Consumer Price Index

Measuring Price Change in the CPI: College tuition and fixed fees

College tuition and fixed fees, a component of the tuition, other school fees, and childcare index, is included in the education and communication major group of the Consumer Price Index (CPI). Both the tuition, other school fees, and childcare index and the college tuition and fees index are published monthly at the U.S. level. The education and communication index is published for all published areas on each area's publication cycle.

Relative importance

The relative importance of an item category is its percent of the CPI weight as of December of the most recent year.

Table A. Relative importance, December 2018
Item Relative importance

Tuition, other school fees, and childcare

2.924

  College tuition and fees

1.627

  Elementary and high school tuition and fees

0.338

  Child care and nursery school

0.806

  Technical and business school tuition and fees

0.032

Sample selection

College tuition and fixed fees (hereafter referred to as college tuition) accounts for about 55 percent of the weight of the tuition, other school fees, and childcare 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 areas sampled by the CPI. Because students may choose to attend colleges that are outside of the pricing areas, colleges included in the sample are located throughout the United States (which is unlike the samples for most other CPI items).

Only undergraduate and graduate degrees awarded at degree-conferring U.S. institutions are eligible for pricing. Eligible degrees include Bachelors, Associates, Masters, and professional/doctoral degrees. For Associates degrees, only Associate of Arts/Associate in Arts (A.A.) or an Associate of Science/Associate in Science (A.S.) degree designed to prepare students to pursue a 4-year degree are eligible for pricing. Institutions that do not offer degrees are not eligible for pricing. Non-degrees such as certificates, diplomas, and occupational associate degrees designed to help students prepare for a particular career path are not priced in this index. 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 are also considered for eligible colleges. Charges for room and board and textbooks are covered elsewhere in the CPI sample.

Pricing

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 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 current index.

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 underlying trend.

Selection of characteristics to be priced

College tuition is eligible to be priced, including adjustments for various types of student financial aid. The CPI first began tracking the price of tuition adjusted by financial aid in 2003. Scholarships and grants are eligible for inclusion; 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 price student tuition and fixed fees; selected quotes are additionally be adjusted by financial aid.

Pricing full college tuition and fixed fees involves collecting the sticker price of tuition and fixed fees at the various US colleges and universities. Moreover, adjusting tuition and fixed fees using the average award of all scholarships/grants combined is the preferred method for financial aid adjustments. However, if the respondent cannot supply financial aid information for the average student who receives eligible financial aid, it is acceptable to adjust the price of tuition and fixed fees using financial aid data on students who receive specific eligible scholarships/grants.  

When CPI data collectors 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 data collectors select 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 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 could be identified:

  • Control of school—public
  • Resident status—resident
  • Attendance—full time
  • Degree status—undergraduate
  • Course or hour load per term—15 credits
  • Length of school term priced—semester
  • Method of tuition charge—per semester
  • Fixed fee—registration
  • Fixed fee—health
  • Fixed fee—general
  • Fixed fee—student activity
  • Financial aid included
  • Type of financial aid—Pell Grant

Price change and quality adjustment

Price change

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, 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. Additionally, tuition-free schools and guaranteed tuition programs (fixed plans) are not priced in the CPI.

Quality adjustment

One of the most difficult problems for the CPI is accurately quantifying changes in the quality of an item and factoring 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 data collectors 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.

Data

Access data for college tuition and fixed fees in our online database.

Additional information

Additional information may be obtained from the Consumer Price Index Information Office by email or calling 202-691-7000. Information on the CPI's overall methodology can be found in the BLS Handbook of Methods.

Last Modified Date: April 24, 2019