College Tuition Inflation Statistics

Y2K fashion may be back in style, but the tuition prices of 20 years ago are long gone. In 2000, the average annual tuition at a four-year public college was less than $4,000. Today, it's $9,375.^{Note Reference [1]}

In recent years, tuition inflation has slowed somewhat, but tuition prices keep climbing. The cost of college makes a difference in who can access higher education and how much student loan debt individuals take on.

This report uses data from the National Center for Education Statistics (NCES) to track tuition inflation — that is, how much tuition prices have increased over the years. We'll also compare the rising cost of college to market, housing, and income inflation.

Tuition Inflation in Recent Years

NCES records the average tuition at all degree-granting institutions. According to NCES, the annual tuition rate increase at four-year colleges has stayed under 3% at public colleges in recent years. It's generally been higher at private schools.

The 2020-2021 school year saw some of the lowest tuition inflation rates of the recent past.

Tuition Inflation Rate Over Time

While tuition prices have soared over the past 20 years, tuition inflation has generally decreased. In other words, tuition is rising slower than it used to.

According to data from NCES:^{Note Reference [1]}

• The average tuition and fees at public four-year colleges and universities rose 13.4% in 2003. It rose 0.3% in 2020.
• The average tuition and fees at public two-year colleges rose 14.8% in 2003 and just 3.7% in 2020.

In the past five years, tuition inflation was generally higher at private colleges than at public ones. However, over the past 20 years, the reverse is true. Tuition inflation has been slightly higher at public colleges and universities than at private ones. It has also been higher at four-year schools than at two-year schools.^{Note Reference [1]}

• On average, from 2000-2020, tuition and fees rose 5.1% a year at public four-year colleges and 3.9% a year at private four-year colleges.
• In the same period, the average tuition inflation rate was 4.7% per year at public two-year colleges and 3.1% at private two-year colleges.

Which Decade Saw the Highest Tuition Inflation?

Compared to other decades, the 1980s saw the highest tuition hikes. During this decade, tuition and fees rose an average of 9.7% per year at four-year schools and 8.4% each year at two-year schools.

How Do College Tuition Increases Compare to Inflation?

In the past 20 years, college tuition and fees have grown twice as fast as the consumer price index (CPI) — a measure of what people pay for market goods like food and gas and a proxy for inflation. CPI inflation was 33% from September 2000-September 2020.^{Note Reference [2]} Tuition inflation was 67%.^{Note Reference [1]}

Since 2000, college tuition has also grown more than the median household income and home price.

For most of the past several years, college tuition has increased faster than inflation. That has only changed recently.

• Even accounting for inflation by measuring in 2020-2021 constant dollars, the average tuition at four-year colleges rose 78% at public schools and 41% at private schools between 2000 and 2020.
• The average annual tuition inflation rate was 2.9% at four-year public schools and 1.8% at four-year private schools in that period.

Why Is College Tuition Inflation So High?

The money colleges make from tuition supports many different functions of the school — like staffing, building upkeep, and technology. So it makes sense that the cost of college rises with the consumer price index. But why would tuition inflation be higher than market inflation?

There are likely several reasons why college is so expensive, from variations in state funding to increased spending on student services and administration costs. Also, college prices aren't capped in the U.S. That means that a college could technically charge whatever amount they want if they think students will pay.

If you're wondering how you'll pay for college, you have options, like scholarships and grants. Complete the Free Application for Federal Student Aid (FAFSA) to see if you qualify for grants from your school.