Why Low Tuition Does Not Always Equal Low Cost: A California Example
Earlier this year we published a map of California that showed the differences in net price – the full cost of attendance minus grants and scholarships – for low-income students at public colleges in nine regions across the state. Counterintuitively, our analysis showed that low-tuition institutions may not have low net prices. In many cases a California community college (CCC) – by far the lowest tuition school – had a much higher net price than the nearby University of California (UC) or California State University (CSU) campus. Since publishing our map we have gotten many questions about why this is, given how different tuition levels are across the colleges.
One important factor is that the total costs of college are not nearly as different for students across the segments as their tuition charges might suggest. Total costs include tuition and fees, books and supplies, housing and food, transportation, and other college-related expenses.
Certainly, higher tuition colleges cost more overall than lower tuition institutions before financial aid is taken into account. But they do not cost exponentially more. Total college costs go far beyond tuition and fees for students at all types of colleges: the California Student Aid Commission estimates that in 2015-16, students at any college living off campus without parents – the way that most students at all three public segments live – incurred about $18,000 in non-tuition costs. While there are sizeable differences in tuition and fees alone, compared to the total cost of attending a CCC, the total cost of college was only 23 percent more at CSU and 59 percent more at UC.
Another factor that drives net prices is the amount of grant aid available to students at each college. Grant aid – money that does not need to be repaid – reduces the amount that students need to pay out of pocket for college. It comes primarily from the federal government, the state, and the colleges themselves. In 2015-16, the average amount of grant aid available per low-income student (i.e., Pell Grant recipient) was approximately $5,400 at CCCs, $10,300 at CSU, and $25,200 at UC. The differences in state and institutional aid per low-income student were particularly large, as shown in the table below.
Importantly, not all aid goes to low-income students. Cal Grants reach middle-income students as well, and some programs, including the Middle Class Scholarship and institutional grants at UC, reach students with six-figure family incomes. Still, sharp differences in aid availability persist when we calculate average aid across all students. Per full-time equivalent (FTE) student, the average amount of grant aid was approximately $2,300 at CCCs, $6,400 at CSU, and $10,200 at UC.
These wide disparities in grant aid, combined with the proportionally narrower disparities in total college costs, explain why the lowest tuition colleges in California are often the most expensive. UC students’ total costs are 59 percent more than CCC students’ total costs, but UC students get 300+ percent more grant aid. The additional grant aid more than covers the cost difference between the colleges, leaving UC students better positioned to attend college full time without excessive work or debt.
