For full-time dependent undergraduates, larger grants and loans generally compensated for increases in the total price of attending an institution in the 1990s. Since 1999–2000, however, the net access price of attending a public 4-year institution has increased.

What and how undergraduates and their families pay for college have changed since the early 1990s. Growth in tuition and fees outpaced both inflation and median family income during this period (The College Board 2004), and the financial aid system changed. At the federal level, the 1992 reauthorization of the Higher Education Act expanded eligibility for financial aid, raised loan limits, and introduced unsubsidized loans for students regardless of income. Also, during the 1990s, the federal government introduced tax credits to ease the burden of paying for college, and states and institutions increased their grant programs, particularly programs considering merit (The College Board 2004; Horn and Peter 2003).

The total price of attending a postsecondary institution includes tuition and fees, books and materials, and an allowance for living expenses. In 2003–04, the average price of attendance for full-time¹ dependent students was $9,800 at public 2-year institutions, $15,100 at public 4-year institutions, $29,500 at private not-for-profit 4-year institutions, and $18,100 at private for-profit less-than-4-year institutions. Between 1989–90 and 1999–2000, the average total price of attendance for these students increased at each of the four major types of institutions. Between 1999–2000 and 2003–04, it increased again at public 2-year institutions and at public 4-year and private not-for-profit 4-year institutions.

Many students and their families do not pay the full price of attendance, but receive financial aid to help cover their expenses. The primary types of aid are grants, which do not have to be repaid, and loans, which must be repaid.² Grants (including scholarships) may be awarded on the basis of financial need, merit, or other criteria and include tuition aid from employers. The loan amounts reported in this indicator include student borrowing through federal, state, institutional, or alternative (private) loan programs and loans taken out by parents through the federal Parent Loans for Undergraduate Students (PLUS) program.

Between 1989–90 and 1999–2000, the average amount received in grants and the average amount borrowed, adjusted for inflation, both increased for full-time dependent undergraduates at public 2- and 4-year and private not-for-profit 4-year institutions (see table 47-1). Between 1999–2000 and 2003–04, the average amount borrowed increased for students at public 2- and 4-year institutions and at private not-for-profit 4-year institutions. Increases in the average grant amount between 1999–2000 and 2003–04, however, were statistically significant only for students at public 4-year institutions.

The net access price is an estimate of the cash outlay that students and their families need to make in a given year to cover educational expenses. It is calculated here as the total price of attendance minus grants (which decrease the price) and loans (which postpone payment of some portion of expenses). Between 1989–90 and 1999–2000, grants and loans increased along with total price, and the only statistically significant increase in net access price occurred for full-time dependent undergraduates at public 2-year institutions (see table 47-2). Between 1999–2000 and 2003–04, however, net access price increased at public 4-year institutions despite increases in both grants and loans during that period.

Within type of institution, families at different income levels were affected differently by changes in net access price. For instance, while net access price increased overall at public 4-year institutions between 1999–2000 and 2003–04, only middle-income students faced statistically significant increases; there was no measurable change for low- and high-income students. At private not-for-profit 4-year institutions, while there was no statistically significant increase in net access price overall between 1999–2000 and 2003–04, there was an increase for low-income students, but there was no measurable change for students at other income levels.

¹Full time means students attended full time (as defined by the institution) for the full year (at least 9 months at a 2- or 4-year institution or 6 months at a less-than-4-year institution). (back to text)

²Loans promote access to postsecondary education by providing the cash needed to enroll. However, because the funds must be repaid (with interest), loans defer rather than reduce the price of attending. (back to text)