The cost of obtaining a college degree continues to be a major financial challenge for many households.
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According to recent data from U.S. News, the 2024-2025 academic year saw tuition and fees rise by 5.5% at private colleges and around 2.2% at public institutions. When adjusted for inflation, private college costs increased by 2.5%, while public in-state costs decreased by 0.6%.
In 2024, the average in-state tuition at public colleges is around $11,011, nearly 75% less than the $43,505 for private universities. The total cost for out-of-state students at public universities averages around $24,513. It is important to remember that tuition and fees are only part of the picture - other expenses like housing and textbooks add thousands of dollars to the cost to attend these schools.
Despite these sticker prices, many private colleges reduce costs significantly with financial aid such as scholarships and grants. For example, a study by the National Association of College and University Business Officers (NACUBO) reports that private nonprofit schools offered on average 56.1% tuition discount in 2023-2024 for first-year students, the highest since 2014.
Photo credit: U.S. News
Prestigious schools such as Harvard University advertise the price of $61,676 for tuition and other fees for the 2024-2025 school year. However, the average cost for students to attend after all financial aid is taken into consideration was still $14,634. The name of the school may make the hefty price worthwhile, but there are families that are unable to afford tuition in such large sums.
While Harvard is expensive to attend even with aid, schools like Princeton University provide grants that can cover tuition and other costs entirely. Princeton’s average need-based grant for undergraduates in 2024-2025 was $71,864, exceeding its tuition of $62,400. Almost 64% of undergraduates at Princeton received grants and the students who received surplus financial aid are able to put the money towards housing and food.
The cost of attending college also continues to vary depending on region, with the Northeast remaining the most expensive. Ivy League schools call the Northeast home and states such as Vermont, New Hampshire, and Massachusetts are also not very cheap states to live in. For example, Vermont’s public colleges have an average in-state tuition of $18,890 while Wyoming’s contrasts at $6,698.
Over the last few years, National Association of Student Financial Aid Administrators (NASFAA) reported that college enrollment has been declining which directly impacts the total financial aid disbursed. From 2019-2021, college enrollment declined by 5% with nearly 950,000 fewer students attending. With fewer students attending, less aid is being allocated. For example, Pell Grant funding, a critical source of support for low-income students, saw a significant decrease. In 2010-11, Pell Grant funding reached its peak at $47.9 billion, supporting 9.3 million students. By 2022-23, that number had dropped to $27.2 billion, with only 6 million students receiving aid.
Despite this decline in federal aid, aid from colleges themselves has increased. This means that colleges are providing more of their own resources to help students with attending costs. Private nonprofit four-year institutions, for example, increased their institutional aid significantly, offering an average of $19,870 per student in 2020-21, compared to $9,000 in 2006-07. Similarly, public four-year institutions raised their average institutional aid from $1,700 in 2006-07 to $3,800 in 2020-21.
These trends suggest that while federal and state financial aid programs are shrinking, colleges are stepping in to fill the gap. However, the overall reduction in federal grants mean that many students will continue to struggle to cover costs, especially with rising tuition and associated living expenses. This situation could lead to increased reliance on loans, which will only continue the ongoing student debt downward spiral.
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