Oct 24, 2006 1:55 pm US/Central
Tuition Hikes Slowing, But So Has Aid
WASHINGTON (CBS News) ―
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College price increases slowed this year but they again topped inflation, and financial aid isn't keeping pace, a new report says.
College price increases slowed this year but they again topped inflation, and financial aid isn't keeping pace, a new report says.
Tuition and fees at four-year public colleges rose $344, or 6.3 percent, to an average of $5,836 for the 2006-07 academic year, according to the College Board's annual "Trends in College Pricing" report, released Tuesday.
Accounting for inflation, prices rose just 2.4 percent — the lowest rise in six years, and the third straight time the gap between prices and overall inflation has narrowed.
Tuition and fees at private four-year colleges rose 5.9 percent overall, to $22,218.
The news that price hikes are getting smaller is tempered by the fact that this decade has been a period of an extraordinary increases in college costs. Published prices are up 35 percent in five years — the largest increase of any five-year period in the 30 years covered by the report.
That's coupled with the reality that grant aid — from the government, colleges and private sources — isn't covering the price hikes. For the 62 percent of full-time undergraduates who receive grant aid, the average net cost of a four-year public school rose 8 percent to $2,700, the report said.
In order to make up the difference, more students are taking out private loans.
As CBS News correspondent Sharyn Alfonsi reported last month, private loans are the fastest-growing form of student aid. In 2004, lenders provided about $14 billion to students, an increase of more than 700 percent from a decade earlier. And in the past five years, the maximum amount students can borrow from the federal loan program hasn't risen a dime — it's stayed at $23,000.
Meanwhile, the financial benefits of a college education persist: The average male college graduate now earns 63 percent more than the average high school graduate, while the average female college grad earns 70 percent more than her high school graduate counterpart, according to the report.
The best news came for people at the nation's public two-year colleges, which educate nearly half of American college students. There, tuition and fees rose just 4.1 percent to $2,272. The increase was limited by California, which is home to more than a fifth of the nation's two-year public college students and lowered tuition and fees 12 percent this year. Elsewhere, prices rose 5.1 percent.
Accounting for financial aid, however, the average net cost nationally for two-year public college students declined, and is less than $100.
At four-year public schools, adding room and board to tuition and fees makes the college prices average $12,796. At private colleges, the price is $30,367.
The cost increases at state schools are baffling to many students and parents, given the relative health of the economy and state finances.
After several years of sharp cuts, state spending on higher education has been rising again nationally. The problem is that more people are enrolling, so there is less and less to spend per student.
(© 2006 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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