The Net Price of College Is Falling for Most Students

Title: College Prices Are Falling for Everyone (Almost)

Source: Brookings Institution

Author: Phillip Levine

New research from the Brookings Institution reveals a surprising truth: inflation-adjusted college prices have fallen for most students over the past five years. Phillip Levine’s analysis examines what students actually pay—the net price after financial aid—rather than the sticker prices that dominate media coverage.

Using data from net price calculators at 200 institutions and proprietary financial aid records from 14 highly endowed colleges, his findings challenge the common narrative:

Widespread price decreases: Between 2019-20 and 2024-25, inflation-adjusted net prices declined across institution types. Public flagship universities saw reductions of 7.1-17.3 percent, depending on family income level, while other public institutions experienced decreases of 8.5-13.2 percent. Private colleges with very large endowments had substantial declines, ranging from 7.0-43.4 percent, and tuition-dependent private colleges saw net prices drop by 16.8-23.3 percent.

Lower-income students benefit most: Families earning $40,000 annually, representing the 25th percentile of the income distribution, experienced the largest reductions, with net prices dropping by 13.2-40.9 percent depending on institution type.

Wide price variation by income: At private institutions with very large endowments, students from families earning $40,000 pay approximately $4,400 annually, while those from families earning $240,000 pay $82,800 annually.

At many institutions, families earning $40,000 are still expected to contribute $15,000-$20,000 annually. Only the most heavily endowed institutions typically offer aid packages that lower-income families can reasonably manage. This raises important policy implications: proposed increases to endowment taxes may undermine institutions’ ability to provide generous financial aid, potentially harming the very students who benefit most from their pricing models. Private colleges and universities rely heavily on endowments to fund scholarships, research, and education—often more than they rely on tuition revenue. Treating endowments like business profits could shift the financial burden onto students and weaken U.S. innovation.

The complexity of college pricing creates uncertainty for families, policymakers, and media. Greater transparency about the true cost of attendance is essential. By focusing on actual prices rather than headline-grabbing sticker prices, we can help reshape the national conversation on college affordability and ensure that misconceptions don’t deter qualified students from pursuing higher education.

To read the full Brookings research analysis, click here.

—Alex Zhao