In the 1998 Amendments to the Higher Education Act (HEA), Congress directed the National Center for Education Statistics (NCES) to conduct a new study of higher education costs (expenditures)¹ paid by institutions and prices paid by students and their families. This report is the final product of Phase I of the study, which relied primarily on existing national data and statistical models.

The framework for the study was influenced by the findings of the National Commission on the Cost of Higher Education, published in Straight Talk About College Costs and Prices (1998). This study is one follow-up to the Commission’s recommendations.

Congress directed that the study address a number of specific questions:

• How have tuition and fees changed over time compared with inflation?
  
  
• How have the major expenditure categories (including capital and technology costs) changed over time?
  
  
• How are expenditures related to prices?
  
  
• To what extent does institutional aid (i.e., financial aid provided by institutions) affect tuition increases?
  
  
• To what extent has federal financial aid been used to offset increases in institutional aid?

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