Report Highlights. The average annual cost of tuition at a public 4-year college* is 40 times higher than tuition in 1963.
- College tuition inflation averaged 3.63% annually from 2010-2011 to 2022-2023.
- The cost of tuition at public 4-year institutions increased 36.7% from 2010 to 2023.
- After adjusting for currency inflation, college tuition has increased 197.4% since 1963.
- The most extreme decade for tuition inflation was the 1980s, when tuition prices increased 9.16%.
*Public data always uses in-state tuition unless otherwise noted.
Related reports include Average Cost of College | Average Cost of a College Credit Hour | Average Cost of College by State | Average Cost of Private School | Average Cost of Community College
College Tuition Inflation Rates
While tuition inflation is not consistent, annual rates have generally trended downward since 2010.
- From 2010-2011 to 2022-2023, the average annual tuition inflation rate at a public 4-year college was 2.64%.
- Over that same period, tuition increased 36.7%.
- Among public 4-year institutions, the average annual inflation rate has increased 2.07% over the past 5 years.
- All private, nonprofit postsecondary institutions reduced tuition by 20.4% from 2010 to 2023; average tuition increased 44.9% in that same period.
- All private, for-profit postsecondary institutions increased tuition inflation 219% from 2010 to 2023; the average tuition increased 15.9%.
- Among all postsecondary institutions, tuition increases at a 5-year average annual rate of 3.08%.
Historical College Tuition Inflation
Tuition at 4-year public universities increased more than 75% every decade from the 1970s through the 2000s.
- The average 4-year public annual college tuition inflation rate of the 2010s (3.05%) was the lowest of any decade since the Higher Education Act of 1965 authorized federal student loans.
- In 1963, the average annual cost of tuition at a 4-year public college was $243.
- Adjusted for inflation, this amounts to $2,487 as of 2024’s second fiscal quarter.
- Since 1968, the average annual tuition inflation rate at public 4-year institutions has been 6.53%.
- Annual tuition at private 4-year institutions has averaged a 4.12% (non-profit institutions) and 1.93% (for-profit institutions) increase since 2000.
| Decade | Public 4-Year Undergraduate | All Undergraduate |
|---|---|---|
| 2010s | 3.05% | 2.83% |
| 2000s | 7.51% | 5.95% |
| 1990s | 6.58% | 6.46% |
| 1980s | 9.23% | 9.50% |
| 1970s | 7.22% | 7.13% |
Graduate School Tuition Inflation
Tuition inflation for graduate school students mirrors undergraduate tuition inflation.
- From the 1989-1990 academic year to 2021-2022, graduate school tuition (public) increased at an average annual rate of 5.92%.
- Among public institutions, the average annual graduate tuition inflation rate over the past 5 years is 1.37%.
- Average annual graduate school tuition inflation over the last 5 years is 2.27% at nonprofit private institutions.
- Over the last five years, graduate tuition at for-profit institutions has an average annual decrease of 0.25%
Analysis: Why College Tuition Increases
While no single cause is attributed as the primary reason college tuition keeps increasing, several possible explanations have been offered on the subject. Each of these ideas explain the rise in tuition as a result of an imbalance in market-driven economics.
- The Bennett Hypothesis
The more grant aid a college student and their family get, the more they are willing to pay for tuition; subsequently, this allows colleges to set higher rates of tuition. - The Golden Ticket Fallacy
Believing any college degree would result in improved future earnings results in college students doing less in-depth research on the cost of college, including tuition. - The Invisible Menu
The published prices of tuition do not include grant aid or discounts the student may receive. With the true cost of tuition obscured, colleges have trouble lowering prices to match their competition. - Oligopolistic Competition
For the majority of college students finding a college constrains them to their local geographic area. Without competition, the small number of local colleges in the area can keep tuition rates high. - Excessive Regulation
Regulation, accreditation, and federal subsidies make it difficult for innovative providers of higher education to emerge and offer the kind of competition the market needs to lower tuition prices.