As the 2023-2024 academic year enters the final push following spring break, parents are finalizing funding plans for the first year of college. The College Board conducted research and provides data in their latest report: "Trends in College Pricing and Student Aid, 2023."
While the report is data heavy and includes very nuanced data related to income and inequity, there is a glaring detail parents should take note of: enrollment is declining. Why does this matter?
According to the report, between fall 2019 and fall 2021, enrollment declined 5 percent (about 947,900 students). Most of this is due to COVID and we have not seen the recent data, but I would hedge a bet, most campuses have not fully recovered to pre-pandemic enrollment levels. As such, the availability of federal aid, institutional (merit & needs) funding, grants and loan packages will also decline.
Additionally, with many community colleges offering dual-credit or dual-enrollment programs, the K-12 school district is paying the costs, resulting in a change of source, but not necessarily the number of students serviced by the institution. The pot of money used to assist needs-based students has been relocated to some state sources, shifted to schools with larger direct-admit or some schools are offering special programs for in-district "free" tuition when certain criteria are met.
For parents, this means tuition may increase to offset declines in funding sources. The report indicates in the 2022-2023 academic year, tuition increased anywhere from 2 percent to 4.5 percent depending on public/private institution or two-year/four-year program. Once the 2023-2024 data is released, I'll post the report here.
Finally, the report does not directly address the direct-admit offer many state-schools have implemented to the top 5 percent and 10 percent of in-state graduating classes. These public, state schools automatically admit students who meet the criteria in hopes of increasing the size of the incoming freshman class. In turn, the larger class size may increase federal funding provided to the school to offset institutional aid. The down side to guaranteed admission is a less competitive process also means fewer spots for everyone else. For less populated, more rural states, this may not be a big deal. However, for larger school systems in heavily populated states where students wish to save money by living at home, the available aid will decrease. Additionally, the prospect of receiving larger aid packages as an out-of-state student are also decreasing.
I encourage everyone to review the report from College Board and investigate how the findings may impact your personal situation. With the delayed FAFSA and schools also adjusting their merit and needs-based aid packages, this year will be one to set the financial baseline for classes beginning in fall 2025. Stay tuned!
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