View in browser

Price check

Universities and colleges make it confoundingly hard to know what it will cost to attend them — so hard that this causes many of their prospective customers to walk away in frustration. 

Even if they do enroll, students and their families wind up stuck with surprise fees and ploys that strip them of financial aid they thought they had been promised.

While higher education sticks stubbornly to this business model, however, there are ways to find the real price. The trick is knowing where to look.

First, ignore what the website says the college costs. That listed, or “sticker,” price is almost entirely a fiction, part of a strategy devised largely by enrollment management consulting firms. The idea is for colleges to look prestigious by virtue of a high advertised price, then make families feel as if they’re getting a deal by giving them “scholarships” almost everybody gets. 

In fact, on average, private, nonprofit colleges and universities discount their tuition by more than 57 percent for entering students, according to the National Association of College and University Business Officers. At 1,172 colleges, universities and proprietary schools whose students qualify for federal financial aid, not a single person paid the sticker price, a Hechinger analysis of federal data shows.

Yet more than 8 out of 10 families eliminate a college from consideration when they see that often eye-popping listed price, according to a survey by the student lender Sallie Mae. 

American consumers are complicit in this practice, seeming to buy the idea that a lower price means an inferior product. Those few colleges that have reset their tuition to more honestly reflect what people actually pay see almost no long-term increase in enrollment. 

Don’t fall for it. What college really costs is called the net price. To find the net price, by family income, of any university and college — and what a particular family is likely to actually pay, depending on its household income — use The Hechinger Report’s Tuition Tracker.

With Americans becoming more indignant than ever about the cost — and demand declining — research from the Federal Reserve Bank of Richmond finds that colleges have been doing something that’s uncharacteristic for them, but good news for consumers: slowing the pace of annual tuition increases to below the rate of inflation. They’re also deepening those discounts.

None of this means that college is cheap, of course. And for students on residential campuses, the cost of something else has continued to rise much faster than inflation: room and board. At public universities, in-state students now pay more for room and board than for tuition. 

That’s in part because, while many people may think colleges break even on these amenities, they’re increasingly financially dependent on them. Public and private, nonprofit colleges and universities alike now make more money from so-called auxiliary services than from tuition. Not surprisingly, 98 percent of universities and colleges surveyed by the student loan lender ELFI require students to buy meal plans, at least in their first year.

Like hotels and ticket sellers, colleges and universities also nickel and dime their students with endless and often indecipherable fees, from orientation fees to graduation fees, often billed in ways that make them hard to detect or with names such as “special institutional fee” or “academic excellence fee.” There are student activities fees, campus improvement fees, campus spirit fees, bicycle path maintenance fees, ID card fees, safety fees, registration fees, library fees, administrative fees, instructional fees.

Fees, too, have been rising faster than tuition, head of the Department of Educational Leadership and Policy Studies at the University of Tennessee Robert Kelchen has found. Some can be avoided, such as health fees, by showing proof of insurance, and a few are noncompulsory, such as for tickets to athletics events — as long as students opt out by the deadlines.

There’s less that consumers can do about the cost of other fees, and of room and board, besides knowing about and budgeting for them. But there are other steps that can reduce the price of college.

This week's class is sponsored by: 

Applying to college can lead to sticker shock. The good news? Families rarely pay the full cost of attendance. Many colleges discount tuition through grants and scholarships, and private colleges tend to offer more merit aid than public institutions. Keep your student's options open by looking at the net price, what a family actually pays.

Explore a prepaid 529 plan for private college.

Plan ahead

Not only parents but grandparents and other family members can squirrel away savings in a 529 account toward the future cost of higher education; in about 30 states, contributions are tax deductible, and there’s no federal tax on earnings. The money in these plans can now be used to cover not just college — including room, board, books and supplies — but expenses connected to short-term training and apprenticeships.

The downside: Many colleges check out how much parents have saved in 529 accounts when considering how much financial aid to award. That could reduce the amount of discounts students get — a frustrating and often unanticipated penalty for families that planned ahead. But 529 money put aside by grandparents, aunts or uncles isn’t included in that calculation. So financial advisers suggest that parents spend down their 529 savings first (with the added advantage of avoiding loans that immediately start accruing interest), and 529 money from other relatives later.

There are other tax offsets for the cost of higher education. Under the American Opportunity Tax Credit, families of undergraduates who fall within designated income limits can deduct $2,000, plus 25 percent of the next $2,000, that they spend on education. The Lifetime Learning Credit is a $2,000 tax credit on the first $10,000 of college expenses, also subject to family income. 

To qualify for federal financial aid, including up to $7,395 per year in Pell Grants that don’t need to be repaid, students are required to fill out a form called the Free Application for Federal Student Aid, or FAFSA. It’s also used to determine eligibility for many state financial aid programs. Though the FAFSA has been simplified and cut from 108 questions to as few as 18, more than 40 percent of high school seniors don’t submit one, presumably because they think their incomes are too high; in fact, more than 40 percent of families that get Pell Grants have household incomes over $40,000. 

To maintain eligibility, a new FAFSA has to be submitted every year. Some selective private colleges make admitted applicants fill out (and pay for) yet another form, called the CSS Profile, to determine whether they’ll get institutional grant aid.

Nearly half of employers offer tuition reimbursement as a benefit for full-time employees, typically of up to $5,250 — the maximum nontaxable amount — according to the Society for Human Resource Management. 

Caveat emptor

If advertising one price while charging most customers a different one seems shady, that’s nothing compared to the other money tricks that many universities and colleges play.

Under federal law, institutions have to provide net-price calculators on their websites, where prospective students can see the real, rather than the sticker, price. But research by scholars at the University of Pennsylvania Graduate School of Education found that two-thirds of these showed prices that were out of date or didn’t indicate what year they were from. (Again, more reliable net price figures can be found in Hechinger’s Tuition Tracker.)

They’re also required by law to estimate an annual cost of attendance that includes all student expenses. But half of these projections end up lower than what students actually will have to pay, according to another study. At the same time that they advertise sticker prices higher than most people will pay, more than 4 in 10 financial aid administrators said in a survey that they’re under pressure to keep the total cost of attendance figure looking lower than it is. 

Those practices seem downright virtuous compared to what may be the most notorious document admitted applicants receive, right after the acceptance comes: the financial aid offer.

This seemingly random collection of jargon uses such incomprehensible terms as “total net expenses” or “total net and indirect cost.” One study found that colleges had come up with 136 different terms for “unsubsidized student loan” — in two dozen cases, without including the word “loan.” Only 40 percent of the schools told students what they’d actually have to pay, making it impossible to compare prices.

Ask a pro for help with this, or demand that the financial aid office walk you through it. The Hechinger Report’s Offer Letter Decoder can also help decipher it for you. So can the College Cost Calculator from the advocacy nonprofit uAspire.

Just as important as understanding offers of financial aid is being prepared to appeal them. Many families don’t think they can negotiate for more, but they’ve never been in a stronger position to do it. Consumers with competing offers can play institutions against each other. Even if they don’t get more, it doesn’t hurt to try. There’s a worksheet from uAspire with more about how to appeal financial aid offers and a simple form from several other nonprofit advocacy groups that can be used to automatically generate an appeal.

Misleading offers of financial aid aren’t the end of the pricing tricks colleges use, however. There are two more particularly insidious examples to watch for.

In a little-known bait and switch, colleges often give more institutional financial aid to students in their first year, to entice them to enroll, while lowering it after that. First-year students get average discounts of more than 57 percent, but the average among all students falls to around 51 percent . And at about half of colleges and universities, students who get outside scholarships from the likes of the Rotary Club or Chamber of Commerce find their already-promised institutional financial aid reduced by an equivalent amount — usually learning about this just before the fall semester starts. Financial aid offices euphemistically call this practice “scholarship displacement”; critics deride it as “the August surprise.”

Schools can find out about the scholarships when they get checks from scholarship providers; some go so far as to check lists of winners, according to the National Scholarship Providers Association, or NSPA. But some providers will agree to defer the awards until students have graduated, thwarting scholarship displacement. And as with everything else about financial aid — including when the amount goes down in sophomore year — families can appeal.

There’s something else they can do at the outset to avoid these games: Pick a school that doesn’t play them.

Or pick a different option for training altogether. That’s the subject of the next installment.

Invite others to sign up for our newsletters.

Copyright © 2026 The Hechinger Report, All rights reserved.

Click here to manage your newsletter preferences