Are CU Boulder ‘out-of-pocket’ costs actually decreasing?
Last November, I (and presumably all other University of Colorado students) received an email from university president Bruce Benson that stated the following:
In the past five years, the change in the amount students and their families pay for a CU education relative to inflation may surprise you. In fact, over that five-year period, average out-of-pocket costs have actually declined between 3 and 12 percent at CU Boulder and have gone up by no more than 5 percent at our Denver and Colorado Springs campuses.
As a tuition-paying student, this is a hard statement to take at face value. My gut reaction to this statement was “that’s a bunch of bullshit”. Luckily, the University of Colorado has made tuition and financial aid data available to the public. So, strap in for a data analysis that aims to see whether this statement holds true.
Before I get into the nitty-gritty of the analysis, I wanted to unpack a few things about Benson’s statement. First, Benson is only looking at the previous 5 years, which I will need to take into account in the analysis. Second, Benson is saying that these numbers hold up when compared to the rate of inflation, which will also need to be accounted for in the analysis. Third, for the sake of clarity, “cost of attendance” in this analysis is defined as tuition, fees, and room and board. CU includes an “other” field that is supposed to include textbook costs and personal expenses, but I omitted this field in the cost of attendance calculations because it is hard to know exactly what is included in this figure and these costs typically aren’t covered by financial aid. Lastly, Benson is strictly referring to “out-of-pocket costs”. Arguably, this is a loose term that is thrown around in the university financial aid world to refer to all money that must come out of a person’s personal finances to pay for their education. Notably, federal loans are considered financial aid and typically do not count towards this “out-of-pocket” figure. After looking through the data CU Boulder makes available, this makes the analysis a little easier, but it is questionable whether student loans should really be considered financial aid rather than out-of-pocket costs.
The University of Colorado makes their financial aid and cost of attendance data available here. It is provided in Excel spreadsheets that I combined into a CSV file. For the sake of this analysis, I will be using the example of an in-state undergraduate student in the College of Arts and Sciences.
For starters, I looked at the trend of the total cost of attendance (tuition, fees, and room & board) each year at CU Boulder. As is seen in the above chart, the out-of-pocket cost savings don’t look to be coming from reductions in the cost of attendance, even when compared to adjustments for inflation from 2005 and 2013. The steepest line on the chart is that of the actual cost of attendance, which on average has increased ~4.9% every year since 2005. To the university’s credit, the average increase in the cost of attendance from 2013 onwards is ~4.2%. Either way, the reduction of 3 to 12 percent is not coming from reductions in the cost of attendance.
This could mean that the out-of-pocket cost reductions are coming from increases in financial aid being offered to students. Since 2010, the total financial aid that has been offered to qualifying CU students has increased by $101 million. However, the average aid offered to a student has only increased by an average of 1.7% since then. Since 2013, average aid per student has only increased by an average of 0.08%.
So, with the cost of attendance increasing by 4.2% and financial aid increasing only by 0.08% on average since 2013, it seems these out-of-pocket costs are not being reduced by an increase in aid.
In order to get straight to the point, I calculated out-of-pocket expenses as cost of attendance minus the average financial aid offered to a student. This should give a fairly accurate estimate of what students are truly paying out of pocket. Recalling Benson’s statement, this figure should’ve decreased somewhere between 3 and 12 percent in the past 5 years. This doesn’t seem to be the case as seen in the above chart. Actually, the average out-of-pocket cost figure has actually increased by 80.8% since 2013. This translates to an average annual increase of 13% over that 5 year period. Needless to say, that increase outpaces the average rate of inflation over the same time period (1.3%).
It’s hard to tell what data CU was working with when making this claim, but it seems to be far from the truth.
Analysis done in Python 3 with pandas, altair, and numpy.
