College Costs and Prices: Background and Issues for Reauthorization of the Higher Education Act

Based on available data, college tuition and fees have been rising more rapidly than household income over the past 2 decades. The divergence is particularly pronounced for low-income households and becomes less pronounced as household income increases. In analyzing price increases, researchers have considered whether a relationship exists between federal aid and price increases. There are several ways Congress could consider addressing the issue, such as imposing price controls, offering incentives for controlling prices or costs, ensuring the public is better educated about college cost and price issues, reducing regulatory burden, or changing federal financial aid programs. It is not clear which of these strategies would be most effective, or if Congress has appropriate tools at its disposal to address the issues of costs and prices