Net Price and Net Tuition After Grants

Because grant aid does not have to be repaid, it reduces the price that recipients pay to attend college. Therefore, in addition to looking at the increases in the total price of attending (table 2) and tuition and fees (figure 2) between 1990 and 2000, it is important to examine the changes in net price (total price minus grants) and net tuition and fees (tuition and fees minus grants). In addition to providing a more accurate indication of the price of attending college, these measures allow us to address whether the increases in grant aid just described were sufficient to offset the increases in the total price of attending or even the increases in tuition and fees.

• Net price after grants increased.

Between 1990 and 2000, after grants are taken into account, the average net price of attending for full-time dependent undergraduates increased (after adjusting for inflation) at all four types of institutions (table 5). The net price increases mean that, on average, the grant increases shown in table 4 were not large enough to offset the total price increases that occurred in the 1990s. Average net price appeared to increase for all income groups, although the increases were not statistically significant for students in the lowest income quarter at public 2-year or private for-profit less-than-4-year institutions.

• Net tuition and fees after grants also increased.

The average net tuition and fees after grants were computed for 1990 and 2000 to determine whether, on average, grant increases during this period were sufficient to cover the increases in tuition and fees.¹³ At public 2-year, public 4-year, or private not-for-profit 4-year institutions, they were not: at each type of institution, after adjusting for inflation, the average net tuition and fees after grants was greater in 2000 than in 1990 (table 5). The average net tuition and fees after grants was generally greater in 2000 than in 1990 for students in each income group at public 2-year and public and private not-for-profit 4-year institutions.¹⁴ At private for-profit less-than-4-year institutions, the apparent changes in the average tuition and fees (figure 2) and net tuition and fees (table 5) were not statistically significant.

¹³If a student’s grants amounted to more than the student’s tuition and fees, the value for net tuition and fees after grants for that student was set to zero to indicate that the student’s entire tuition and fees were covered by grant aid. (back to text)

¹⁴The apparent increases are not statistically significant for students in the highest income quarter at public 2-year institutions or the lowest income quarter at private not-for-profit 4-year institutions; because of the small sample sizes for these groups, the estimates have large standard errors. (back to text)