Latest data again reports college prices have flattened out

Bureau of Labor Statistics July figures show college tuition rising ~1% annually

The Bureau of Labor Statistics (BLS) recently released its latest batch of data on consumer inflation and the metric covering college tuition and fees decreased at an annual rate of -0.1% prior to seasonal adjustments for January through July.  (Yes, that’s a negative number.). This is in contrast to total consumer inflation, running hot at 5.4% on a year-over-year basis.

  • After seasonal adjustments, the BLS is showing an increase in college costs of 1.1% for January through July.  These adjustments are intended to balance out historical trends where tuition increases in the beginning of year are lower than those later in the year.
  • This leads us to conclude that college cost inflation so far in 2021 is closer to 1% because the bureau’s statisticians have been gradually reducing the size of seasonal adjustments over recent years.
  • The figures for the upcoming months and the beginning of the new academic cycle will be significant.  Nothing is normal right now, either in the macroeconomy, labor markets or the higher education business climate, so we make no predictions, but the results for September and October will be notable in light of the enrollment success at highly selective schools and weaknesses at less selective ones.
    • As always, topline inflation numbers include the impact of “student mix”, changes to how many students attend which schools.  Pricing of individual colleges will be only one component of the topline number.
    • Enrollment weakness at community colleges, a persistent trend over the last decade turbocharged by COVID, will lead to less low-cost enrollment, altering the composition of the BLS’ data samples and increasing levels of college price inflation beyond the price increases by individual schools.

Read this post and others at our CTAS Higher Ed Business blog on Substack.