The Miller Library at Colby College in Waterville, Maine.
Robert F. Bukaty | AP
Over a dozen U.S. institutions now list annual sticker prices exceeding $100,000, yet many of these high‑cost colleges face serious financial pressure.
Despite climbing tuition, overall tuition revenue has declined, according to the State Higher Education Executive Officers Association. Rising financial‑aid expenditures, higher operating costs, and falling enrollment have created “serious financial headwinds,” a 2024 Federal Reserve Bank of Philadelphia study also found.
“The closures we are witnessing reflect this trend,” said David Greene, president of Colby College in Waterville, Maine, which has secured more than $1 billion through an ambitious fundraising effort aimed at ensuring long‑term fiscal stability.
Several small colleges have already shut down in recent years, and that pace is expected to quicken.
“This is a ticking time bomb for higher education,” Greene added.
One challenge for many colleges is that, although sticker prices are soaring, roughly two‑thirds of full‑time students receive some form of financial aid, which is essential to make higher education affordable and attainable.
Over time, institutions have gradually moved toward a “high‑tuition, high‑aid” model, raising prices while expanding grant assistance, noted Emily Cook, an assistant professor of economics at Texas A&M University.
The net price that students and families actually pay equals the published tuition minus grants, scholarships, and other aid.
Many of the colleges with the highest sticker prices also award the largest aid packages, according to The Princeton Review’s Great Financial Aid rankings for the 2025‑26 academic year. They do so to attract applicants and meet enrollment goals, even when it erodes profitability, experts observe.
Higher education ranks among the least transparent sectors of the economy
Nevertheless, the true cost of college often remains unclear to prospective students at the outset. Aid offers typically arrive with admission letters, late in the application cycle, and may still change thereafter.
“Figuring out the actual amount you’ll pay can be very difficult for applicants,” said Preston Cooper, a senior fellow at the American Enterprise Institute, a conservative think tank in Washington. “Higher education is one of the least transparent parts of the economy, comparable to healthcare.”
“At some schools, the majority of students pay the full sticker price,” he noted. At several of the nation’s most expensive institutions—such as Georgetown University or Tufts University—approximately 50 % to 60 % of undergraduates receive no grant aid, according to Cooper’s recent research based on the 2023‑24 academic year.
Mid‑tier private colleges frequently rely on substantial tuition discounts to draw applicants, Cooper observed.
“Many of these mid‑range schools have realized that charging $100,000 will not yield the enrollment levels they once enjoyed,” he said. “Higher education is shifting from a seller’s market to a buyer’s market.”
Typically delivered as merit aid, the average tuition discount for first‑time, full‑time students at private colleges reached as high as 57 % for the 2025‑26 academic year, according to a recent report by the National Association of College and University Business Officers, which represents administrators and financial officers at over 1,700 U.S. colleges and universities.
At Colby, the published sticker price is about $96,120 per year, while the average financial‑aid award is roughly $77,757. The college’s generous aid program is made possible in part by its extensive fundraising campaign.
“At a time when the national conversation often highlights insufficient support for higher education, the Colby community has demonstrated the impact of sustained commitment and philanthropy,” said Greene. He added, however, that replicating this success elsewhere would be challenging. “It represents the most successful fundraising campaign ever undertaken by a liberal arts college,” he remarked.
If institutions cannot cover their costs over the long term, the financial model will eventually collapse, Greene warned.
“A significant number of private liberal arts colleges today have virtually no families paying the full price,” he said. “That situation constitutes a downward spiral.”