(Bloomberg) -- College is finally getting a little cheaper as the pandemic reshapes the world of higher education.
The consumer price index for college tuition and fees fell 0.7% in August from the prior month, the steepest drop since 1978, according to a Labor Department report Friday. On a year-over-year basis, the index was up just 1.3%, the smallest increase on record.
Even with the drop, college costs have surged in the last two decades, far outpacing inflation. The median published tuition and fee price at a four-year institution came to $12,710 in the 2019-2020 school year, according to the College Board. Over the last 20 years, the price index for tuition and fees has increased 164%, compared with 50% for the broader CPI. The component accounts for about 1.6% of the CPI.
The Covid-19 pandemic has upended higher education, and many students are attending virtual classes instead of sitting in classrooms with professors. With health risks in mind, numerous schools have also chosen to limit or even cancel an array of typical student activities including sports for those attending in-person classes.
As a result, some schools have worked to soften the blow by skipping scheduled tuition hikes or even cutting the costs. Many colleges also offered refunds for room and board when they sent students home in March due to worries about the spreading pandemic.
Williams (NYSE:WMB) College reduced its cost by 15% on a one-time basis for the coming academic year. Princeton University also approved a 10% tuition reduction for all undergraduate students for the 2020-21 school year.
Georgetown University approved a 10% tuition cut for the fall semester for students who are learning remotely, and the College of William & Mary is rolling back a previously adopted increase for incoming in-state undergraduates.
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