Miller Library at Colby College in Waterville, Maine.
Robert F. Bucati | AP
More than a dozen U.S. universities currently have fixed prices of $100,000 or more per year, but even as prices soar, many of the highest-paying schools are under severe financial strain.
A study by the State Higher Education Executive Officers Association found that tuition revenue is actually declining as costs rise. A 2024 study by the Federal Reserve Bank of Philadelphia also found that increased financial aid, rising operating costs and declining enrollment are creating “severe fiscal headwinds.”
“The closures we’re seeing are indicative of this,” said David Green, president of Colby College in Waterville, Maine. The university has raised more than $1 billion through an ambitious fundraising campaign to ensure long-term financial stability.
Many small universities have already closed in recent years, and this trend is expected to accelerate.
“This is a ticking time bomb in higher education,” Green said.
One problem for many colleges is that despite the high sticker prices, about two-thirds of full-time students receive some form of financial aid. This is necessary to make higher education affordable and achievable.
Emily Cook, an assistant professor of economics at Texas A&M University, said there has been a slow shift in recent years to a “high-tuition, high-aid” model in which universities raise tuition and increase grant aid.
The net price students and their families pay for college is tuition less grants, scholarships, and other aid.
Many of the colleges with the highest sticker prices also offer the most aid, according to The Princeton Review’s Great Financial Aid Rankings for the 2025-26 academic year. Experts say schools do this to attract students and meet enrollment goals — even if it hurts profits.
Highly rated among the “least transparent” economic sectors
Still, the ultimate cost of college is not immediately obvious to students, at least at first. Aid packages are only offered with admissions late in the application process, but even then are often not final.
“It’s very difficult for students applying to college to know how much they’re actually going to pay,” said Preston Cooper, a senior fellow at the American Enterprise Institute, a conservative Washington-based think tank. “Higher education is one of the most uncertain sectors of the economy, comparable to health care.”
“In some schools, the majority of students pay full price,” he says. Cooper’s own recent research (based on the 2023-24 academic year) found that at some of the country’s most expensive institutions, such as Georgetown University and Tufts University, nearly 50% to 60% of students received no grant aid at all.
Cooper said mid-sized private universities are likely to rely on deep tuition discounts to attract applicants.
“Many mid-tier schools understand that they can’t really charge $100,000 and expect to meet the same enrollment numbers as in the past,” he said. “Higher education is changing from a seller’s market to a buyer’s market.”
Often given in the form of merit aid, the average tuition discount for full-time, first-year students at private colleges reached 57% in the 2025-26 academic year, according to a recent report from the American Association of University Executives, a group representing administrative and financial officers at more than 1,700 colleges and universities in the United States.
Colby School’s annual sticker price is approximately $96,120, and the school’s average financial aid package is approximately $77,757. This generous financial aid program is also made possible thanks to a major fundraising campaign.
“At a time when the lack of support for higher education is a national topic, the Colby community is stepping up and demonstrating the power of philanthropy,” said Professor Green. But he said the same results would be difficult to achieve elsewhere. “This is the most successful campaign at a liberal arts college,” he said.
If universities can’t cover their costs over the long term, the financial model will eventually fail, Green said.
“Many private liberal arts colleges now have almost no families paying full salaries,” he said. “It’s a death spiral.”
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