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Tracking College Tuition Growth, 24-23

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Tracking College Tuition Growth, 24-23

DATE: July 2024

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Previous research analyzed the rapid tuition growth that occurred from the late 1980s to 2010. That research indicates that several key factors drove the rise in college tuition: large expansions in the federal student loan program, a dramatic increase in the college-earnings premium, steady increases in average parental income, and state support of public schools that did not keep pace with tuition. Where that analysis stops, this analysis begins, showing that tuition growth slowed markedly from 2010 to 2022. We highlight several factors contributing to this pivot, interpreting those factors in light of our previous findings. Slower income growth, the flattening of the college-earnings premium, a rise in remote learning, a reduction in Pell grant awards and a de facto freeze on nominal federal student loan limits have all worked towards reducing tuition growth. However, tuition growth has been supported by rising foreign enrollment and the higher uptake of income-driven repayment plans.

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Federal Reserve Bank of Richmond. "Tracking College Tuition Growth, 24-23" in Economic Brief (July 2024). https://fraser.stlouisfed.org/title/6034/item/672009, accessed on January 24, 2025.

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