As families across the U.S. prepare for another academic year, new data on college pricing offers a mixed picture: tuition costs are finally trending downward, but higher education remains financially out of reach for many households.
The College Board’s latest annual report shows that, after decades of steady increases, the net cost of college—tuition, fees, room, board, minus grant aid—has begun to fall modestly.
Adjusted for inflation, the average net price at public four-year universities declined from roughly $24,000 in the mid-2010s to about $21,000 in recent years.
Community colleges saw a similar dip, from $18,000 to $16,000, while nonprofit private colleges dropped from about $39,000 to $36,000.
While this is welcome relief, experts caution that costs remain historically high. “College still costs a lot, arguably too much,” said Andrew Gillen, a research fellow at the Cato Institute’s Center for Educational Freedom.
For years, critics have blamed state disinvestment—cuts in public funding that forced institutions to hike tuition. Yet Gillen’s analysis disputes that theory, noting that states actually increased funding by an average of $56 per student annually between 1980 and 2024. Even during periods when funding recovered after recessions, tuition continued to rise.
Other economists point to “Baumol’s cost disease,” which suggests that labor-intensive sectors like teaching inevitably see rising costs as wages rise without productivity gains. But Gillen argues this accounts for less than 10% of tuition increases between 1999 and 2015.
Instead, he points to Howard R. Bowen’s “revenue theory of cost,” which argues that institutions expand spending to match their revenue streams. Under this model, elite institutions like Ivy League universities raise more, and therefore spend more, while community colleges operate under tighter budgets.
“The dominant goals of institutions are educational excellence, prestige, and influence,” Bowen once wrote, describing why colleges consistently push tuition as far as the market will allow.
That reality leaves policymakers and families in a difficult position. More public funding, Gillen notes, won’t necessarily reduce tuition if colleges simply raise spending in parallel. Instead, the debate may shift toward accountability and efficiency in how universities allocate resources.
For now, the slight declines in net tuition provide a rare bright spot—but affordability challenges remain a defining feature of the higher education system.
