay an average of 53 percent of the published tuition at independent institutions.
  
  
• Eighty-one percent of dependent, full-time undergraduates in independent higher education received some type of grant assistance in 2003-04, averaging $10,011.
  
  
• In 2005-06, private colleges provided an estimated $16.3 billion in undergraduate student aid funding from their own resources - an increase of 250 percent from 1995-06.
  
  
• Undergraduates at independent colleges and universities receive six times as much in grants from their institutions as they do from all federal grant programs combined.
  

• From 1995-96 to 2005-06, institutional grant aid provided by private colleges increased 250 percent, more than three times the rate of tuition (72 percent).
  
  
• The cost of keeping up with innovations in information technology at private colleges and universities was projected to increase 35 percent in 2006-07, according to Market Data Retrieval.
  
  
• Over the past five years, the price of utilities has increased an average of 13 percent a year, according to the Commonfund Institute.
  
  
• The median increase for health care costs at colleges and universities was 9 percent in 2005-06, according to the College and University Personnel Association. From 2001 through 2004, employer health-plan premiums rose by more than 10 percent a year. Students are more likely to use certain treatments, such as prescription drugs, behavioral-health services, and outpatient surgery, with the highest rates of inflation.
  
  
• In recent years, annual premiums for many types of insurance, including general liability, property, and worker's compensation, have commonly increased by double-digit rates. Property insurance is estimated to have increased between 10 to 50 percent in 2006, according to the Chronicle of Higher Education.
  
  
• Periodicals and other library materials routinely increase by double-digit rates each year. The Association of Research Libraries reports that between 1986 and 2004, research library expenditures for scholarly journals increased 273 percent.
  
  
• From 1995 to 2005, the amount invested by colleges to expand and modernize learning and living facilities increased 125 percent, as construction costs rose sharply throughout much of the United States, according to College Planning & Management magazine.

• Seventy-nine percent of bachelor's degree recipients at private institutions graduate within four years, compared to 49 percent of their counterparts at state institutions. Students at private colleges and universities avoid additional years of tuition and begin their careers sooner.
  
  
• Eighty-nine percent of private college graduates report their financial investment was worth it. Nearly 9 in 10 private college seniors say their education strengthened and expanded their writing, interpersonal, and problem-solving skills; critical thinking ability; and expertise in a particular field.
  
  
• Students at private institutions report higher levels of social and academic engagement than their counterparts at state institutions. They more likely to be involved on campus and in their communities, and to rate their college experience higher than their state college counterparts.

• All colleges-and their students-face financial pressures. Private institutions are addressing them by implementing innovative affordability and cost-cutting initiatives. There is no one-size-fits-all approach to cost control and affordability, because of differences in mission, student population, and fiscal resources. Private colleges are employing a variety of strategies.

• A small but growing number of private colleges and universities are reducing their sticker prices for tuition and fees. Others have locked in the tuition rate for a student's four- or five-year enrollment. This means that tuition remains the same each year for a student.

• Several are tapping endowment funds to assist low income students: covering tuition, room, and board; eliminating loans; lowering parental contributions; and matching Pell Grants. Others offer three-year bachelor's degree programs, or four-year graduation and employment guarantees. While funds from state tuition savings plans can be used at private colleges throughout the nation many institutions have gone further to develop tuition prepayment plans for future students.

• Private colleges and universities also are implementing-and expanding-better business practices to control operating costs, enhance efficiency, and give students a high quality education at the lowest price possible.

• Fast growing consortial arrangements are allowing private colleges to leverage joint purchasing power for lower costs on energy, insurance, and information technology; reduce administrative and academic redundancies; and offer students new learning opportunities and better services.

• Colleges nationwide are moving to implement and expand environmentally-friendly systems that reduce energy consumption and result in significant cost savings They are also outsourcing services, targeting cost reductions, implementing new information technology for administrative functions, and streamlining staff while safeguarding quality.

• These efforts have helped to temper increases in tuition and fees. The 14 percent inflation-adjusted increase in published tuition and fees at private institutions from 2002-03 to 2007-08 is the lowest five-year increase since 1982.

• Endowments are essential to the ability of colleges and universities to sustain themselves for future generations and in uncertain economic times. Unlike public colleges, which are backed by the full faith and credit of the state, private colleges have no such safety net, nor regular source of outside funding to rely on. For many institutions, endowments serve that vital purpose.

• Endowments at the vast majority of private colleges and universities are surprisingly small. Of the nation's 1,600 private colleges and universities, only 41 have endowments of $1 billion or more; the rest have a median endowment of $15.1 million. Especially in today's economy, these levels provide no more than a small cushion of financial safety for many institutions.

• With the dramatic decrease in endowment value and earnings as a result of the current economic crisis, all colleges and universities - but especially those with smaller endowments - are likely to face even greater financial pressures in the coming year.

• The billions of dollars in student aid from independent colleges themselves ensure that all types of families will have access to a quality private college education.

• Private and public colleges and universities enroll the same percentage of students with family incomes below $25,000 (17 percent).
  
  
• Thirty percent of students at four-year private colleges and universities come from minority backgrounds, compared to 26 percent at four-year public universities.