The University’s sticker price will jump to $58,488 for incoming students next year, the sixth straight year of 3 percent increases in cost of attendance.
The Class of 2017 will pay $47,343 in tuition, plus room and board – 3.3 percent more than last year’s freshman class, the Board of Trustees voted Friday.
Administrators have touted the steady tuition hikes, which hit a four-year high of 3.7 percent last year, compared to private schools nationally that averaged a 4.2 percent tuition increase. But GW is still nearly $16,679 more expensive than the average four-year private school for the 2012-2013 academic year.
The University has shaken off its reputation as the most expensive school in the country since it became the first to break the $50,000 threshold in 2007. It skimmed out of the top 10 on Forbes magazine’s most expensive colleges list in 2010 by just $25. Now, GW sits at No. 40, just $1,270 less than the No. 10-ranked school.
Executive Vice President and Treasurer Lou Katz said tuition increases create a balancing act to maintain sufficient aid funding and ensure students from different backgrounds have access to the college.
“We’ve tried to be as moderate as we can be during this period of time,” Katz said of the still-tepid economic recovery. “Long term, you’ve got to be cognizant of what families can afford and what they can pay and balance out how you get there, because it does have impact.”
Incoming students will fork over an additional $1,608 in tuition compared to the Class of 2016, and $18,271 more than what freshmen paid 10 years ago.
Over the last decade, GW’s sticker price has increased 63 percent. Similar institutions, like New York and Boston universities, charged 62 and 57 percent more, respectively.
GW’s average need-based financial aid award increased from $20,700 to $28,085 over the last 10 years – a 36 percent increase.
Katz pointed out that GW is one of the only colleges in the country to guarantee fixed tuition and merit financial aid for undergraduates – a recruiting advantage as the school continues to battle its reputation for being pricey. The Board of Trustees established the fixed tuition plan in 2004, locking in a flat rate for incoming students for up to 10 semesters.
But the program is a tradeoff for a tuition-dependent school like GW, with a relatively small endowment. That means that to fund students’ financial aid packages and large construction projects, the University is forced to tap into tuition reserves, University President Steven Knapp said.
“When we pay for student aid, we have to take that out of tuition,” Knapp said. “We don’t have the endowment supporting it.” GW’s fundraising office, which shattered records by bringing in $130 million last year, funds some scholarships, but cannot cover the entire $160 million in financial aid this academic year.
GW cannot make up for an off endowment year or fund larger projects by hiking tuition for non-freshmen due to the fixed tuition system, said Jonathan Robe, a research fellow at the Center for College Affordability.
In the long run, the “high tuition, high discount model is not sustainable, particularly among relatively lower endowed schools” like GW, he said.
Maintaining the growth rate
The “3 percent plan” – which Katz called GW’s attempt to keep the cost of attendance on pace with inflation – has made it relatively less expensive each year compared to other schools.
Last year, when GW raised tuition by 3.7 percent, peer schools such as Boston, Northwestern and Emory universities raised tuition by 3.8, 3.79, 4.3 and 4.8 percent, respectively.
The average rate was 4.2 percent, according to the College Board. Tony Pals, director of communication for the National Association of Independent Colleges and Universities, said that was the lowest rate of increase in 40 years.
Pals said he anticipated colleges to make similar moves this year and said “GW’s increase will certainly be below this year’s average.”
While most schools have yet to announce next year’s rates, Princeton University trustees approved a 3.8 percent hike while Wake Forest University will boost its tuition by 3.5 percent.
Tuition ‘going up, up, up’
Under the current model of 3 percent increases, which Katz said would be sustainable in the long run, the University’s cost of attendance would breach $70,000 by 2020.
Robe said he does not know at what point universities will be forced to stem costs, but said online options like massive open online courses could be a tipping point for some schools to shave off costs.
“Tuition is always going up, up, up,” Robe said, pointing out that tuition costs eat growing chunks of families’ income.
Knapp said affordability was a key issue for him when he entered GW in 2007, holding a meeting with vice presidents to talk about holding cost of attendance increases steady at 3 percent and raising more funds for scholarships.
But as operating costs for colleges continue to increase faster than most other economic goods, particularly labor, Pals said universities are unlikely to ever stop increasing tuition costs.
“If you look at decades worth of data, you’ll see that tuition increases have never been below the rate of inflation,” Pals said. “It is simply not possible, given the nature of higher education.”