A report released today by the National Center for Education Statistics (NCES) shows that changes over time in tuition and fees--the "sticker price" that colleges charge and the costs that colleges incur to educate students--are related in only limited ways, and that there are a number of other factors that have been causing the continued tuition increases at public and private institutions over and above inflation. "This report suggests," said Under Secretary Eugene W. Hickok, "that the relationship between college costs and prices is complex, and it is an issue that requires further study. The Education Department must continue gathering data so that policymakers may make informed decisions in their efforts to monitor college prices and provide financial assistance to help American families from all financial backgrounds afford a college education."

Mandated by Congress, The Study of College Costs and Prices, 1988-89 to 1997-98 used data from the Integrated Postsecondary Education Data System (IPEDS) to examine two main issues: the relationship between college prices (tuition the family and student pay) and costs (what the institution spends), and the relationship of federal and institutional aid to price increases.

Overall, from 1988-89 through 1997-98, tuition charges in both the public and private sectors rose faster than inflation. The study found that tuition increases at private institutions were related to factors such as providing more institutional financial aid to students and increases in faculty salaries, along with decreases in endowment revenue and private gifts. In contrast, at public 4-year institutions, a decline in state appropriations was the single most important factor associated with increases in tuition. In addition, states with higher per capita income and higher tuition at public institutions had higher private not-for-profit 4-year college tuitions.

Given the limitations of the study, it could not fully address the relationship between tuition charges and increases in student financial aid. However, the study did find that increases in institutional aid were related to increases in tuition at some small public and private 4-year colleges.

This study is a follow-up report to the 1998 study Straight Talk About College Costs and Prices by the National Commission on the Cost of Higher Education. The full text of this report is available on line and may be accessed at http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2002157.

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