Some selective institutions may soon cost undergraduate students more than $100,000 each academic year, experts tell Inside Higher Ed. A few law schools already hit that mark several years ago, and the most expensive private undergraduate programs are catching up quickly, amid growing operating costs and wages. And “while the sticker price is a figure few students will pay, the number itself may have significant psychological and political implications for higher education,” Inside Higher Ed writes.
Reaching six figures
Only a fraction of college students will pay $100,000 per academic year, and only highly selective colleges will come near that price. Vanderbilt University, which accepted a record-low 5.6% of applicants for the Class of 2027, says 2023-24 college costs, including tuition and fees, total $89,590 per academic year. However, for an engineering student, the cost of attendance might be closer to $98,426 for the 2024-25 academic year when taking into account tuition, fees, and indirect costs, such as course materials, transportation, and other personal expenses, according to the CTAS Higher Ed Business newsletter published by Julian Treves, an investment advisor. Treves estimates that by the 2025-26 academic year, Vanderbilt could become the first four-year institution to cross the six-figure threshold.
“My expectation is that many of the institutions, two years from now, will be above $100,000,” Treves told Inside Higher Ed. “The fly in the ointment here is of course whether there’s massive resistance either from consumers or the administrators at colleges themselves.”
Keeping high-priced education accessible
While college costs keep rising, few private institutions are rapidly approaching $100,000, according to the College Board’s Trends in College Pricing and Student Aid 2023 report. The average published (sticker price) tuition and fees for full-time undergraduate students at private nonprofit four-year colleges in 2023-24 was $41,540. The sticker price for attending public four-year out-of-state and in-state institutions was even less, at $29,150 and $11,260, respectively.
Tuition discounts also ensure that most college students pay significantly less than the sticker price. For the 2022-23 year, average tuition discount rates at private, nonprofit colleges and universities reached record highs of 56.2% for first-time, full-time, first-year students and 50.9% for all undergraduate students, according to a National Association of College and University Business Officers (NACUBO) study.
“By providing grants, fellowships, and scholarships, these institutions forgo more than half the revenue they otherwise would collect if they charged all students the tuition and fee sticker price,” an NACUBO press release said.
Those discounts may reach 75% at some institutions, Bryan Alexander, a senior scholar at Georgetown University, told Inside Higher Ed. At Vanderbilt, which meets students’ full demonstrated financial need, tuition discounts have grown to compensate for tuition increases, with the help of philanthropy. Most students from households making under $150,000 a year receive discounts that cover undergraduate tuition, according to a university spokesperson. The median annual aid award for students from households making between $150,000 and $175,000 is $62,650, and is $39,940 for students from households making over $200,000.
Wellesley College, University of Southern California, and Harvey Mudd College, which are some of the colleges Alexander projects will cross the six-figure threshold by the 2026-27 academic year, say they are providing students generous aid packages to make higher education accessible to those with demonstrated needs.
“It’s very expensive to offer the kind of education that they offer,” says Sandy Baum, a nonresident senior fellow at the Center on Education Data and Policy at the Urban Institute. “That is not something that’s going to change and the fact that they discount for students who can’t afford to pay the full price, that’s a good thing.”
In this environment, experts say there needs to be more transparency about the actual net cost of attending college, or what students will actually pay after receiving discounts. Students may be reluctant to apply to institutions that have higher sticker prices without realizing that they may only pay a fraction of that price based on their family income and financial aid packages.