A reporter for USA Today, using data from the College Board, the Office of Management and Budget, and the Internal Revenue Service, wrote a front-page article that turned conventional wisdom on college prices on its ear.
Dennis Cauchon wrote in the June 28 issue that the tuition burden shouldered by students 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.”
In his analysis, Cauchon focused on “what students actually pay in tuition and fees” as opposed to “the published tuition price.”
He compared the present trend toward greater college affordability, which he acknowledged was “[c]ontrary to the widespread misperception that tuition is soaring out of control,” to the effect of the federal GI Bill for returning World War II veterans.
“What made the difference,” Cauchon wrote, is “a $22 billion annual increase in grants and tax breaks since 1998.” That amounted to an 80 percent jump in financial aid, Cauchon reported.
The eight tax breaks Congress has approved for higher education since 1997 also helped. Tuition tax credits lowered the tax burden of 6.5 million families by an average of $1,350, and tuition tax deductions lowered the total tax burden of an additional 3.5 million families by an average of $325.
Cauchon’s analysis has its critics, of course. Patrick M. Callan, president of the National Center for Public Policy and Higher Education, a nonprofit research group, told The Chronicle of Higher Education Aug. 6 that Cauchon’s analysis was wrong. “The article totally undercut the argument for increasing aid,” he said.
However, Sandy Baum, an economist with the College Board, told Cauchon that although college is a sizable family expense, “the average student is much better off today than headlines would have you believe.”
“Other studies focus on the listed price of tuition,” Cauchon wrote, which “[f]ew people actually pay.” Instead, Cauchon looked at “what students pay for tuition and fees after grants, discounts, tax credits, and deductions.” By doing so, he found that students in 2003 paid, on average, only 27 percent of the listed tuition price at four-year public universities, and only 57 percent at private ones.
The net effect was that, from 1997-98 to 2002-03, the average tuition paid by students at public universities fell by 32 percent, from $1,636 to $1,115 — even though the average published tuition price rose by 18 percent, to $4,202.
The average tuition paid by students at private universities rose by only 7 percent, to $10,684, while the average published tuition price for private universities rose by 20 percent.
Jon Sanders is assistant editor of Carolina Journal.