Sticker shock vs. what you actually pay: Colleges move to close the gap

Washington College in Maryland lists tuition at nearly $60,000 a year. The average student there pays less than half that — $28,000, covering tuition, fees, housing, and food combined. That gap, replicated at hundreds of institutions across the country, is at the heart of a crisis of confidence in American higher education, and a growing number of colleges are now trying to close it — or at least make it legible.

The U.S. Department of Education's 2025 College Affordability and Transparency Report, along with a College Board analysis and a voluntary transparency coalition now spanning more than 720 colleges, together paint a picture of a sector under pressure to explain itself — and responding in strikingly different ways.

The Department of Education's report, which covers nearly 450 colleges and universities required to explain their pricing, found that 60 percent of those institutions — already flagged for raising prices faster than their peers — have no plans to lower costs. The remaining 40 percent said they intend to bring prices down, which the department cited as proof that affordability is a choice, not an inevitability.

Despite many of the 450 institutions indicating no plans to lower prices, even after increasing at rates faster than other institutions across the nation, the other 40 percent of institutions indicated they intend to lower costs, demonstrating that institutions can make affordability a priority when their leaders choose to do so.— U.S. Department of Education

The report also spotlights the wide spread between sticker prices and net prices — what students actually pay after grants and scholarships. The University of Southern California charges $72,097 in annual tuition but has a net price of $43,412. Columbia University charges $71,845 but its net price is $22,520. Pepperdine University, by contrast, charges $69,918 in tuition and has a net price of $66,585 — meaning most students there receive little aid relative to the sticker. At the other end, Brigham Young University charges $6,688 in annual tuition with a net price of $16,694, according to the department's data.

The department has been required by law to collect and publish this pricing data since 2011, under Section 132 of the Higher Education Act. What's new this year: for the first time, it is making the written explanations that colleges themselves submitted — justifying their price increases — downloadable by the public. Institutions cited adding staff, raising salaries, and increasing operational costs as the main drivers.

On the other side of the ledger, a cluster of liberal arts colleges announced free-tuition programs in recent weeks, targeting families at or below specific income thresholds. Denison University in Ohio, with a sticker price of $74,000 for 2026-27, will charge nothing for tuition to students whose families earn $100,000 or less starting in fall 2027. Families earning up to $200,000 will pay no more than 5 percent of their income toward tuition; those earning up to $300,000, no more than 10 percent; and those earning up to $400,000, no more than 15 percent.

Families often don't know the extent of aid they could receive at Denison and that the new program provides clarity earlier in the application process.— Adam Weinberg, President, Denison University

Washington College announced it will cover tuition entirely for new full-time students from Maryland whose families earn $75,000 or less. Wellesley College in Massachusetts set its free-tuition income cap at $200,000; Middlebury College in Vermont at $175,000. Earlham College is targeting Indiana residents earning $100,000 or less, and Newberry College is doing the same for South Carolina students — a last-dollar program that kicks in after federal and state aid and scholarships are applied. The $100,000 threshold would cover the majority of households in both states: Indiana's median household income in 2024 was just under $72,000, and South Carolina's was just over $69,000, according to Census data cited by Higher Ed Dive.

A Brookings Institution report cited by Higher Ed Dive found that many types of institutions already award enough aid on average to cover tuition for students from the bottom quarter of the income distribution — the exception being private tuition-dependent colleges. The report also found that free-tuition pledges often don't add new money so much as repackage existing aid in a more visible form.

For many students, free tuition policies may function less as new aid than as a repackaging of existing aid into a more salient form. While free tuition may not correspond to additional aid, these policies can help communicate to eligible students that they will not need to pay the full sticker price.— Phillip Levine, Senior Fellow, Brookings Institution

A separate effort focuses not on price levels but on how prices are communicated. The College Cost Transparency Initiative (CCT), established in 2022 by ten higher education associations including the American Council on Education and the National Association of Student Financial Aid Administrators, asks member colleges to standardize the language and format of financial aid offers so families can compare them across institutions. More than 720 colleges have voluntarily joined, collectively serving nearly 7 million students. Reed College in Portland, Oregon, announced its membership this month.

Choosing a college is one of the most important decisions a student and family will make, and they deserve clear, straightforward information about the financial commitment involved.— Audrey Bilger, President, Reed College

Understanding the cost of college is one of the most critical steps in helping students and families make informed, confident decisions about their educational futures. If this project has shown us anything, it's that this work is complex, but can be accomplished when institutional leaders and practitioners make cost transparency a priority.— Melanie Storey, President and CEO, NASFAA

The College Board's 2026 Trends in College Pricing and Student Aid Report adds important context: average published in-district and in-state tuition and fees rose less than 3 percent at public two- and four-year colleges in 2026-27, before adjusting for inflation. Adjusted for inflation, average tuition and fees have actually declined in the public sectors over the last decade and remained flat in the private nonprofit four-year sector. About 70 percent of full-time undergraduate students receive grant aid that reduces their actual cost of attendance.

About 70% of full-time undergraduate students receive grant aid that reduces the actual cost of attending college. Families need clear net price information early in the college application process.— Jessica Howell, Vice President of Research, College Board

The federal government is also pointing to recent legislation. The Department of Education's report references provisions in the One Big Beautiful Bill Act — also called the Working Families Tax Cuts Act — as part of recent policy changes aimed at making college more affordable, alongside more than $100 billion in annual federal aid investments. Whether the combination of voluntary transparency pledges, income-based tuition guarantees, and new federal policy adds up to a meaningful shift in what families pay remains to be seen: participation in the CCT is voluntary, outcomes from the new tuition programs won't be measurable until their entering classes arrive in 2027, and the majority of colleges flagged for the fastest price increases say they have no plans to slow down.

Why it matters — The price families see when they look up a college is often dramatically different from what they will actually pay — and the confusion is driving students, especially first-generation and lower-income applicants, away from schools that might actually be affordable for them.

Reported by highereddive.com, reed.edu, newsroom.collegeboard.org, fsapartners.ed.gov