Rising Tuition? It’s Not About Sticker Prices

University tuition is high, and it’s been climbing for decades. Listed tuition and fees at both public and private institutions have steadily increased since 2002. Harvard’s price tag for tuition now exceeds $50,000 — then, it was below $25,000.

These exorbitant sticker prices are unaffordable for most families and deter low-income students from applying in the first place.

Many critics stop there, blanching at the announced tuition price and proclaiming an affordability crisis in higher education. A closer look at the data, though, reveals a far more complex story.

Higher sticker prices can actually decrease net costs for some families by increasing available financial aid. And some tuition increases — though not all — are genuine responses to higher costs. Though there are ways to make high-quality education more affordable, the solutions are not as simple as lowering the listed price of tuition.

First, why has tuition increased so much? For public institutions, which educate approximately three out of every four undergraduate students in America, the reason is clear: substantial cuts in state funding.

Since 2001, states have, on average, cut funding for higher education by nearly 18 percent per student. In 2003, just over 30 percent of revenue at public institutions came from tuition. By 2018, it was almost 50 percent. To compensate for the loss of state funding, public universities have, unsurprisingly, had to raise tuition.

For private institutions, the story is more complicated. Indeed, it’s hard to pin price hikes on any one factor in particular, and studies that do often miss the full picture.

For example, some say prices have risen simply because universities have expanded their administrative staff, contributing to “bloat” — wasteful spending that fails to improve educational quality.

To be sure, administrative inefficiencies exist aplenty. But to explain continually rising costs, the bloat theory requires more and more waste each year — a trend not reflected in the data. The administrative share of higher education spending has held relatively constant.

Moreover, university administration is not a vast nebula of useless bureaucrats. In fact, many new administrators include mental health counselors, student advisers, the Title IX office, and IT support staff, among others. Some of these positions are as integral to a thriving student body as instructional faculty and staff.

Ultimately, these new hires are likely only responsible for a small fraction of tuition increases — they don’t explain the massive jumps we’ve been seeing over the past several decades.

Instead, as Harvard dean and professor Bridget Terry Long explained in her testimony before the United States Senate Committee on Finance, tuition growth is “related to a myriad of other internal and external factors.”

For instance, the cost of hiring and retaining teaching staff — especially tenured professors — has skyrocketed. But these increases are not unreasonable; adjusted for inflation, prices for hiring doctors, lawyers, and other similar professionals have risen at similar rates.

In addition, universities now spend more per student on amenities, such as dining services, dormitories, and physical education facilities. They also borrow more money to fund construction ventures and building upgrades.

All these factors and more require private universities to raise tuition sticker prices each year. Thus, it is often simply the case that institutions need more revenue to finance expenditures that they believe will improve the overall educational experience. And institutions can’t offset those necessary expenditures only by trimming administrative fat.

But high price tags might not be so bad, as long as universities redistribute the extra revenue to financial aid for students with more limited means. Last year, Syracuse University, for example, raised tuition by 4.5 percent and increased aid by 9 percent. Princeton announced a new financial aid strategy that eliminates costs for most families earning up to $100,000 a year.

Rather than worrying about listed tuition prices, we should instead focus on the net tuition paid by students in different income brackets post financial aid. Universities should engage in more aggressive price discrimination, shifting from merit-based to need-based aid and forcing the wealthy elite to foot the bill so that low- and middle-income students can attend college functionally for free.

This is what has been happening. In the past ten years, private universities have steadily increased their tuition discounting. As a result, average net tuition has actually decreased. College rankings should factor in the progressiveness of each institution’s aid curve to encourage this trend.

Unfortunately, high sticker prices have an unintended consequence: They deter low- and middle-income students from applying in the first place. Thus, universities should also take steps to advertise how inexpensive they actually are for those students with limited means and make the financial aid process as seamless as possible.

Ultimately, we should focus on the net cost of attending college, not rising sticker prices. For public institutions, it’s up to the government to increase appropriations to decrease student costs. But for private universities, the high-tuition, high-aid model might be the best we can do. If tuition prices must rise, let’s make the most of it.

Julien Berman ’26 lives in Canaday Hall. His column, “Toward a Higher Higher Education,” appears on alternate Tuesdays.