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Computation

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 has 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, all students do not 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))
-----------------------------------------------------------------------------------------------------
Total full‐time, degree‐seeking students

The tiered cost calculation was introduced to the IC 500 index beginning in 2006/07. This year, 13 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, this is the lowest number of tiered schools by level. The largest number of tiered schools in the sample in a given year has been 34 and the smallest number prior to this year has been 17. 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
---------------------------------------------
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
1983-84 $ 8,346*
1984-85 $ 9,016*
1985-86 $ 9,751*
1986-87 $10,533
1987-88 $11,312
1988-89 $12,205
1989-90 $13,256
1990-91 $14,294
1991-92 $15,382
1992-93 $16,272
1993-94 $17,247
1994-95 $18,186
1995-96 $19,153
1996-97 $20,121
1997-98 $21,051
1998-99 $22,055
1990-00 $22,991
2000-01 $24,088
2001-02 $25,340
2002-03 $26,734
2003-04 $28,277
2004-05 $29,791
2005-06 $31,465
2006-07 $33,270
2007-08 $35,272
2008-09 $37,208
2009-10 $38,799
2010-11 $40,408
2011-12 $42,168
2012-13 $43,960
2013-14 $45,644
2014-15 $47,321

*Calculations performed retrospectively on historical data.

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  • Independent College 500 Index
  • 11955 Democracy Drive
  • Reston, Virginia 20190-5662
  • Phone: (571) 485-3425
  • Email: jgoldman@collegeboard.org

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