College costs are dropping, especially at public universities, where tuition and student debt have declined significantly over the past decade. According to the College Board, in-state public university students are paying 40% less after financial aid, with net costs falling from $4,140 to $2,480 per year when adjusted for inflation.
Fewer students are graduating with debt. Only about half of in-state public university students take on loans today, compared to 59% a decade ago. For those who borrow, the average debt is now $27,100—down 17% from ten years ago. These savings are partly due to increased funding during the COVID-19 pandemic, which allowed many schools to freeze or lower tuition.
Private colleges remain more expensive, but tuition hikes have slowed. Over the past decade, tuition at private schools rose only 4%, compared to a 68% increase over the previous 20 years. Many private colleges are offering more financial aid. For example, the Massachusetts Institute of Technology (MIT) now provides free tuition for students from families earning under $200,000 a year.
Community colleges are also becoming more affordable, with costs falling 9% in the last decade. Some public universities, like Purdue in Indiana, have frozen tuition to keep costs down. Purdue’s in-state tuition has stayed at $9,992 for 13 straight years, making it a model for affordability.
Challenges remain, though, for families paying out-of-state tuition or attending private colleges. Costs can reach as high as $95,000 per year at some schools. However, many students receive discounts or financial aid. Rising skepticism about the value of a degree has prompted schools to offer financial incentives and cut programs to attract students.
A bachelor’s degree still pays off over time. Research shows that college graduates earn 75% more than those with only a high school diploma. Despite this, colleges face pressure to balance affordability with rising operational costs as they work to recruit a shrinking number of college-age students.
