How BLS Measures Price Change for College Tuition and Fees in the Consumer Price Index
College tuition and fees, a component of the tuition, other school fees and
childcare index, is included in the education and communication group of the
Consumer Price Index (CPI). Both the tuition and other school fees index and the
college tuition and fees index are published monthly at the U.S. level. The
education and communication index is published in all publication areas on each
area's publication cycle.
The tuition and other school fees index includes the four components shown
below with the relative importance of each index. These data are for the U.S.
city average of the CPI for All Urban Consumers (CPI-U) as of December 2009.
|Tuition, other school fees, and childcare
| College tuition and fees
| Elementary and high school tuition and fees
| Child care and nursery school
| Technical and business school tuition and fees
College tuition and fixed fees (hereafter referred to as college tuition)
accounts for about 50 percent of the weight of the tuition and other school fees
index and is the largest component of this index.
The base period weight for each CPI item group is the out-of-pocket
expenditures households incurred for that item. The weight for college tuition
reflects annual consumer expenditures for undergraduate and post-graduate
studies at 2-year colleges, 4-year colleges, major universities, and
professional schools (law, dental, medical, etc.). The CPI sample of colleges
and universities priced was selected proportional to expenditures for students
as reported by households located in the 87 areas sampled by the CPI. Because
students may choose to attend colleges that are outside of the 87 pricing areas,
colleges included in the sample are located throughout the United States (which
is unlike the samples for most other CPI items).
Only degree-conferring institutions are eligible for pricing in the college
tuition index. However, nondegree students attending degree-conferring colleges
are eligible for pricing. Student tuition, whether priced as a fixed amount per
full-time student or priced per credit hour, as well as necessary fixed fees
(such as registration fees, athletic fees, student union fees, health fees,
etc.) are eligible for pricing. Various types of student financial aid can also
be considered for eligible colleges. Room and board and textbook charges are
covered elsewhere in the CPI sample.
Institutions being priced for the college tuition index are eligible to be
priced on a monthly basis. However, the vast majority of colleges and
universities make a limited number of adjustments to their tuition and fixed
fees each year. To reduce the burden on the colleges' respondents, as well as
the cost of the CPI program, the pricing frequency is reduced. Most institutions
are priced between 2 and 4 months per year, with the selected pricing months
being those where price changes are most likely to occur. For nonpricing months,
the last collected price for each quote is carried forward for use in the
Tuition and fixed fee charges for academic terms are eligible for collection
once the new prices have been set and are payable to the college. Colleges put
the majority of tuition and fee changes into place just before the start of a
new academic year, so most of the changes for the college tuition index will be
captured in the late summer or early fall of each year. Because much of the
year's change is captured in one season, the CPI also publishes a
seasonally-adjusted college tuition index. Seasonal adjustment attempts to take
index changes that are clustered into a small portion of the year, and spread
them over the course of the full year, thereby facilitating the analysis of the
Selection of characteristics to be priced
College Tuition is now eligible to be priced including adjustments for
various types of student financial aid. Scholarships and grants are now
eligible for inclusion, and probability sampling techniques are used to
determine if scholarships or grants should be included when pricing tuition for
a specific college. All College Tuition quotes will price student tuition and
fixed fees. Selected quotes will additionally be adjusted by financial aid.
When CPI field staff seek prices for college tuition, they first determine if
the college being priced is public (owned and supported by a governmental
agency) or private. Next, the field staff selects the major price-determining
characteristics for the student to be priced. It is assumed that the tuition is
for a student residing in a specific area, from among the 87 CPI sampling
areas, where the college was identified for sample selection. The college's
resident status rules are used to determine if a student from this specific
sampling area is deemed to be an in-state resident or an out-of-state
nonresident. Once all data have been selected, the many characteristics
associated with this student are identified to ensure that the same student is
priced each collection period, or if there is a change in the student's
situation, that change can be identified readily. The following is an example of
characteristic information that would be identified:
Control of schoolpublic
Course or hour load per term15 credits
Length of school term pricedsemester
Method of tuition chargeper semester
Fixed feestudent activity
Financial aid included
Type of financial aidPell Grant
Issues associated with college tuition
One of the most difficult problems for the CPI is to accurately quantify
changes in the quality of an item and to factor these quality changes out of
the item's price movements. If an item's characteristics change, a quality
improvement (such as increased instructional time) or deterioration may have
occurred. In addition, because quality change often accompanies price change,
when the price of an item changes significantly, BLS field staff will ask the
respondent to identify a cause.
For college tuition, the majority of price changes from respondents are not
accompanied by resulting causes. When no causes accompany tuition changes, and
the characteristics for the identified tuition items remain unchanged, the price
changes are reflected in the college tuition index.
The inclusion of financial aid has added to the complexity of pricing college
tuition. Many selected students may have full scholarships (such as athletic),
and therefore their tuition and fixed fees are fully covered by scholarships.
Since these students pay no tuition and fees, they are not eligible for pricing.
In addition, there are other students who pay a very small fee to the college
since the majority of their tuition and fixed fees are covered by scholarships.
When these situations are priced by BLS Field Staff, normal increases in
tuition/fees and minor declines in scholarship awards can provide extremely
large changes for entry in the CPI index. For some of these same quotes, minor
tuition declines or minor scholarship award increases can actually result in
negative prices, which make the quotes ineligible for use in the CPI.
Additional information on the Consumer Price Index
can be found in the BLS Handbook of Methods, chapter 17, "The Consumer Price Index," Bulletin 2490 (1997).
The current version of this chapter is also available on the BLS Internet site
(www.bls.gov/opub/hom/homch17_a.htm) or you
may call the Information and Analysis Section of the CPI
Last Modified Date: April 21, 2010