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Tiered Costs

The IC 500 computation is derived using costs for first-year full-time students in the case of most schools. The exception is for schools that have varying tuition and fees for students depending on the student’s year in school or level. Unlike other schools in the sample, in the cases of these tiered tuition and fees schools, not all students pay the same tuition and/or fees.

Schools may institute this pricing structure in order to offer a fixed and guaranteed tuition and fee rate to students for more than one year or to raise costs for a sub-population of students rather than instituting an across-the-board tuition and/or fee increase.

These institutions are identified through a question in the Annual Survey of Colleges. For these institutions, the College Board uses a weighted average based on different tuition and fees structure by tier and enrollment to determine average costs for the IC 500 index. The goal of using a weighted average as opposed to the costs for just first-year students is to get a true overall average figure for tuition and fees that are paid by all full-time students.

Calculating weighted average for undergraduate costs:

  • For each cost tier, multiply cost and corresponding enrollment
  • Find sum of all costs by tiers
  • Divide by total enrollment

This can be represented by the following formula:

((Tier1*number of students in Tier1) +…+ (Tier (n)*number of students in Tier (n))
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Total full-time, degree-seeking students

The tiered cost calculation was introduced to the IC 500 index beginning in 2006-07. This year, 8 of the 500 institutions in the sample were tiered by level. The mix of institutions that are tiered by level is highly fluid. Since we instituted this process, the number of institutions using a tiered cost structure has varied from a low of 8 to a high of 34. Some schools have remained tiered every year. Other schools change their pricing structure from tiered to one fee for all students from year to year and vice versa.

Calculating the Independent College 500 Index

The IC 500 is calculated by dividing the sum of the total direct charges (TDC) for the year being reported (y) by the total number of undergraduates enrolled (E) during the previous year (y-1). This can be represented by the following formula:

IC 500 = Sum of TDC for the 500 institutionsy
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Sum of E for the 500 institutionsy-1

Although the College Board did not issue an IC 500 prior to the 1986-87 academic year, this table can be used to compare the approximate values that would have been associated with such an index over a 30-year period:

Year IC 500 Annual Increase
1983-84 $ 8,346* N/A
1984-85 $ 9,016* 8.03%
1985-86 $ 9,751* 8.15%
1986-87 $10,533 8.02%
1987-88 $11,312 7.40%
1988-89 $12,205 7.89%
1989-90 $13,256 8.61%
1990-91 $14,294 7.83%
1991-92 $15,382 7.61%
1992-93 $16,272 5.79%
1993-94 $17,247 5.99%
1994-95 $18,186 5.44%
1995-96 $19,153 5.32%
1996-97 $20,121 5.05%
1997-98 $21,051 4.62%
1998-99 $22,055 4.77%
1990-00 $22,991 4.24%
2000-01 $24,088 4.77%
2001-02 $25,340 5.20%
2002-03 $26,734 5.50%
2003-04 $28,277 5.77%
2004-05 $29,791 5.35%
2005-06 $31,465 5.62%
2006-07 $33,270 5.74%
2007-08 $35,272 6.02%
2008-09 $37,208 5.49%
2009-10 $38,799 4.28%
2010-11 $40,408 4.15%
2011-12 $42,168 4.36%
2012-13 $43,960 4.25%
2013-14 $45,644 3.83%
2014-15 $47,321 3.67%
2015-16 $49,037 3.63%
2016-17 $50,630 3.25%
2017-18 $52,384 3.46%
2018-19 $54,078 3.23%

*Calculations performed retrospectively on historical data.