How the Rising Cost of College Is Changing Families’ Calculus

Key Takeaways

College enrollment is up 3.2%, with tuition and fees increasing by 4.7% since 2020.
Families are preparing earlier and utilizing strategies like financial aid appeals to manage costs.
Rising college expenses influence student choices, leading some to opt for more affordable state schools.
Understanding "net price" versus "sticker price" is crucial for financial planning.

18 million students enrolled in post-secondary education this spring, a 3.2% increase from last year.
College tuition and fees increased by 4.7% by 2023 compared to 2020, partly due to higher administrative costs.
Reduced state and federal funding also contribute to rising tuition expenses.
The actual "net price" a family pays after financial aid often differs significantly from the advertised "sticker price."

Families prepare earlier for college by hiring advisors and using 529 accounts.
Anna Sophia, 18, applied to 20 universities, including Ivy League schools, despite high costs.
She successfully appealed Brown University's initial financial aid offer by leveraging aid packages from other institutions like Northwestern and Notre Dame.
Even with aid, Brown's annual undergraduate tuition exceeds $70,000, requiring her to plan for campus work, scholarships, and paid internships.

Advisor Greg Kaplan observes a new trend of families forgoing "elite" institutions for more affordable state schools.
Families spent an average of $13,837 on college this year, representing a 9% increase.
While 82% of families were willing to stretch their budgets, 79% ruled out schools based on cost.