College Prices Aren’t So Bad When Other People Are Paying

Today the College Board – maker of such fine products as the SAT and Advanced Placement exams – released its annual reports on college prices and student aid. College prices, it seems, have gone up significantly over the last year. However, if the following statement from the reports’ author, economist Sandy Baum, is accurate – I haven’t been able to see the reports myself yet – student aid largely offset the price increases. And do you know what that might mean? Colleges were able to charge students more without greatly affecting access by pawning much of the new charges off on donors and taxpayers:

Sandy Baum, the College Board senior policy analyst who wrote both reports, said it was important to focus on the net price students actually paid, after subtracting grants and tax benefits, rather than the published tuition, or sticker price. And in that regard, Ms. Baum said, the situation looks far less dire. “Over all, it could have been worse,” she said.

So could it actually be, as I and others have argued repeatedly, that student aid helps fuel tuition increases by having third parties cover so much of the new costs? Here’s yet more evidence saying that yes, it could.