NPR's Ayesha Rascoe speaks with economist Judith Scott-Clayton about the cost of college in the U.S. They discuss the difference between sticker and net price and the opaqueness of tuition costs.

AYESHA RASCOE, HOST:

College acceptance letters have been rolling out over the past few weeks. And in those letters, the paperwork that makes jaws drop - tuition cost.

WES HODGIN: I hate to be so pessimistic about it. However, it seems like they are going to try to squeeze what they think they can get out of you, plus maybe a little more.

RASCOE: That's Wes Hodgin. He's the parent of a high school senior in Columbia, South Carolina. It's not only the cost of tuition that's squeezing families, and it's not only at pricey private schools. Danielle Newman currently has one college-bound son and another child already in college.

DANIELLE NEWMAN: In state schools, living expenses are more than tuition, which just boggles my mind that the cost of just simply living on a university campus is more expensive than the actual tuition.

RASCOE: The price of a college education has been on the rise for decades. Earlier this month, George Washington University announced it will cost just over $98,000 a year to attend, including room and board. And it's not the only school approaching the $100,000-a-year threshold. Joining us to discuss all this is Judith Scott-Clayton. She's a professor of economics and education at Columbia University's Teachers College. Thanks for being here, Judith.

JUDITH SCOTT-CLAYTON: My pleasure.

RASCOE: Let's start with the state of college tuition right now. Almost $100,000 - how common is a price tag like that across the board?

SCOTT-CLAYTON: So first, I definitely don't want to invalidate the comments that we just heard from those parents on the clips. College is objectively a big expense, no matter how you cut it. However, it's important to note that that $100,000 price tag that gets so much attention in the news is an extremely rare price for students to actually pay. Most families are paying much less than that, and we don't want that scary number to scare off the vast majority of students for whom college is a much more affordable investment.

RASCOE: So for the vast majority of families who may be going to state school or even community college, are those still a good deal? Are they still affordable?

SCOTT-CLAYTON: Affordability is a little bit in the eye of the beholder, but what I will say is that compared to the $100,000 number that you mentioned, most students - about two-thirds - are attending public four-year institutions, and of those, the average tuition fees is about $12,000 a year. If you add in room and board, that brings it up to about 26,000. But most families are not paying that full amount out of pocket. There's also significant sources of state, federal and institutional aid, which, on average, students may be getting 10- or $12,000 a year to lower that cost.

RASCOE: But overall, it is true that college is getting more expensive every year, right?

SCOTT-CLAYTON: It is true that the nominal price of college is basically never going down. However, when we take away just kind of general price increases that apply all across the economy, college costs are actually down over the past five years. Even over the past 10 years, in inflation-adjusted terms, college prices are flat or even down in the public sector. So it's not the case that things are continually getting worse.

RASCOE: But people are saying they're feeling the pinch, so explain what's going on.

SCOTT-CLAYTON: Over, like, a 30-year period from, say, 1990 to 2020, published prices are just steadily going up every year. Then you see a real change around the time of the pandemic, and some of that has had to do with just a softening of demand for college in the post-pandemic period, where they can't afford to raise prices too much because they're competing for enrollments. But even before the pandemic, it was true that states, institutions of federal government were investing more in student aid. So even while the sticker price was going up, student aid was rising at least as fast, if not faster, to kind of bring the net price down over the years right before the pandemic.

RASCOE: The tuition rates that colleges publish are technically the sticker price, as you mentioned. And the parent, Wes Hodgin that we heard from earlier, he had a nice metaphor comparing the cost of a private university.

HODGIN: It's sort of like buying a Dodge. There's this obscene sticker price. There's going to be some negotiation there. Whereas, public universities, typically, it's kind of like buying a Toyota. The sticker price is the sticker price. There's going to be very little aid offered.

RASCOE: What's the difference between the sticker price and the net price?

SCOTT-CLAYTON: Yeah, so the sticker price is sort of what colleges are required to make publicly available on their website. And the net price - and you want to be careful, are we talking about net tuition or net tuition fees, room and board, or the total cost of attendance? There are all these different concepts. But net prices are after taking account of grant aid and not just from the institution, but also grant aid from state governments, from the federal government as well, which can be significant. It is true that the pricing is much more straightforward at public institutions. But just want to emphasize that federal Pell Grants, state aid programs - students can still benefit significantly from financial aid at public institutions. They just may not have as much institutional aid as private institutions have to offer.

RASCOE: That's Judith Scott-Clayton, Professor of economics and education at the Teachers College of Columbia University. Thank you for being here.

SCOTT-CLAYTON: Thank you for having me.

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