June 28, 2004

It's (Another Lie) For the Children

Some politicians and special-interest groups are telling you we need to do something about the rising cost of college tuition. Presidential wannabe John Kerry, for example, says you should vote for him so he can fix the problem of rising college tuition. On his campaign website (economy issues link), Kerry claims that, "Over the past two years, the cost to attend a public four-year college has increased by 10 percent, and the cost to attend a public two-year college has increased by 8 percent." Er. Um. That's not true!

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. Contrary to the widespread perception that tuition is soaring out of control, a USA TODAY analysis found that what students actually pay in tuition and fees - rather than the published tuition price - has declined for a vast majority of students attending four-year public universities. In fact, today's students have enjoyed the greatest improvement in college affordability since the GI bill provided benefits for returning World War II veterans.

What made the difference: a $22 billion annual increase in grants and tax breaks since 1998.

That 80% jump in financial aid - targeting middle-class families earning $40,000 to $100,000 a year - has more than offset dramatic increases in tuition prices.

"College still takes a big chunk out of most families' income. But the average student is much better off today than headlines would have you believe," says Sandy Baum, an economist who co-authors an annual report on college costs for the College Board, which oversees college entrance exams.

USA TODAY analyzed what students paid for tuition and fees after grants, discounts, tax credits and deductions. Other studies focus on the listed price of tuition. But listed college tuition is like the sticker price on a new car: Few people actually pay it. 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%.