Average tuition adjusted for inflation more than doubled between 1981 and 2000 at public and private not-for-profit 4-year colleges and universities (The College Board 2001a). During the same period, median family income grew 27 percent, and financial aid per full-time-equivalent student grew 82 percent. Responding to increasing public concern over the affordability of higher education, Congress established the National Commission on the Cost of Higher Education to examine the causes for rising costs. The Cost Commission subsequently issued a report called Straight Talk About College Costs and Prices (1998), which distinguished price from cost and defined these terms differently. Cost is the amount it takes an institution to educate a student (i.e., the production cost per student), whereas price is the amount students and their families pay to attend. The price that students and families pay after subtracting financial aid awards is referred to as net price. The report concluded that while net price did not increase as substantially as did the "sticker price" charged by institutions, it nevertheless grew at a faster rate than did median income and disposable per capita income during the late 1980s and early 1990s at all three types of colleges and universities studied (public 4-year, private not-for-profit 4-year, and public 2-year institutions).

This study examines the most recent trends in net price. The two major goals of this study are 1) to analyze changes in net price between 1992–93 and 1999–2000 and 2) to examine, within each type of institution, changes in net price over time for students with various levels of income and financial need. The study is a follow-up to a recent congressionally mandated National Center for Education Statistics (NCES) study (Cunningham et al. 2001a) (hereafter referred to as "The Cost Study"), which examined trends in college costs and how costs relate to prices for specific types of institutions.

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