College tuition has increased — but what’s the actual cost?

More and more Americans are going to college as tuition increases. But what’s the actual cost of higher education? Here’s an analysis of how colleges finances work and how tuition factors in.

Updated on Tue, October 3, 2023 by the USAFacts Team

More and more Americans are going to college. According to data from the Department of Education National Center for Education Statistics (NCES), in 1980, 50% of high school graduates between the ages of 16 and 24 were enrolled in college; in 2016, it was 70%. In 2016, 19.3 million undergraduate students were enrolled in higher education institutions. 70% were enrolled at public schools, 23% at private non-profits schools and 7% at private for-profit schools. The cost of going to college has also changed since 1980 — however, how much it has changed depends on whether you look at the “sticker price” or the net price after financial aid.

Tuition is an increasingly important revenue source

After adjusting for inflation, the average undergraduate tuition, fees, room and board has more than doubled since 1964, from $10,040 to $23,835 in 2018. Tuition has recently grown the fastest at public and private non-profit institutions, for which tuition has gone up 65% and 50%, respectively, since 2000. Tuition at private for-profit institutions has only increased 11%. However, as we describe below, the sticker price (our term for full tuition without aid) only reflects what one shrinking group of students pays for college.

Average undergraduate tuition, fees, room and board
Constant 2017-18 dollars

As tuition has increased, the revenue makeup for many institutions has also shifted, with government funding making up a smaller proportion of revenue for schools, and tuition payments making up a larger proportion. At public institutions, state, local and private funding has decreased from making up 50% of revenue in 1981 to 29% in 2016. It’s not just public schools experiencing a shift in funding sources. Private institutions, which have historically relied on tuition and fees even more than public institutions, have also seen federal funding drop from 19% of revenue to 13%. Tuition payments are making up a larger proportion of their revenue as a result. University-affiliated hospitals are also increasingly important revenue streams for public and private schools, as well as a growing component of institution expenditures.