College is cheaper

College tuition at public universities costs students less, reports USA Today.

What students pay on average for tuition at public universities has fallen by nearly one-third since 1998, thanks to new federal tax breaks and a massive increase in state and federal grants to most students and their families.

Financial aid increased by 80 percent, with most of the benefits reaching middle-class families earning $40,000 to $100,000 a year.

While public university tuition increased by 18 percent since 1998, few students pay the listed tuition price, USA Today points out.

In 2003, students paid an average of just 27% of the official tuition price at four-year public universities when grants and tax breaks are counted. Students at private universities paid an average of 57%.

About three quarters of college students attend public universities.

Colleges play a “shell game” with tuition prices, says King Alexander, president of Murray State University in Kentucky.

1. The university raises its official tuition price.

2. The higher tuition qualifies many students for bigger federal and state grants, which are passed on to the school.

3. The university writes a “scholarship” to cover the rest of the tuition hike, so many students don’t actually pay more.

Legislators earn more brownie points with middle-class voters by subsidizing college students directly, rather than increasing funding to public universities.

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  1. Michael says:

    It won’t be for long in Illinois, at least if the governor keeps cutting funds to state universities. We’re now at 1998 levels, with no bottom in sight. My theory is that he’s trying to reduce quality at the universities enough to the point he could actually graduate from one.

    Seriously, cuts in funding at this level mean cuts in available classes, which means that students will take longer to graduate. That costs money both in tuition and delayed income.

  2. John Doe says:

    Demand-side subsidies cause inflation.

    Aid increases cause universities to increase tuition. The tuition increases cause the government to increase aid. The new aid increase causes unversities to again increase tuition. ad infinitum. The same process is at work with health care.

  3. Hi Ms. Jacobs, I just found your blog recently and it’s quite an interesting read.

    I’m a college undergrad and I posted my opinions on “academic freedom” on my blog if you are interested…be sure to check it out.

    Keep up the great work.

  4. J Thomason says:

    John Doe – YES. Increasing government funding just causes tuition to increase to match. It’s a great racket.

    As a side effect, it makes people more and more dependent on the government.

  5. “It won’t be for long in Illinois, at least if the governor keeps cutting funds to state universities. We’re now at 1998 levels, with no bottom in sight.”

    And were Illinois universities really bad in 1998? If not, why would they be if they were funded at 1998 levels forever? Or even at 1990 levels?

    This all seems like a positive development to me.

  6. Unfortunately, the bottomed out spending pre-recall left much of California’s public universities. Thank you, tax-and-spenders!

  7. Michael says:

    Ken, I suggest you take a course in economics and learn about inflation. Further, enrollments have increased steadily in the past few years, and the dollars given have been cut about 17% in three years (in one case, for example, $47m from $57m). This at a time the governor has approved vast increases in spending elsewhere, including $8.5m for a gay cultural center in Chicago. I don’t have a problem with a gay cultural center, but I do think it ought to wait until the state is solvent. One of the ways he decided to pay for his pet projects was to cut funding for scholarships to excellent students who agreed, in return for those scholarships, to teach in disadvantaged schools for five years. Just to be clear, the legislature is up in arms about this idiot governor, who is, in addition to being irresponsible, a pompous ass who’s managed to offend nearly every politician in the state. He inherited a mess, but he’s made it worse.