2012 CATEF Summary Guide to College Costs

Annual Report on Institutional Responses to the College Affordability and Transparency Explanation Form INTRODUCTION To meet requirements of section 132(e)(2) of the Higher Education Act of 1965 (HEA), as amended by the Higher Education Opportunity Act of 2008, the Secretary is required to issue an annual report that summarizes all of the reports from institutions required under section 132(e)(1). Institutions report information on tuition and net price (the price of attendance after considering all grant and scholarship aid). For each of the nine institutional sectors, the following lists are updated annually and posted by July 1 on the U.S. Department of Education College Affordability and Transparency Center (CATC) Web site (http://collegecost.ed.gov). • Highest tuition and required fees: A list of the five percent of institutions that have the highest tuition and required fees for the most recent academic year. • Highest net price: A list of the five percent of institutions that have the highest net price for the most recent academic year • Lowest tuition and required fees: A list of the ten percent of institutions that have the lowest tuition and required fees for the most recent academic year • Lowest net price: A list of the ten percent of institutions that have the lowest net price for the most recent academic year • Highest increase in tuition and required fees: A list of the five percent of institutions that have the largest increase in tuition and required fees over a three-year period. • Highest increase in net price: A list of the five percent of institutions that have the largest increase in net price, expressed as a percentage change over a three-year period. The lists are created using data collected by the National Center for Education Statistics (NCES) through the Integrated Postsecondary Education Data System (IPEDS).1 Average net price is for full-time beginning undergraduate students who received grant or scholarship aid from federal, state or local governments, or from the institution. It is calculated by subtracting the average amount of federal, state/local government, or institutional grant or scholarship aid from the total cost of 1 IPEDS is a mandatory data collection for institutions that participate in or are applicants for participation in any federal student financial aid program authorized by Title IV of the Higher Education Act of 1965, as amended 20 USC 1094 (a)(17), HEA section 487(a)(17) and 34 CFR 668.14(b)(19). More information about IPEDS is available at http://nces.ed.gov/ipeds. 1 attendance. Total cost of attendance is the sum of published tuition and required fees, books, and supplies, and the weighted average for room and board and other expenses.2 The 2011 lists—posted on the CATC Web site on June 30, 2011—were based on data collected during the 2009-10 IPEDS data collection cycle.3 The 2011 list for highest increase in tuition and fees was calculated by determining the percentage change in tuition and fees between 2007-08 and 2009-10. The list for the highest increase in net price was calculated by determining percentage change in net price between 2006-07 and 2008-09. Each year, institutions have the opportunity to review the data they submitted during the prior year for accuracy and to revise it, if necessary, via the IPEDS Prior Year Revision System. The lists reflect any revisions made by institutions through that process. Both the originally reported data and revised data for all Title IV institutions are publicly available via the IPEDS Data Center. Institutions that are on either the list of schools with the highest percentage change in tuition and fees or the list of schools with the highest percentage change in net price must submit a report to the Secretary of Education describing the major areas in the institution’s budget with the greatest cost increases, an explanation of those cost increases, and the steps the institution plans to take to decrease those costs.4 To aid institutions in complying with this requirement, the Department established the online College Affordability and Transparency Explanation Form (CATEF) where institutions on either list could report the required information. Specifically, institutions were asked to report the five major areas in the institution’s budget with the greatest cost increase; for each cost area selected, the total dollar amount at the beginning and end of the three-year period; an explanation for each cost area increase; and a description of steps to reduce costs. Institutions on either list were also asked to report any decreases in major sources of revenue and the total dollar amount of those revenue sources at the beginning and end of the three-year period. Additionally, institutions could report whether tuition and fee rates were within the exclusive control of the institution and, if not, the agency or agencies responsible for determining increases. There were 243 institutions on the list of schools with the highest percentage change in tuition and fees (referred to in this report as the “tuition list”), 244 on the list of schools with the highest percentage change in net price (“net price list”), and 41 institutions on both lists.5 This report summarizes the responses of institutions that responded to the 2011 CATEF. The Department will 2 In IPEDS, public institutions report tuition and fees and average net price using in-district or in-state rates. Some schools offer programs that enroll students on a continuous basis or start throughout the school year, referred to as program reporters in IPEDS. For IPEDS program reporters, tuition and fees and average net price are for the institution’s largest program. 3 See Appendix I for a list of the institutions on the tuition list and Appendix II for a list of the institutions on the net price list. 4 The law includes an exemption from these two lists for any institution whose increase in tuition and fees, or net price, is less than $600 for the three-year period. 5 Appendix III provides more information on the number of institutions, by sector, that provided information required by law through the CATEF. 2 annually release a new version of this report that summarizes the information reported by institutions on either list. SUMMARY OF RESPONSES Overall, the three cost areas most commonly cited by institutions on the tuition list and those on the net price list were: • faculty salaries, • administrative and managerial salaries, and • “other costs” (including instructional materials for students, such as books and laptops; special programs for students, such as work experience or mentoring; fees for third party services, such as accounting and legal; rent; maintenance; taxes; depreciation; and writing off of uncollected debt). Many institutions stated that rising student enrollments caused increases in several of the cost areas, and that they were looking for ways to deliver quality education more efficiently. However, institutions stated they could not foresee how they could lower costs if enrollments continued to grow. Institutions on the net price list cited changes in how they estimated the cost of attendance (a required element in the statutory definition of net price) as a common reason for increases in net price. Among institutions on the net price list, about 17 percent reported that they updated estimates for housing, transportation, and other expenses for students that live off-campus. As a result, this change increased the total cost of attendance between 2006-07 and 2008-09, which, in turn, caused the large percentage increase in net price during this time period. Institutions reported that they have since developed systematic processes for estimating cost of attendance and are updating these processes regularly in order to avoid large fluctuations in estimated cost of attendance over time. Institutions cited other factors related to increases in tuition and fees and net price, some of which institutions identified as outside the control of the institution. For example, more than half of the public 2-year and 4-year institutions reported that they do not exclusively control setting tuition and fees, but rather state-level organizations, legislators, and governing boards are responsible for establishing student charges. Moreover, across both lists, 152 institutions reported that decreases in major revenue sources impacted tuition and fees and net price. Of these institutions, about 85 percent were either public institutions or private non-profit 4-year institutions. Among the public institutions that reported a decrease in major revenues, about 82 percent indicated that decreases in state appropriations during the time period impacted charges to students. Private non-profit 4-year institutions, meanwhile, most commonly cited decreases in private gifts, grants, and contracts and in endowment transfers as key causes for tuition and net price increases. 3 Reasons for Changes in Tuition and Fees and Net Price Overall, the three most commonly cited areas of cost increase for institutions on the tuition list and those on the net price list were the same—faculty salaries, administrative and managerial salaries, and “other costs,” as shown in Table 1.6 The median percentage change in the total dollars spent in each of these cost areas varied. Table 1. Number of institutions on the tuition list and on the net price list that selected each cost area, and the median percentage change in total dollars, by cost area and list. Cost Area Tuition List Net Price List Number of Median

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