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College tuition has increased — but what’s the actual cost?

More and more Americans are going to college as tuition increases. But what’s the actual cost of higher education? Here’s an analysis of how colleges finances work and how tuition factors in.

Updated on Tue, October 3, 2023 by the USAFacts Team

More and more Americans are going to college. According to data from the Department of Education National Center for Education Statistics (NCES), in 1980, 50% of high school graduates between the ages of 16 and 24 were enrolled in college; in 2016, it was 70%. In 2016, 19.3 million undergraduate students were enrolled in higher education institutions. 70% were enrolled at public schools, 23% at private non-profits schools and 7% at private for-profit schools. The cost of going to college has also changed since 1980 — however, how much it has changed depends on whether you look at the “sticker price” or the net price after financial aid.

Tuition is an increasingly important revenue source

After adjusting for inflation, the average undergraduate tuition, fees, room and board has more than doubled since 1964, from $10,040 to $23,835 in 2018. Tuition has recently grown the fastest at public and private non-profit institutions, for which tuition has gone up 65% and 50%, respectively, since 2000. Tuition at private for-profit institutions has only increased 11%. However, as we describe below, the sticker price (our term for full tuition without aid) only reflects what one shrinking group of students pays for college.

Average undergraduate tuition, fees, room and board Constant 2017-18 dollars

As tuition has increased, the revenue makeup for many institutions has also shifted, with government funding making up a smaller proportion of revenue for schools, and tuition payments making up a larger proportion. At public institutions, state, local and private funding has decreased from making up 50% of revenue in 1981 to 29% in 2016. It’s not just public schools experiencing a shift in funding sources. Private institutions, which have historically relied on tuition and fees even more than public institutions, have also seen federal funding drop from 19% of revenue to 13%. Tuition payments are making up a larger proportion of their revenue as a result. University-affiliated hospitals are also increasingly important revenue streams for public and private schools, as well as a growing component of institution expenditures.

Average undergraduate tuition, fees, room and board (Constant 2017-18 dollars, by institution type)

Non-profit Institutions

Average undergraduate tuition, fees, room and board (Constant 2017-18 dollars, by institution level)

Two-year Institutions

Despite these shifts in revenues, colleges have not really altered how they spend money. Public schools spend heavily on instruction and student services, with expenditures shifting slightly from instruction to student services during the last 30 years. Both private non-profit and for-profit institutions also spent most of their revenue in these areas, though non-profits have shifted more dollars away from student services and more toward “Other” spending (a miscellaneous category that contains expenses that don’t fit in other categories, such as an early retirement program for faculty and staff ), while for-profit institutions have shifted dollars toward student services.

However, expenditures can vary greatly by institution. For example, top research universities may spend a much larger proportion of expenditures on research—for example, University of California Berkeley spends 26% of expenditures on research—whereas many post-secondary institutions, such as Berkeley City College, may spend nothing on research.

Institution revenues (Public institutions)

Auxiliary enterprises in the United States

$27,581,335,730

Institution revenues (Private non-profit institutions)

Investment income gains (losses) in the United States

-$2,736,521,305

Institution revenues (Private for-profit institutions)

Student tuition and fees in the United States

$14,429,842,000

Sticker v.s. net price

While the sticker price of college is increasing, fewer students are paying the full price due to grant aid. For example, while the average tuition at public institutions in 2016 was $17,459, the average tuition revenue institutions received on average per full-time student was only $7,547.

Federal grants are the most common type of aid students receive — about two in five students at public and non-profit schools receive some form of federal grant aid compared to two-thirds of students at for-profit schools. There are four major types of federal grants , the largest of which is the Pell Grant program, which is available for students for whom the difference between cost of attendance and the expected family contribution exceeds a certain amount (roughly $600 for full-time students according to information provided in a student’s FAFSA ( IFAP )).

Across almost all categories and school types, more students are awarded grant aid to pay for school, meaning fewer students are paying the list price. In 2000, 44.4% of all undergraduates received grant aid, whereas in 2016, that number increased to 63.1%.

Institution expenditures (Public institutions)

Instruction in the United States

$108,162,492,300

Institution expenditures (Private non-profit institutions)

Student services, academic and institutional support in the United States

$32,937,346,000

Institution expenditures (Private for-profit institutions)

$9,198,033,000

Note: These categories are not mutually exclusive — many students receive multiple types of aid. The population covered in this table is first-time, full-time students at degree-granting institutions.

The average amount of grant aid has also increased, but few types of grant aid have increased at the same rate as tuition, which has increased 53% since 2001.

While federal grants are the most common form of aid, the largest forms of aid from a monetary standpoint, are institutional grants and scholarships. The average amount of federal aid received per student receiving aid ranged between $4,453 and $5,208 per school year.

Percent of full-time, first-time undergraduate students awarded grant aid (Public)

FederalState/LocalInstitution
200130.0%33.5%22.7%
200631.1%34.8%25.1%
201146.0%35.9%27.2%
201345.1%36.2%31.2%
201444.9%37.3%32.4%
201544.2%38.1%34.3%
201642.2%37.2%35.6%
201741.6%37.2%37.1%

Percent of full-time, first-time undergraduate students awarded grant aid (Private non-profit)

FederalState/LocalInstitution
200128.4%31.8%68.1%
200626.5%31.3%73.8%
201136.4%27.7%78.4%
201333.8%26.1%79.9%
201433.7%26.1%81.1%
201535.0%24.9%78.3%
201635.2%23.8%78.7%
201736.9%22.6%75.7%

Percent of full-time, first-time undergraduate students awarded grant aid (Private for-profit)

FederalState/LocalInstitution
200149.3%15.2%6.2%
200655.6%11.4%8.8%
201175.7%9.0%15.5%
201371.9%7.8%18.2%
201472.8%8.2%21.5%
201573.1%8.6%20.7%
201669.9%8.7%25.3%
201767.8%7.6%18.8%

So, what does this mean most students end up paying? For the roughly 55% of students receiving any form of federal aid—including federal grants, loans, or work-study aid — the average annual net price of the school, or the sticker price minus any government or institutional grants and scholarships, was $16,147 in the 2016-17 school year.

This average net price varies based both by the student’s family income and by the type of school. A family earning $30,000 per year may on average pay $9,510 per year for their child to attend a four-year public institution (48% of the average sticker price). Enrolling in a four-year, private non-profit institution would cost $20,150 per year, or 44% of the average private non-profit sticker price.

Note: Net price data is for students receiving some form of federal aid—including federal grants, loans, or work-study aid. For this reason, data for students from higher-income families is more limited and may not be representative.

When looking at students receiving any form of federal aid, the net price of college has not dramatically changed since 2010. While the sticker price average for four-year institutions has increased 12.4% since 2010, the net price has only increased 1.7%. For two-year institutions, the sticker price increased 10.8%, whereas the net price decreased 5.6%. The percent of students receiving any form of federal aid has also increased from 36.6% in 2001 to 55.9% in 2016. This appears to be part of a larger trend of federal funding shifting from operating grants and non-operating appropriations to non-operating grants, which includes grant aid to students like Pell Grants.

Note: Net price data is for students receiving some form of federal aid—including federal grants, loans, or work-study aid.

However, not all students who need financial help qualify for federal aid and increasing sticker prices are still felt by many students. In 2017, while 56% students received federal aid, 83% of students received either government or institution grants or student loans (excluding Parent PLUS loans). For many students, what’s left over after grant aid — if they even receive grant aid — requires student loans.

Learn more about education in the US and get the data directly in your inbox by signing up for our newsletter.

Department of Education, National Center for Education Statistics, Digest of Education Statistics

Department of Education, College Scorecard

Department of Education, Integrated Postsecondary Education Data System

Explore more of USAFacts

Related articles, which states have the highest and lowest adult literacy rates, the price of college is rising faster than wages for people with degrees, who are school resource officers, and what do they do for school safety, how often do teacher strikes happen, related data, inflation-adjusted median annual earnings of full-time workers aged 25-34, average pell grant award, pell grant applicants.

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Qualified education expenses

More in credits & deductions.

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Qualified education expenses are amounts paid for tuition, fees and other related expenses for an eligible student.

Who must pay

Qualified education expenses must be paid by:.

  • You or your spouse if you file a joint return,
  • A student you claim as a dependent on your return, or
  • A third party including relatives or friends.

You can claim an education credit for qualified education expenses paid by cash, check, credit or debit card or paid with money from a loan.

If you pay the expenses with money from a loan, you take the credit for the year you pay the expenses, not the year you get the loan or the year you repay the loan.

Qualified education expenses for education credits

Qualified expenses are amounts paid for tuition, fees and other related expense for an eligible student that are required for enrollment or attendance at an eligible educational institution. You must pay the expenses for an academic period* that starts during the tax year or the first three months of the next tax year.

Eligible expenses also include student activity fees you are required to pay to enroll or attend the school. For example, an activity fee that all students are required to pay to fund all on-campus student organizations and activities.

For AOTC only , expenses for books, supplies and equipment the student needs for a course of study are included in qualified education expenses even if it is not paid to the school. For example, the cost of a required course book bought from an off-campus bookstore is a qualified education expense.

See our Education Credits Frequently Asked Questions  page for more information.

Expenses that do not qualify

Even if you pay the following expenses to enroll or attend the school, the following are not qualified education expenses:

  • Room and board
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Sports, games, hobbies or non-credit course

Expenses for sports, games, hobbies or non-credit courses do not qualify for the education credits or tuition and fees deduction, except when the course or activity is part of the student’s degree program. For the Lifetime Learning Credit only , these expenses qualify if the course helps the student acquire or improve job skills.

Course of study and LLC

You must pay the expenses for higher education that result in a degree or other recognized education credential. For the Lifetime Learning Credit, you can qualify if you take the course to acquire or improve your job skills.

Academic period

You must pay the qualified education expenses for an academic period that starts during the tax year or the first three months of the next tax year. Academic periods can be semesters, trimesters, quarters or any other period of study such as a summer school session. Academic periods are determined by the school. For schools that use clock or credit hours and do not have academic terms, the payment period may be treated as an academic period.

Expenses cannot be paid with tax-free funds

You cannot claim a credit for education expenses paid with tax-free funds. You must reduce the amount of expenses paid with tax-free grants, scholarships and fellowships and other tax-free education help.

What if the student withdraws from classes?

You can claim the credits for any amounts not refunded if the student withdraws.

Refund of qualified education expenses

See Publication 970 for information on what to do if you receive a refund of qualified education expenses during the tax year.

Return to Education Credits

Education benefit resources

Information for Schools, Community and Social Organizations on our Refundable Credits Toolkit  

Tax Preparer Due Diligence Information on our Tax Preparer Toolkit

Watch out for these common errors made when claiming education credits

  • Students listed as a dependent or spouse on another tax return
  • Students who don’t have a Form 1098-T showing they attended an eligible educational institution
  • Students claimed for whom qualified education expenses  were not paid
  • Claiming the credit for a student not attending a college or other higher education

Find more answers to the questions you ask about the education credits

See Education Credits: Questions and Answers

More education benefit resources

  • Education Credits: AOTC and LLC
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  • Compare Education Credits
  • Interactive App: "Am I Eligible to Claim an Education Credit?"
  • No Double Benefits Allowed
  • Qualified Education Expense
  • Eligible Educational Institution
  • Tax Benefits for Education: Information Center

Technical Forms and Publications

  • Publication 970, Tax Benefits for Education PDF
  • Form 8863, Education Credit PDF
  • Form 8863 Instructions PDF
  • Form 1098-T, Tuition Statement PDF
  • Forms 1098-E and T Instructions PDF

Education Credit Marketing Resources

  • Publication 4772 American Opportunity Tax Credit Flyer PDF
  • Publication 5081 Education Credits On-line Resource PDF
  • Publication 5198 Are you or a family member attending college or taking courses to acquire or improve job skills? PDF
  • Tax Tip 2022-38 Two tax credits that can help cover the cost of higher education
  • Tax Tip 2022-123 College students should study up on these two tax credits
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The cost of college in the United States - Statistics & Facts

Taking out student loans to afford higher education, is college still worth the cost, key insights.

Detailed statistics

University tuition costs and fees U.S. 2000-2022

Room and board cost per year at U.S. universities 2000-2019

Most expensive colleges in the U.S. 2021-2022

Editor’s Picks Current statistics on this topic

Educational Institutions & Market

Total student loans provided in the U.S. 2001-2023

Value of outstanding student loans U.S. 2006-2024

Further recommended statistics

  • Basic Statistic Average annual costs of attending a 4-year university U.S. 2000-2023
  • Basic Statistic Average undergraduate budgets U.S. 2023/24, by expense and institution type
  • Basic Statistic Tuition cost and student loan amounts U.S. 2021/22, by institution type
  • Basic Statistic Average debt of university graduates in the U.S. 2008-2022
  • Basic Statistic Number of student aid applicants in the U.S. 2006-2022

Average annual costs of attending a 4-year university U.S. 2000-2023

Average annual undergraduate tuition, fees, room, and board for full-time students in four-year postsecondary institutions in the United States from the academic year 2000/01 to 2022/23 (in U.S. dollars)

Average undergraduate budgets U.S. 2023/24, by expense and institution type

Average estimated undergraduate student budget in the United States in academic year 2023/24, by expense category and institution type (in U.S. dollars)

Tuition cost and student loan amounts U.S. 2021/22, by institution type

Average tuition and fees compared to average student loan amount received in the United States 2021/22, by institution type (in U.S. dollars)

Average debt of university graduates in the U.S. 2008-2022

Average university graduate debt levels in the United States from 2008 to 2022 (in U.S. dollars)

Number of student aid applicants in the U.S. 2006-2022

Number of applicants for federal student aid in the United States from 2006/07 to 2021/22 (in millions)

Tuition and fees

  • Basic Statistic University tuition costs and fees U.S. 2000-2022
  • Basic Statistic Average cost to attend a U.S. university 2013-2024, by institution type
  • Basic Statistic Average tuition costs when studying in-state at U.S. universities by state 2018/19
  • Premium Statistic Average tuition and fees at U.S. flagship universities 2023-24
  • Premium Statistic In-state vs out-of-state tuition at public four-year institutions U.S. 2022, by state
  • Premium Statistic Annual tuition and fees at leading universities U.S. 2023/24
  • Basic Statistic Room and board cost per year at U.S. universities 2000-2019
  • Basic Statistic Most expensive colleges in the U.S. 2021-2022

Average cost for tuition and required fees at all degree-granting postsecondary institutions* in the United States from 2000/01 to 2021/22 (in U.S. dollars)

Average cost to attend a U.S. university 2013-2024, by institution type

Average annual cost to attend university in the United States from 2013/14 to 2023/2024, by institution type (in U.S. dollars)

Average tuition costs when studying in-state at U.S. universities by state 2018/19

Average tuition and fees per year when studying in-state at U.S. universities 2018/19, by state (in U.S. dollars)

Average tuition and fees at U.S. flagship universities 2023-24

Average In-state vs. out-of-state tuition at flagship universities in the United States in academic year 2023-24, by state (in U.S. dollars)

In-state vs out-of-state tuition at public four-year institutions U.S. 2022, by state

Average in-state vs. out-of-state tuition at public four-year institutions in the United States in 2022-23, by state (in U.S. dollars)

Annual tuition and fees at leading universities U.S. 2023/24

Annual tuition and fees for full-time students at leading universities in the United States in 2023/24 (in U.S. dollars)

Average cost for room and board at U.S. universities per year from the academic year of 2000/01 to 2018/19 (in U.S. dollars)

Most expensive colleges in the United States for the academic year of 2021-2022, by total annual cost (in U.S. dollars)

Distribution of student aid

  • Basic Statistic Total student grants provided in the U.S. 2002-2023
  • Basic Statistic Total student loans provided in the U.S. 2001-2023
  • Basic Statistic Graduate student aid in the U.S. 2022/23, by source and type
  • Basic Statistic U.S. undergraduate student aid 2022-2023, by source and type
  • Basic Statistic Amount of student loans offered, by federal loan program U.S. 2017-2023
  • Basic Statistic Amount of student aid paid U.S. 2017-2023, by federal grant program
  • Basic Statistic Expenditure on Federal Pell Grants in the U.S. 1981-2023
  • Premium Statistic Grant aid as percentage of total state financial support U.S. 2020/21, by state

Total student grants provided in the U.S. 2002-2023

Total amount provided in student grants in the United States from 2002/03 to 2022/23 (in billion 2022 U.S. dollars)

Total amount provided in student loans in the United States from 2002/01 to 2022/23 (in 2022 billion U.S. dollars)

Graduate student aid in the U.S. 2022/23, by source and type

Amount of graduate student aid provided in the United States in the academic year 2022/23, by source and type (in billion U.S. dollars)

U.S. undergraduate student aid 2022-2023, by source and type

Amount of undergraduate student aid provided in the United States in 2022-2023 (in billion U.S. dollars)

Amount of student loans offered, by federal loan program U.S. 2017-2023

Total amount of student aid distributed in the United States, by federal loan program from 2017/2018 to 2022/2023 (in 2022 million U.S. dollars)

Amount of student aid paid U.S. 2017-2023, by federal grant program

Total amount of student aid distributed in the United States from 2017/2018 to 2022/2023, by federal grant program (in 2022 million U.S. dollars)

Expenditure on Federal Pell Grants in the U.S. 1981-2023

Total expenditure on Federal Pell Grant Awards in the United States from 1981/82 to 2022/23 (in billion 2022 U.S. dollars)

Grant aid as percentage of total state financial support U.S. 2020/21, by state

Share of the total state support for higher education spent on grant aid in the United States in the 2020/21 academic year, by state

Student aid received

  • Basic Statistic Share of students receiving student aid in the U.S. 2020-2021, by type of aid
  • Basic Statistic Percentage of U.S. students with student loans 2020/21, by institution type
  • Basic Statistic Share of Federal Pell Grants recipients U.S. 2012-2023
  • Basic Statistic Recipients of Federal Pell Grants in the U.S. 1980-2023
  • Basic Statistic Share of U.S. students' expenses covered by Pell grants 2003/04-2023/24
  • Basic Statistic Total Education tax savings for college students U.S. 2002-2023
  • Premium Statistic Student grant aid at public 2-year institutions U.S. 2006-2023
  • Premium Statistic Student grant aid at public 4-year institutions U.S. 2006-2023
  • Premium Statistic Student grant aid in private nonprofit 4-year institutions U.S. 2006-2022

Share of students receiving student aid in the U.S. 2020-2021, by type of aid

Share of university students receiving student aid in the United States for the 2020/21 academic year, by type of aid and institution

Percentage of U.S. students with student loans 2020/21, by institution type

Percentage of students attending 2-year and 4-year institutions who have student loans in the United States 2020/21, by type of institution

Share of Federal Pell Grants recipients U.S. 2012-2023

Share of Federal Pell Grant recipients in the United States, as percentage of total undergraduate enrollment from 2012/13 to 2022/23

Recipients of Federal Pell Grants in the U.S. 1980-2023

Number of recipients of the Federal Pell Grant Award in the United States from 1980/81 to 2022/23 (in millions)

Share of U.S. students' expenses covered by Pell grants 2003/04-2023/24

Percentage of U.S. students' expenses for tuition fees, room and board covered by Pell grants from 2003/2004 to 2023/2024

Total Education tax savings for college students U.S. 2002-2023

Total Education tax savings for college students and their parents across the United States from 2002/2003 to 2022/2023 (in billion 2022 U.S. dollars)

Student grant aid at public 2-year institutions U.S. 2006-2023

Average grant aid per student at public two-year institutions in the United States from academic year 2006/07 to 2022/23 (in U.S. dollars)

Student grant aid at public 4-year institutions U.S. 2006-2023

Average grant aid per student at public four-year institutions in the United States from academic year 2006/07 and 2022/23 (in U.S. dollars)

Student grant aid in private nonprofit 4-year institutions U.S. 2006-2022

Average grant aid per student at private nonprofit 4-year institutions in the United States from academic year 2006/07 to 2022/23 (in U.S. dollars)

Student debt

  • Premium Statistic Value of outstanding student loans U.S. 2006-2024
  • Basic Statistic Average student debt for a 4-year bachelor's degree, by institution type U.S. 2020/21
  • Basic Statistic Per capita debt of university graduates in the U.S. 2003-2019
  • Basic Statistic Share of U.S. graduates with debt 2003-2019
  • Basic Statistic U.S. student loan borrowers' debt levels in public four-year colleges 2006-2022
  • Basic Statistic U.S. student loan borrowers' debt levels, private four-year colleges 2006-2022
  • Basic Statistic Average student debt U.S. 2020, by state
  • Premium Statistic Share of Americans with student loan debt U.S. 2023, by state
  • Basic Statistic Student loan cohort default rate in the U.S. 2019, by institution type
  • Basic Statistic Average student debt of students at top U.S. universities 2023
  • Premium Statistic Students with federal loans for higher education U.S. 2023, by repayment status

Value of outstanding student loans in the United States from Q1 2006 to Q2 2024 (in billion U.S. dollars)

Average student debt for a 4-year bachelor's degree, by institution type U.S. 2020/21

Average student loan debt for a four-year bachelor's degree in the United States in 2020/21, by institution type (in U.S. dollars)

Per capita debt of university graduates in the U.S. 2003-2019

Per capita graduate debt levels in the United States from the academic year of 2003/04 to 2018/19 (in U.S. dollars)

Share of U.S. graduates with debt 2003-2019

Share of graduates with debt in the United States from the academic years 2003/04 to 2018/19

U.S. student loan borrowers' debt levels in public four-year colleges 2006-2022

Average amount of debt per borrower at public four-year colleges and universities in the United States from 2006/07 to 2021/22 (in 2022 U.S. dollars)

U.S. student loan borrowers' debt levels, private four-year colleges 2006-2022

Average amount of debt per borrower at private nonprofit four-year colleges and universities in the United States from 2006/07 to 2021/22 (in 2022 U.S. dollars)

Average student debt U.S. 2020, by state

Average debt of university graduates in the United States in 2020, by state (in U.S. dollars)

Share of Americans with student loan debt U.S. 2023, by state

Share of Americans who have some form of student loan debt in their name in the United States in 2023, by state of residence

Student loan cohort default rate in the U.S. 2019, by institution type

Percentage of students in default on student loans after attending 2-year and 4-year institutions United States in 2019, by institution type

Average student debt of students at top U.S. universities 2023

Average student debt of students at the top 20 U.S. universities in 2023 (in U.S. dollars)

Students with federal loans for higher education U.S. 2023, by repayment status

Distribution of federal education loan recipients in the United States as of second quarter fiscal year 2023, by repayment status

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The Postsecondary Education Conundrum

Subscribe to the brown center on education policy newsletter, cecilia elena rouse cecilia elena rouse.

June 5, 2013

Postsecondary education in the United States faces a conundrum: Can we preserve access, help students learn more and finish their degrees sooner and more often, and keep college affordable for families, all at the same time? And can the higher education reforms currently most in vogue—expanding the use of technology and making colleges more accountable—help us do these things?

Since the 1960s, colleges and universities have worked hard to increase access to higher education. Fifty years ago, with the industrial economy booming—as Sandy Baum, Charles Kurose, and Michael McPherson write in the latest issue of the Future of Children —only 45 percent of young people went to college when they graduated from high school. Today, they note, at least 70 percent enroll in some form of postsecondary education. Women, who once accounted for little more than a third of the college population, now outnumber men on campus, and minorities and the poor have also seen many barriers to a college education fall. Certainly, we still have work to do—for example, advantaged children are still much more likely than children living in poverty to go to college, and to attend elite institutions when they do. Yet the gains in access have been remarkable.

Over the past decade, critics have increasingly questioned the quality of college education in the U.S. In particular, they have pointed to low completion rates—only about half of the people who enroll at a postsecondary institution complete a degree or certificate within six years. Yes, there are many reasons that students attend such institutions, but even among those who report that they aspire to earn at least a bachelor’s degree, only about 36 percent do so.

Most recently, the loudest debates in higher education have been about cost. When people talk about the cost of postsecondary education, they usually mean tuition. The most alarming recent increases have been in the “sticker price,” or the published cost of attending an institution. Sticker prices for full-time in-state students at public four-year colleges and universities increased 27.2 percent between 2007 and 2012, according to the College Board. But only about one-third of full-time students pay the sticker price; the other two-thirds of full-time students pay the “net price,” which is the sticker price minus grants and other forms of aid. On average, the net price is 70 percent less than the sticker price. Even so, the net price of college has also increased steeply, by 18 percent over the same five years.

Many people take the sharp rise in tuition costs as evidence that institutions of higher education are inefficient and growing more so—in other words, that colleges and universities are spending more and more money to deliver the same education. They argue that if we aggressively adopt technology and strengthen accountability, we can make colleges and universities more efficient, whether that means providing the same education for less money, or a better education for the same cost.

But, in truth, tuition—whether we’re talking about sticker price or net price—doesn’t really tell us how much a college education costs. As McPherson, who is president of the Spencer Foundation, pointed out recently at a conference at Princeton, an institution’s total expenditure per student is a much better measure of the cost of a college education. Based on 2012 data from the College Board, expenditures per student, especially at public institutions, have been relatively flat over the past decade, increasing by about 6.4 percent at four-year public institutions and actually decreasing at two-year public institutions. Tuition itself accounts for only a part of the total expenditure per student. At public institutions in particular, the rest is made up largely by state subsidies. What has changed in recent years is that state subsidies have fallen precipitously, meaning that parents and students are shouldering more of the cost through rising tuition payments. From 2000 to 2010, the portion of total expenditures covered by tuition at public institutions went from just over one-third to just over one-half, with subsidies falling accordingly. If we look at the cost of college this way, it’s unlikely that growing inefficiency is the main problem facing institutions of higher education; in fact, they are educating more students than ever and doing so at roughly the same cost per student. Nonetheless, few people expect state subsidies to rebound to their former levels. If college is to remain affordable, state institutions must seek ways to lower their cost per student so that they can keep tuition in check.

What are the prospects, then, that technology and accountability can help us rein in the rate of growth in tuition? Unfortunately, the answer isn’t clear.

Policymakers like to focus on advances in technology as a solution for the tuition crisis because a major component underlying the cost of a postsecondary education is the cost of paying the faculty. As long as the wages that faculty members could earn in other parts of the economy continue to increase, there will be upward pressure on the cost of educating students. But if we could use advanced technology to let each faculty member teach more students, we could lower the cost of a college education. However, no one wants such an increase in productivity to reduce the quality of the education that students receive. Therefore, if technology is to help us solve higher education’s quandary, it must provide education at a lower cost without lowering its quality.

We have scant evidence of whether e-learning is comparable in quality to traditional classroom instruction. However,  the best research so far suggests that in large lecture classes, at least, especially those that cover introductory material in some subjects, students learn just as well online as they do in “chalk and talk” classes. We know even less about the long-term cost of teaching in this way. On the one hand, once we pay the start-up and transition costs associated with adopting new technology and training faculty how to use it, the cost per student is likely to fall because faculty will be able to teach more students in larger classes. On the other hand, the best evidence about technology comes from its use in large lecture classes; we know much less about its effectiveness in smaller, typically more advanced courses, which are more expensive to teach by definition. We also have virtually no evidence about technology’s effectiveness in some disciplines, particularly the humanities. If technology can’t deliver the same education that students get in the classroom, what may look like a decrease in cost may actually be a decrease in quality. Thus before we know whether widespread adoption of technological tools is truly a promising approach to reducing the cost of a college education, we need more and better evidence about how these tools affect student learning, in which settings and for whom they work best, and how much they cost to implement and maintain.

Accountability

Policymakers are also talking about accountability as a way out of the postsecondary conundrum. Most public institutions receive state subsidies based on the number of students they enroll. Enrollment-based funding gives these colleges and universities a huge incentive to increase access, but far less incentive to boost completion rates and other measures of student success. On the heels of the movement to increase accountability in K-12 education, a lot of people, including President Obama, have been calling to make colleges and universities more accountable, most notably by tying some portion of state or federal funding to student completion or other measures of success—for example, how many graduates find jobs. Many states have already tried this, but the results have been disappointing (though it must be said, as Davis Jenkins and Olga Rodriguez write in the Future of Children , that much of the research on performance funding thus far has been qualitative rather than quantitative). One reason that performance funding hasn’t worked well may be that the percentage of aid that states have tied to performance has been quite low, meaning that institutions have had little to lose if they fail to meet performance targets. As a result, some reformers are calling for an even stronger connection between funding and accountability. Fair enough, and probably worth a try, but the bottom line is that we have yet to find solid evidence that tying appropriations to student success will produce the results we desire. And caution is in order: Unless such an approach is implemented and monitored carefully, it will create a perverse incentive for institutions to restrict admission to the students who are most likely to do well, thus potentially reversing the gains in access that we’ve worked so hard to achieve.

Despite the caveats I’ve presented here, I believe that both technology and accountability have their place in any effort to solve the postsecondary conundrum.

In the case of new technological tools to expand teaching productivity, we need to carefully study their effect on student learning, institutional stability, educational quality, and cost. It’s going to take some tinkering to build new models of technology-supported teaching that work as well as or better than a traditional classroom education, and we should not hesitate either to try promising approaches or to abandon those that fail to make the grade.

When it comes to imposing stronger accountability, we need comprehensive data systems and other ways to gather information that will give us a clearer, more scientifically sound picture of institutional performance than do the rough measures we use now, such as completion rates. Furthermore, measures of quality should never be the only criteria through which we reward or punish postsecondary institutions, not only because expanding access must remain a priority, but also because it is extremely unlikely that we will ever be able to capture all of postsecondary education’s beneficial outcomes through large-scale data. 

In the end, however, technology and accountability alone will not solve the postsecondary conundrum. As tuition costs rise, parents and prospective students are starting to question the value of the postsecondary institutions they’re considering, seeking better information about quality and completion rates, and making decisions based on hard financial realities. This kind of pressure from prospective students and their families is likely to be the most effective incentive of all.

Higher Education

Governance Studies

Brown Center on Education Policy

Lydia Wilbard

August 29, 2024

Zachary Billot, Annie Vong, Nicole Dias Del Valle, Emily Markovich Morris

August 26, 2024

Brian A. Jacob, Cristina Stanojevich

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529 Qualified Expenses: What Can You Use 529 Money for?

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By Martha Kortiak Mert

July 27, 2023

A 529 plan is a powerful tool that parents and family members can use to save for a child’s education. Contributing to a 529 plan offers tax advantages when the money in the account is used for qualified education expenses. However, there are many 529 plan rules, specifically for 529 qualified expenses. 

What are 529 eligible expenses, and how do you ensure you abide by 529 account rules? Today, we’ll cover an updated list of qualified education expenses, examples of non -qualified expenses , and what to do if you spend funds on a non-qualified expense. 

Let’s get started!

What you can pay for with a 529 plan

First off, let’s dive into the qualified expenses of a 529 plan.

Money invested in a 529 college savings plan grows tax-deferred, and qualified distributions are tax-free. Families may also be eligible for a state income tax deduction or credit for 529 plan contributions, depending on where they live (more on that in a minute, though).

Qualified higher education expenses include costs required for the enrollment or attendance at a college, university or other eligible post-secondary educational institution . The definition of qualified higher education expenses (for 529 plan purposes) also includes up to $10,000 per year in tuition for K-12 schools and up to $10,000 in student loan repayments.

Here is a list of common educational expenses and their qualification status:

It’s worth noting the rules for some of these expenses are a bit more complicated than others. 

Let’s break down each expense.

529 Qualified Expenses

These expenses are usually considered qualified education expenses for 529 plan funds, with a few exceptions. 

Tuition and fees

The funds you accumulate in a 529 plan can be used to pay the full amount of your tuition and fees for:

  • College 
  • Vocational and trade school
  • Public, private, or parochial elementary and secondary school

Attendance does not necessarily need to be physical. You can also use a 529 plan to pay for online college courses. 

As long as the college you’re enrolling in is an eligible institution (which means that the institution is eligible for Title IV federal student aid), you can use a 529 plan to pay for online tuition and fees .

But a 529 plan isn’t limited to just college or trade school tuition fees. 

Thanks to the Tax Cuts and Jobs Act of 2017, families can also use a 529 plan to pay for up to $10,000 worth of tuition expenses per year at an elementary or secondary school. This includes public, private, and parochial schools.

Books and supplies

If books and supplies are required to participate in a class, the full cost of those books and supplies is considered a qualified expense. This may include course textbooks, lab materials, safety equipment, or anything else mandatory for your coursework.

By contrast, you can’t claim books and supplies that aren’t required. 

For example, let’s say you’re taking a marine biology class, and you decide you’d like to do some additional reading on whales. Unfortunately, if the extra books you’d like to buy aren’t on the class reading list, you won’t be able to use a 529 plan to pay for them.

Computers, software, and internet access

You can use your 529 plan to purchase a computer, “peripheral equipment” (like a mouse or speakers), computer software, or internet access. 

According to the Internal Revenue Service (IRS), computers and internet access count as a qualified education expense as long as the beneficiary primarily uses that hardware (or internet access) while enrolled in an eligible institution.

It’s important to note the IRS specifically states computer software that has nothing to do with your studies doesn’t count as a qualified expense. That means computer games, sports software, or any apps related to a hobby can’t be paid for using a 529 plan. 

Room and board

You can use a 529 plan to pay for qualified room and board expenses like rent, other housing costs, and meal plans. This applies to on-campus and off-campus room and board as long as you incurred the costs while the beneficiary was enrolled at school. 

That being said, there are a couple of extra rules you’ve got to remember.

First, you can use a 529 plan to pay for off-campus and non university-managed accommodation as long as the beneficiary is enrolled in an eligible college program on at least a half-time basis. That student must also be studying towards a degree, certificate, or another recognized credential.

Additionally, off-campus students are limited to the allowance reported by the college in its “cost of attendance” figures. Any amount above the allowance is considered a non-qualified 529 plan expense. 

Studying abroad? Room and board costs incurred for abroad programs count as long as it’s approved for credit by your home college or university. 

Rent incurred during the summer months is also considered qualified when the student is enrolled at least half-time.

Keep in mind that you can’t use prepaid tuition plans like the Private College 529 Plan to pay for room and board.

That means if your family is using a prepaid tuition plan, you might want to think about setting up a 529 college savings plan so that you can save for extra expenses like room and board.

Special needs equipment

Special needs equipment refers to services necessary for students with disabilities or other special needs to attend college or university. If you genuinely require special needs equipment to enroll and participate in a course at an eligible institution, you can meet these costs with your 529 plan.

Families with special needs may also consider using a 529 ABLE account to save for college and other education expenses.

Student loans 

529 plans don’t have any time limits. If you have leftover money in your 529 college savings plan after you graduate, you can use that money to pay off all or part of your student loan debt.

This change was introduced as part of the 2019 SECURE Act , which applies to all 529 plan distributions made after December 31, 2018.

But again, there’s a caveat: the law only allows you to pay off a lifetime limit of $10,000 in qualified student loan repayments using your 529 plan. If you owe more than $10,000 in student loans, you can only use your 529 plan to pay for that first $10,000.

529 non-qualified expenses

The next set of expenses are usually considered non-qualified , except under certain circumstances. 

Transportation and travel costs

Transportation and travel costs like gas and transit passes are generally not considered qualified 529 plan expenses.

You cannot use a 529 plan to buy or rent a car, maintain a vehicle, or pay for other travel costs. If you use a 529 distribution to pay for this type of expense, those distributions are considered non-qualified. 

An exception to this rule may be if your college charges a travel or transportation cost as part of a comprehensive tuition fee, or if that fee is identified as being required for enrollment or attendance.

Health insurance

Your college might require students to have health insurance, but you can’t use a 529 to pay for health insurance . If your college requires it, you’ll typically get a waiver on that requirement if you’re covered under your parent’s health insurance plan.

Again, there is an exception to this rule. If your institution charges health insurance as part of a comprehensive tuition fee (or the fee is required for enrollment or attendance), the cost of your health insurance may count as a qualified 529 plan expense.

College application and testing fees

Any costs incurred before a student’s admission to a college or university, such as college application and testing fees , are not considered qualified expenses. 

Although these costs are required for admission, they are not required for enrollment or attendance.

If 529 plan funds are used to pay for any pre-enrollment fees, it will be considered a non-qualified distribution .

How to calculate 529 plan qualified expenses

The maximum amount you can withdraw tax-free from a 529 plan is the total amount of higher education expenses paid during the year, minus any amount used to generate other federal tax benefits.

Parents who use 529 plans to pay for college may be eligible for additional tax savings with the American Opportunity Tax Credit (AOTC) or Lifetime Learning Tax Credit (LLTC). However, these federal education tax credits are only available for families who meet income requirements.

The AOTC offers a 100% credit for the first $2,000 used to pay for education expenses and 25% for the next $2,000 used, for a maximum credit of $2,500 if you spend $4,000 on qualified expenses.

Money in a 529 plan can only be withdrawn tax-free when used for qualified expenses not covered by payments that generated the AOTC. So, in this scenario, the taxpayer would subtract $4,000 from the qualified educational expenses they paid when determining how much they should withdraw from their 529 plan.

The credit does phase out at higher incomes, so some families may get a smaller credit or not be eligible at all. An accountant or tax advisor may be able to provide more guidance on your specific situation.

For an expense to be qualified, you must withdraw money from the 529 plan in the year you incurred the expense. You can’t incur an expense in one year and withdraw from the 529 plan in a different year.

What Happens if the Account Beneficiary Doesn’t Go to College?

If you open a 529 plan for someone who decides not to go to college, you have a few options.

One is to simply take the money out and use it for non-educational expenses. However, you’ll incur penalties (more on those later). 

Another option is to change the beneficiary of the account. For example, a parent with two children could change the account beneficiary to their other child and use the money for their benefit.

Changing the beneficiary won’t have any tax implications as long as the new beneficiary is a family member of the account owner, the owner themselves, or a grandchild. Most 529 plans allow beneficiary changes at any time by completing a form found on their website.

Passage of the SECURE 2.0 act in 2022 is creating a new option for 529 account holders. Starting in 2024, leftover funds in a 529 plan can be rolled over tax and penalty-free to a Roth IRA in the beneficiary’s name. There are several limitations to be aware of, including a cap on the total amount that can be rolled over and annual contribution limits.

Other options include paying off student loans or saving the money for graduate school down the line.

What Happens if You Use a 529 Plan for Non-Qualified Expenses?

You can withdraw funds from your 529 plan at any time, for any reason, but don’t forget: if you withdraw money for non-qualified expenses , you will incur income taxes on the earnings portion of the distribution. You also have to pay an additional 10% penalty on those earnings.

States can also impose additional penalties. 

For example, California adds a 2.5% tax penalty to the 10% federal tax penalty. States that offer state income tax deductions for 529 plan contributions may also make you pay the taxes you would have owed if you didn’t receive those deductions.

However, there are exceptions to the penalty rules . For example, you may be able to take money from the account for non-qualified expenses if you’re attending a military academy, earn a qualifying scholarship, or receive educational tax credits.

For more information on exceptions to the penalty rules, consult our guide .

How Long Can You Leave Money in a 529 Plan?

Some tax-advantaged accounts have rules about how long money can stay in the account. One of the best-known examples of this is the Required Minimum Distribution (RMD) rule for 401(k)s and IRAs. It’s natural to wonder if 529 plans have similar rules.

The good news for savers is that 529 plans don’t limit how long money can remain in the account. The only rule is that the account must have a living beneficiary. You can open a 529 plan for a child and keep money in the account until they’re 80 years old or older.

529 plans play an important role in your college savings plan, but you’ll make the most of them if you understand 529 qualified expenses and how to prove them.

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post secondary education costs

MSU Extension

Funding the costs of post-secondary education.

Janice Zerbe <[email protected]> , Michigan State University Extension - September 12, 2016

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There are options families can explore to fund post-secondary education while minimizing debt.

As many young adults can tell you, there are many costs associated with attending any type of post-secondary education. The tuition alone can be tremendous. According to “ Back to school report: Rising tuition and weak state funding and financial aid create more student debt ,” a recent report by the Michigan League for Public Policy , Michigan has the sixth highest tuition in the United States. Michigan’s economy and job market continue to demand well-educated workers, yet many students are unable to afford a college degree altogether and many more are incurring a mountain of debt to pursue one.

Youth need to start thinking at a very young age how they might pay for their post-secondary education. There are parents that plan to pay for post-secondary education, but have found they have not been able to put enough money aside to cover the entire cost. According to the report mentioned above, 62 percent of Michigan college students gradated with debt in 2014; their average was nearly $30,000. The cost of attending a post-secondary institution continues to rise.

There are many ways to fund the costs associated with obtaining a post-secondary education. Youth and their families should investigate federal student aid programs and scholarships, as well as saving plans. Learning about financial aid options benefits youth planning to attend some type of post-secondary education. Careful research can help a young person and their family figure out a way for youth to achieve a post-secondary education.

“ Build Your Future: Choices, Connections, Careers ,” a National 4-H curriculum written by Michigan State University Extension 4-H staff members, has a lesson devoted to funding a post-secondary education. In addition, you can visit the MSU Office of Financial Aid website.

This article was published by Michigan State University Extension . For more information, visit https://extension.msu.edu . To have a digest of information delivered straight to your email inbox, visit https://extension.msu.edu/newsletters . To contact an expert in your area, visit https://extension.msu.edu/experts , or call 888-MSUE4MI (888-678-3464).

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50-State Comparison: Postsecondary Education Funding

What do state policies say about how to fund postsecondary education?

This 50-State Comparison answers this question by searching state statutes, state rules and regulations, enacted state budget bills and state postsecondary education agency policies that address postsecondary education budgeting and funding.

First, this resource inventories where publicly available state policies exist and provides citations that underpin postsecondary education budgeting and funding in the state.

Next, this comparison examines whether the budget request process is centralized across institutions or groups of institutions within the state.

Finally, according to the content of the publicly available policies, this resource categorizes the funding models in place and identifies a selection of their underlying drivers, including student enrollment, faculty or facilities needs, completion metrics, and workforce development metrics.

While this comparison categorizes and inventories common funding drivers dictated in policy within and across states, it does not provide information about funding levels or the degree to which practice mirrors the policies detailed here. Especially in the context of an economic recession, it may be common for states to use alternative methods to allocate funding to postsecondary education.

Education Commission of the States makes every effort to be as comprehensive as possible in all of its publications, and the nuances of funding policy can be difficult to capture. If you have any questions about the information in this 50-State Comparison, please click here to contact the research team directly.

Click on the metrics below for 50-State Comparisons showing how all states approach these policies. Or view a specific state’s approach by going to the  individual state profiles   page.

50-State Comparisons

  • Policy Citations: Does state statute, state rule or regulation, state agency policy, an enacted budget bill, or other publicly available policy document guide the postsecondary education funding process?
  • Budget Request Process: Do individual institutions request funding from the legislature, is a consolidated budget request process required, or is another process in place?
  • Funding Model: Which method(s) — a base model, a base plus, a formula or another method — is/are used for funding postsecondary education?
  • Enrollment: Does the state’s funding model require an enrollment metric, provide an option to include an enrollment metric, or not address enrollment at all?
  • Faculty, Facilities and Student Support Services: Does the state’s funding model require a metric related to faculty, facilities or student support services; provide an option to include a metric related to faculty, facilities or student support services; or not address faculty, facilities or student support services at all?
  • Course or Program Completion Metrics: Does the state’s funding model require a metric related to course or program completion, provide an option to include a metric related to course or program completion, or not address course or program completion at all?
  • Workforce Development or Transfer: Does the state’s funding model require a metric related to workforce participation or transfer, provide an option to include a metric related to workforce participation or transfer, or not address workforce participation or transfer at all?

Key Takeaways

  • Forty-five states and the District of Columbia have an adopted state statute that addresses postsecondary education budgeting processes or funding models for at least one institution or sector.
  • Thirty states account for student enrollment in their funding model for at least one institution or sector. An additional three states provide an option to include an enrollment metric in the model.
  • Sixteen states account for postsecondary education facilities and/or faculty or staff salaries within their funding model for at least one institution or sector.
  • Twenty-nine states account for course or program completion metrics within their funding model for at least one institution or sector. An additional three states provide an option to include course or program completion metrics.
  • Sixteen states account for workforce development or transfer metrics within their funding model for at least one institution or sector. An additional four states provide an option to include workforce development or transfer metrics.

Related Resources

  • 50-State Comparison: Postsecondary Governance Structures
  • 50-State Comparison: K-12 Funding

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The Cost and Return Investment of Post-secondary Education

See how much it costs to complete a post-secondary program, consider how much debt is left after graduation and see the long-term payoff in lifetime earnings.

An analysis in 2024 by the Ministry of Post-Secondary Education and Future Skills shows that graduates of post-secondary programs earn a higher income over a working lifetime than they would make with a high school diploma.

  • Summary of Lifetime Earnings (PDF)  

Tuition Fees

Camosun College $3,697 $3,771 2.0%
Coast Mountain College $3,024 $3,085 2.0%
College of New Caledonia $2,944 $3,003 2.0%
College of the Rockies $2,975 $3,035 2.0%
Douglas College $3,365 $3,431 2.0%
Langara College $3,165 $3,229 2.0%
North Island College $3,206 $3,269 2.0%
Northern Lights College $3,511 $3,581 2.0%
Okanagan College $3,690 $3,764 2.0%
Selkirk College $3,077 $3,136 1.9%
Vancouver Community College $2,902 $2,960 2.0%
British Columbia Institute of Technology $5,681 $5,795 2.0%
Justice Institute of British Columbia $5,523 $5,633 2.0%
Nicola Valley Institute of Technology $2,783 $2,839 2.0%
Capilano University $4,230 $4,315 2.0%
Emily Carr University of Art and Design $4,352 $4,439 2.0%
Kwantlen Polytechnic University $4,604 $4,696 2.0%
Royal Roads University $7,789 $7,945 2.0%
Thompson Rivers University $4,576 $4,668 2.0%
University of the Fraser Valley $4,710 $4,804 2.0%
Vancouver Island University $4,798 $4,894 2.0%
Simon Fraser University $6,114 $6,236 2.0%
University of British Columbia $5,729 $5,843 2.0%
University of Northern British Columbia $5,756 $5,872 2.0%
University of Victoria $6,045 $6,166 2.0%
  • Simple averages for the year-over-year and the cumulative percent change columns are calculated by averaging the percent change of each institution within a sector or sector grouping (i.e. college sector, TIU & RIU).
  • Weighted averages for tuition are derived by using institution size (i.e. student Full-Time Equivalents, or FTEs) to provide an average that more accurately reflects the average amounts paid. The current year uses the Funded FTEs; all prior years are restated annually using Actual FTEs.
  • Tuition for British Columbia Institute of Technology (BCIT) is derived from the full-time Technology program. In 2021/22, BCIT revised the methodology for full-time Technology from a simple average to a weighted average using average headcount of sampled programs in three technology tuition bands.
  • Tuition for Justice Institute of British Columbia is derived from a Bachelor of Emergency and Security Management Studies.
  • Tuition for Royal Roads University is derived from a Bachelor of Science in Environmental Science.

Mandatory Fees

Camosun College $96 $756 $852
Coast Mountain College $236 $368 $604
College of New Caledonia $242 $532 $774
College of the Rockies $711 $387 $1,098
Douglas College $75 $779 $854
Langara College $185 $947 $1,132
North Island College $276 $438 $714
Northern Lights College $209 $40 $249
Okanagan College $407 $413 $821
Selkirk College $541 $444 $986
Vancouver Community College $203 $676 $880
British Columbia Institute of Technology $225 $1,214 $1,439
Justice Institute of British Columbia $189 $408 $596
Nicola Valley Institute of Technology $60 $756 $816
Capilano University $557 $1,259 $1,817
Emily Carr University of Art and Design $311 $830 $1,140
Kwantlen Polytechnic University $329 $1,003 $1,331
Royal Roads University $513 $775 $1,288
Thompson Rivers University $781 $1,397 $2,178
University of the Fraser Valley $576 $527 $1,104
Vancouver Island University $408 $478 $886
Simon Fraser University $272 $1,161 $1,433
University of British Columbia $245 $997 $1,242
University of Northern British Columbia $513 $609 $1,122
University of Victoria $192 $713 $905

Notes: 

  • Fees payable to the institution include registration fees, technology and laboratory fees, library fees, learning resource fees, ancillary fees, athletic and recreation fees, etc. Fees payable to the institution have been subject to the 2% Tuition Limit Policy since 2007. 
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Universities offer programs on a wide range of topics at different levels of difficulty and complexity. When you successfully complete a university program, you’re awarded with a university degree that reflects the type of program you completed. There are 3 types of degrees.

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  • Doctoral degree : This is the most advanced degree offered by Canadian universities. It can take another 3 to 4 more years of study and research following a master’s degree.

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All post-secondary schools charge tuition fees for their programs. For Canadian citizens and permanent residents, tuition fees are between $2,500 and $11,400 a year, depending on the school and program you’ve chosen. Tuition fees can be much higher for international students.

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A  Registered Education Savings Plan (RESP) is a tax-free education savings account that lets parents, family members and friends save money for a child’s post-secondary education.

When you open an RESP account, the Government of Canada will help you save by adding money to your RESP through special programs. This encourages people to save more money for their child’s education.

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Many post-secondary schools offer part-time programs and distance education . These programs can help you get an education if you have limited time or can’t attend the school in person.

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Ministries of post-secondary education

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How Much Does Special Education Truly Cost? Finally, an Answer Is on the Horizon

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How much do America’s schools spend to provide special education services to students with disabilities? How have special education costs nationwide risen over the last two decades? What is the typical cost of providing services to a K-12 student who has autism, or ADHD, or Down syndrome?

The answer to all of these questions is painfully simple: We don’t know.

Educators, policymakers, and researchers can make educated guesses. Some states collect data from school districts on special education spending. Some researchers have an inkling about the trajectory of special education costs so far during the 21st century, particularly as the proportion of America’s students receiving special education services has trended upward.

But the last detailed, nationwide study of special education spending, which can vary widely from state to state and district to district, was conducted 25 years ago.

That will begin to change in the coming years, though. Scholars who work for the U.S. Department of Education’s Institute for Education Sciences (IES) and the American Institutes for Research (AIR) are preparing to execute a pilot study that will lay the groundwork for a nationwide examination of the billions of dollars spent annually on special education.

This $5.2 million effort is a sequel of sorts to the Special Education Expenditure Project (SEEP), which was conducted during the 1999-2000 school year and published a few years later.

That project found that special education services cost $50 billion, or $8,080 per pupil requiring special education services during the 1999-2000 school year, working out to 21 percent of overall spending on public schools that year. Those numbers have undoubtedly changed, and almost certainly grown, since then.

“Someone I spoke to at an advocacy organization said [SEEP] is the oldest data she routinely cites,” said Claire Allen-Platt, a research scientist for the National Center for Education Evaluation and Regional Assistance, within the Institute for Education Sciences, who’s serving as project officer for the new study. “So much has changed since then that we think it’s important to update.”

New study will build on decades-old findings

Allen-Platt and her teammates hope the finalized National Study of Special Education Spending will provide lawmakers with crucial context they’ll need during a potential reauthorization process for the Individuals with Disabilities Education Act , the federal law that enshrines students’ rights to special education.

When Congress passed that law in 1975, it committed to providing funding for all special education students equivalent to 40 percent of the nationwide average per-pupil cost of K-12 education. But as far as researchers and advocates can tell, the government has never come close to fulfilling that commitment, leaving states and local school districts to make up the difference , sometimes at the expense of other priorities.

Illustration of a desk with a calculator and budget sheet.

If lawmakers know for certain that funding lags far behind the actual special education costs schools regularly incur, they may be more inclined to prioritize a substantial funding increase, researchers said.

But that’s not all researchers hope publication of the study will accomplish. They’re developing methods that build on the previous study and aim to provide more tools for gauging whether spending is equitable for groups of students with different needs. States and districts will be able to use those methods to conduct their own studies going forward.

Those tools promise to be especially useful in light of the current challenges districts face related to special education: a growing number of students eligible for services , a persistent shortage of educators qualified to provide those services, and a perfect storm of broader budgetary pressures that are forcing districts to make painful cuts, including to special education .

The gaps researchers are aiming to fill are substantial. The U.S. Government Accountability Office, a federal watchdog agency, published a report in June highlighting that the federal government isn’t collecting enough data on special education enrollment, spending, and staffing. Without more detailed data, the U.S. Department of Education struggles to fulfill its congressionally mandated role of ensuring that students with disabilities are receiving adequate services.

The new study will use a nationally representative sample of roughly 1,200 school districts and 15,000 students during the 2025-26 school year. Results are set to publish in 2028.

“It’s not just about building a dataset. It’s about building the capacity in the field to do this work in a thoughtful and rigorous way going forward,” said Tammy Kolbe, a principal researcher at AIR, who’s a principal investigator designing the forthcoming special education spending study. “The field desperately needs those tools.”

A growing number of students qualify for special education

More than 7.5 million American children received special education services from public schools during the 2022-23 school year, the most recent one for which federal data are available. That’s roughly 15 percent of all students in public K-12 schools.

Because the federal government requires that districts provide an adequate education to all students regardless of their disability, special education services for students with disabilities often add significant costs to the already-expensive business of educating children.

Districts invest in staff members who are trained and certified to work one-on-one or in small groups with students with disabilities; equipment and facilities that provide an appropriate learning environment for students who might struggle in a traditional classroom; and tuition and transportation fees so students can receive services from outside providers.

Some recently published numbers from Pennsylvania offer a vivid picture of the varied costs. More than 378,000 students received special education services during the 2022-23 school year—19 percent of all public and public charter school students in the state.

For roughly 43,000 of those students, districts spent more than $82,000 per pupil, according to the state education department . For another 33,000 students with disabilities, districts spent less: $27,000 to $82,000 per pupil.

The average cost to educate a K-12 student with or without disabilities in Pennsylvania during the same school year was just shy of $22,000 .

Those numbers don’t tell the full story, though. A portion of the education costs for children receiving special-education services was for general expenses that districts also incurred for students without disabilities, or “general education students”—salaries and benefits for teachers, custodians, bus drivers, and other staff; utility bills to keep buildings lit and ventilated; and textbooks and other technology tools all students need to learn.

The trend in special education since the last nationwide spending study has been to put students in the “least restrictive environment” where they can learn. That means keeping students with disabilities in traditional classrooms as often as possible .

During recess at Ruby Bridges Elementary School in Woodinville, Wash., students have cards with objects and words on them so that all students, including those who cannot speak, can communicate. Pictured here on April 2, 2024.

As a result, the costs of special education that go above and beyond what districts spend on students without disabilities have become murkier than ever. Researchers are aiming for the new study to shed some light on that issue, which didn’t get much attention in the previous iteration of the study.

“We can’t just look at what’s spent on special ed. That is only a small share of what’s spent on a student with a disability. And what’s spent on general ed. is not all for gen. ed. students,” said Marsha Silverberg, associate commissioner of the evaluation division of the National Center for Education Evaluation and Regional Assistance.

Researchers want to dive deeper into special education spending inequities

The success of the study, in the early stages, will depend in part on the willingness of states and school districts to offer data and make key people available to offer their perspectives, researchers said.

Once it’s out, though, researchers expect state policymakers may use findings to inform their own calculations for how much additional funding they should provide for special education, including in funding formulas that give additional weight to students with disabilities.

The study will also drill down more precisely on variations in special education spending: for instance, between students with disabilities and those without; and between districts in rural areas and districts in big cities.

The SEEP study in the early 2000s compared students with disabilities to a generalized average child with no disabilities.

This time, the nationally representative sample will include students with and without disabilities from the same school.

Researchers will interview teachers and other providers of services to gain a more complete picture of what students experience and how those experiences tie to expenses.

Teacher helping adult special-needs student with computer.

Joseph Kwisz serves as executive director of Old National Trail Special Services, a cooperative organization that coordinates special education services for five rural Indiana school districts.

Those districts collectively enroll 1,500 students with disabilities—close to 25 percent of the overall student population. Kwisz hopes the study will shed light on how districts can most effectively spend the limited funds they have left over once they devote the bulk of special education spending to compensating staff.

“We have this very perplexing model where our needs are increasing and our funds are decreasing” because of the insufficient federal investment, Kwisz said. “There are a lot of days where we have to rob Peter to pay Paul.”

The answer may look much different in his context than in an urban district. Students in the districts he serves live in small towns with few job opportunities. Workforce transition programs that might be a boon for students with disabilities in big cities would be of no value where he lives.

“If there were simple black-and-white answers to our challenges, we would have simple black-and-white solutions,” Kwisz said.

States and districts need more clarity, too

Merely updating the findings after more than two decades will be a major step forward.

Kevin Rubenstein, president of the nationwide Council of Administrators of Special Education, helped in the late 2010s with a broad reworking of Illinois’ funding formula for K-12 education.

The team used national models to approximate how much it should cost to provide, for instance, an adequate number of school psychologists, or sufficient resources for English learners. But making the estimate for special education was especially tricky, Rubenstein said, because the most complete national model already was years out of date.

The updated formula compared the estimates of necessary costs with districts’ expenditures to determine how much more money each district would need to offer adequate services to all students. But the special education section didn’t capture all the nuances—for instance, it didn’t account for students attending private schools or therapeutic day schools on the district’s dime.

States and school districts often clash over their relative share of the cost burden for special education. Minnesota school district leaders and Gov. Tim Walz, now the Democratic nominee for vice president, haggled last year over how much the state would spend on the “cross-subsidy"—the state’s share for special education services. They eventually landed on a model that raises the state’s obligation from 6 percent to 50 percent in a few years.

men and women entering and exiting open doorways on an isolated blue background

In Vermont, three districts are suing the state education department alleging that it’s illegally withholding reimbursement for special education services; the state has said it wasn’t responsible for covering the particular expenses at issue.

Some of these debates happen without a clear understanding of how much special education costs as a whole. The new study may provide a more solid foundation for understanding how special education spending could and should look, said Rubenstein, now the assistant superintendent for student services in the Elmhurst, Ill., district.

“School districts are in a position where they need to make decisions about spending,” he said. “To be able to have a good conversation about that, you need to understand how much you should be spending in comparison to how much you are actually spending.”

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Request for Information on Identifying and Tracking Data Related to Early Childhood Education Providers

A Notice by the Education Department on 06/20/2024

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  • Document Details Published Content - Document Details Agency Department of Education Agency/Docket Number Docket ID ED-2024-OPE-0072 Document Citation 89 FR 51878 Document Number 2024-13446 Document Type Notice Pages 51878-51880 (3 pages) Publication Date 06/20/2024 Published Content - Document Details
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Docket Title Document ID Comments
Request for Information on For-Profit Early Childhood Education Providers 285

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Request for Information on For-Profit Early Childhood Education Providers

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Department of Education

  • [Docket ID ED-2024-OPE-0072]

Office of Postsecondary Education, Department of Education.

Request for information.

This notice is a request for information in the form of written comments that include information, research, and suggestions regarding operational aspects of the possible inclusion of for-profit early childhood education providers as eligible employers for the purpose of Public Service Loan Forgiveness.

We must receive your comments by July 22, 2024.

Comments must be submitted via the Federal eRulemaking Portal at regulations.gov. However, if you require an accommodation or cannot otherwise submit your comments via regulations.gov, please ( print page 51879) contact the program contact person listed under FOR FURTHER INFORMATION CONTACT . The Department will not accept comments by email or by fax. To ensure that the Department does not receive duplicate copies, please submit your comments only once. Additionally, please include the Docket ID at the top of your comments.

Federal eRulemaking Portal: Go to www.regulations.gov to submit your comments electronically. Information on using Regulations.gov, including instructions for accessing agency documents, submitting comments, and viewing the docket, is available on the site under the “FAQ” tab.

Privacy Note: The Department's policy for comments received from members of the public is to make these submissions available for public viewing in their entirety on the Federal eRulemaking Portal at www.regulations.gov . Therefore, commenters should be careful to include in their comments only information that they wish to make publicly available. We encourage, but do not require, that each respondent include their name, title, institution or affiliation, and the name, title, mailing and email addresses, and telephone number of a contact person for the institution or affiliation, if any.

Greg Marak. Telephone: (202) 401-6250. You may also email your questions to [email protected] , but as described above, comments must be submitted via the Federal eRulemaking Portal at regulations.gov.

If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.

Background:

Congress created the Public Service Loan Forgiveness (PSLF) Program in 2007 as part of the College Cost Reduction and Access Act, Public Law 110-84 , to encourage individuals to enter into and remain employed in public service professions. The program alleviates financial burdens associated with Federal Direct Loans for borrowers working for certain public service providers by forgiving all remaining loan balances following 10 years of public service while the borrower makes qualifying student loan payments. Since its creation in 2007, PSLF has been available to borrowers working for government at all levels, non-profit organizations that are tax-exempt under section 501(c)(3) of the Internal Revenue Code, and other non-profits that provide at least one of the specific services listed in the statute. This includes early care educators who work in the public sector or for non-profit organizations.

A significant share of early care educators, however, are not considered public sector or non-profit employees and current regulations do not provide a pathway for their eligibility for PSLF. Data from the National Survey of Early Care and Education, conducted by the Department of Health and Human Service's Office of Planning, Research, and Evaluation, estimates that extending PSLF eligibility to early childhood education (ECE) workers regardless of the tax status of their employer would allow more than 450,000 additional ECE workers to earn credit toward PSLF—about 68,000 who work in home-based settings and 390,000 who work in center-based settings—if they have student loans. [ 1 ] This reflects roughly one-third of the overall ECE workforce.

On July 13, 2022, the Department published a notice of proposed rulemaking (NPRM) in the Federal Register ( 87 FR 41878 ). [ 2 ] In the NPRM, the Department proposed improvements to PSLF that reduce regulatory and administrative barriers that have historically made it more difficult for borrowers to make progress toward forgiveness under PSLF. This included simplifying criteria to help borrowers certify employment, helping borrowers earn progress toward PSLF for months that did not count before, and providing borrowers with more opportunities to correct problems with PSLF.

Additionally, in the NPRM, the Department asked directed questions about the possibility of allowing ECE providers who are private for-profit businesses to be considered eligible employers for the purposes of PSLF. In response, the Department received many detailed comments about early childhood education as well as a range of comments in support of making other for-profit employers eligible to serve as qualifying employers for PSLF for individuals in certain occupations.

On November 1, 2022, the Secretary published final regulations  [ 3 ] in the Federal Register . Those final regulations did not include regulations regarding whether, and under what circumstances, private for-profit ECE providers employing borrowers working as early childhood educators, should be treated as qualifying employers for PSLF. [ 4 ]

Solicitation of Comments:

Early care educators are among the lowest-paid workers in the country; and the Administration has committed through Executive Order 14095 , to better supporting the care workforce. [ 5 ] The E.O. states that investments in the care workforce are foundational to helping to retain care workers and improving health and educational outcomes for those in their care. The purpose of this Request for Information (RFI) is to gather information about ECE providers. This RFI and the comments received in response to this RFI will not be considered as part the Affordability and Student Loans proposed rule ( 87 FR 41878 ) and any subsequent related final rules. The comments received in response to this RFI will not be used as part of the rulemaking related to the treatment of for-profit employers, including ECE providers, and eligibility for PSLF. Instead, the feedback from this RFI will help inform the Department's understanding of different approaches that might be considered when implementing non-rulemaking solutions related to this issue.

Given the operational and implementation hurdles associated with PSLF, the Department is interested in understanding whether there are ways that eligibility could be streamlined if all ECEs became eligible. The Department is soliciting information and data from the public on how the Department could determine employer eligibility and related considerations if for-profit ECE employers were to be considered eligible employers if they provided one of the services listed in the statute. The Department encourages ( print page 51880) comments from researchers, academics, policy experts, and other individuals familiar with ECE employer data; organizations that work directly with ECE workers; State and Tribal government officials who oversee and administer ECE programs; ECE practitioners; and other members of the public. The Department will review all comments received, but does not intend to respond to comments.

The Department seeks feedback on the following questions:

(1) The Department has always relied upon employer identification numbers (EINs) to identify whether an employer is a non-profit under IRC 501(c)(3). This approach has allowed the Department to create a comprehensive list of eligible employers and use a consistent identifier system. However, some for-profit businesses may be sole proprietors or other providers that do not have an EIN. Are there other uniform sources that the Department might consider using for determinations of qualifying employers?

(2) If there are not other uniform sources, how should the Department address eligibility determinations of a for-profit ECE employer?

(3) If in consultation with the Department, the U.S. Department of Health & Human Services (HHS), issued a voluntary Public Records Act request from the States to create a nationwide registry of EINs of ECE providers, are State and Tribal agencies that oversee and administer ECE programs in a position to collect this information? Do commenters believe that all States would provide this information? Are there any additional considerations the Department should be aware of should HHS issue this request?

(4) What feedback can be provided concerning the time it would take a State or Tribe to undertake the collection of EINs for licensed and regulated providers, including the process, privacy, administrative, or other considerations that the Department should take into account?

(5) Should the Department consider a process that relies on unique identifiers associated with licensure as opposed to EINs to identify eligible employers?

This is a request for information only. This RFI is not a request for proposals and does not commit the Department to take any future administrative, contractual, regulatory, or other action. The Department will not pay for any information or costs that you may incur in responding to this RFI. Any documents and information submitted in response to this RFI become the property of the U.S. Government and will not be returned.

Accessible Format: By request to the program contact person listed under FOR FURTHER INFORMATION CONTACT , individuals with disabilities can obtain this document in an accessible format. The Department will provide the requestor with an accessible format that may include Rich Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, braille, large print, audiotape, or compact disc, or other accessible format.

Electronic Access to this Document: The official version of this document is the document published in the Federal Register . You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov . At this site you can view this document, as well as all other documents of this Department published in the Federal Register , in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at www.federalregister.gov . Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

Nasser Paydar,

Assistant Secretary, Office of Postsecondary Education.

1.  These estimates are from the Administration for Children and Families' National Survey of Early Care and Education, both the 2019 Home-Based NSECE chartbook and the 2019 Center-Based NSECE chartbook. These data show that approximately three-fourths of home-based providers had at least some college, and 72 percent of for-profit ECE workers had some college or higher.

2.   https://www.federalregister.gov/​documents/​2022/​07/​13/​2022-14631/​student-assistance-general-provisions-federal-perkins-loan-program-federal-family-education-loan .

3.   https://www.federalregister.gov/​documents/​2022/​11/​01/​2022-23447/​institutional-eligibility-under-the-higher-education-act-of-1965-as-amended-student-assistance .

4.  Section 103(8) of the Higher Education Act contains a definition of ”early childhood education program” that includes public preschool, Head Start, and State licensed and regulated child care programs. It does not speak to the tax-status of providers. Unlike the public Kindergarten through 12th grade system, which provides free access to education for all age-eligible children and youth, there is no parallel system for our country's youngest children. As a result, ECE is delivered through a system of mixed delivery that includes public programs, non-profit settings, and for-profit settings. https://www.acf.hhs.gov/​ecd/​policy-guidance/​dear-colleague-letter-mixed-delivery . The vast majority of ECE settings are home-based, and do not carry non-profit tax designations. Compensation across settings is low generally, regardless of the tax-status of the ECE provider. https://www.bls.gov/​oes/​current/​oes_​va.htm .

5.   Federal Register : Increasing Access to High-Quality Care and Supporting Caregivers.

[ FR Doc. 2024-13446 Filed 6-18-24; 8:45 am]

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  1. Fast Facts: Tuition costs of colleges and universities (76)

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  2. Fast Facts: Expenditures (75)

    In 2020-21, U.S. 1 degree-granting postsecondary institutions spent $702 billion (in constant 2021-22 dollars). 2 Total expenses were. $14 billion at private for-profit institutions. Overall, total expenses for postsecondary institutions in the United States were 2 percent lower in 2020-21 than in 2019-20 ($702 billion vs. $719 billion).

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  4. COE

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  13. Postsecondary Education Expenses

    Postsecondary Education Expenses Lesson for Grades 8-12. With the rising cost of postsecondary education, it may seem unrealistic to save for all or even some of the costs. The costs of postsecondary education are more than tuition and fees for the courses. Parking, meal plans, dorms, transportation, books, supplies, and other related expenses ...

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  15. PDF Postsecondary Postsecondary Education in the United States

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    The amount depends on your financial need, costs to attend school, status as a full-time or part-time student, and plans to attend school for a full academic year or less. Learn more about Pell grants. To apply, complete the FAFSA. CFDA Number: 84.063 Also Known As: Pell Grants; formerly called Basic Educational Opportunity Grants (BEOGs)

  20. 50-State Comparison: Postsecondary Education Funding

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  24. COE

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  27. Request for Information on Identifying and Tracking Data Related to

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