Princeton University is announcing a new financial aid formula, starting in fall of 2023, that will make attendance free for families earning up to $100,000 a year. Families earning more than that will also be eligible for more aid than they received previously.
It's a generous offer given that Princeton's so-called "sticker price" is more than $83,000 a year. The school has a history of trying to make it more affordable for students to attend.
In 2001, Princeton became the first university to ensure students wouldn't have to take out loans to earn a degree. But for non-Princeton students, costs are a major concern.
According to the National Center for Education Statistics, the cost of attending a four-year college has soared from the equivalent of nearly $12,000 a year in 1981, to $30,000 in 2021.
That's a 153% increase in 40 years for tuition, fees, plus room and board — even when adjusting for inflation.
Some of the reasons for these higher costs include colleges offering more support services, changes in state and local funding and higher costs to hire professors and administrators.
Even so, a college degree remains a good investment: The Bureau of Labor Statistics reports in 2022, the median weekly earnings for a 25 year old with a bachelor's degree was 40% higher than someone with only a high school diploma.
Student loan borrowers face budget strains as repayments kick back in
The Department of Education estimates 43 million people in the U.S. owe a collective $1.6 trillion in federal student loan debt.
Anthony Carnevale of Georgetown University's Center on Education and the Workforce says by 20-31, 40% of American jobs are projected to require college or graduate degrees.
"70% of those jobs are good jobs. Which means they'll pay by age 40 they'll pay a minimum of $45,000 and an average among those jobs of about $70,000," said Carnevale.
"When students earn a college degree they're more likely to get a higher income, they're going to have better health outcomes, they're more likely to be employed. There's an abundance of research that shows that college pays off," said Richard Green, the executive director for Student Engagement for BigFuture.org.
The College Board is the non-profit that administers the SAT and Advanced Placement programs, with the goal of expanding access to higher education.
Staying in-state and going to public colleges are two ways to keep costs down. The Big Future website, which the College Board runs, has other tips for students.
"There are over 23,000 scholarships on Big Future that provide over $4 billion in aid. And to make it easier for students and families, when students log in they can get matched with a personalized list of scholarships from Big Future based on their future plans, their academic history and their background," said Green.
Experts advise students and families to shop around on pricing with the Department of Education's College Scorecard.
It includes links to individual schools' net price calculators.
That's the amount a student pays after subtracting scholarships and grants they might receive.
Experts say private student loans should be the last resort, and again, shop around for the lowest interest rate.
