The cost of a college degree from a four-year public university is increasing more rapidly.

Over time, the average cost of a college education in the U.S. outpaced the rate of inflation. College costs increased, on average, by one and half to two percentage points more than the percentage increases in the consumer price index. According to a report released by the College Board, when adjusted for inflation, the typical costs of a private, four-year university rose by about three percent each year since the 1980s. During the 1990s and between the years 2000 and 2006, the annual costs of a public, four-year university increased by about four percent.

Inflation Rates
o According to the FinAid website, since 1958 the college tuition inflation rate is significantly higher than the general inflation rate. Between 1992 and 2001, college costs increased at a rate that was 2.01 percentage points higher than the consumer price index. While general inflation was 2.37 percent, college tuition prices rose by 4.77 percent. When adjusted for inflation, the average cost of a college degree increased by roughly 3.21 percent between the years 1985 and 2001. From 2001 to 2005, the tuition inflation rate declined below six percent, as the consumer price index fell to about three percent.

Net Prices
o The net price of a college education is the amount paid after deductions for tax credits, grants and scholarships. According to a 2007 New York Times article, the net price of a college degree still largely outpaces the average rise in all other types of consumer products and services. Prior to 2007, public colleges saw an average increase of about 8.8 percent in net prices, while private schools experienced an increase of 6.7.

Public Funding
o A decline in government funding and public aid is to blame for the sharp increases in the average tuition costs at public universities, according to David Ward, president of the American Council on Education. When schools lose funding, they must make up for that budget deficit by raising tuition prices. The sticker price of the average four-year public university rose by more than 65 percent between 1991 and 2009. Average prices only increased by about 30 percent during the same time frame, after taking into account deductions for financial aid. Family income only increased by about 17 percent.

Financial Aid
o When adjusted for inflation, federal grant funding fell between the years 2005 and 2006. The average Pell grant size of $4,050 remained steady during the early 2000s. Increases enacted by U.S. Representatives during 2007 expect the amount to reach $5,400 by the year 2013. Private loan borrowing by both parents and students is increasing faster than federal student loans as college tuition costs continue to become less affordable.