Amid the economic turmoil, students and their families are getting little relief from rising college costs, which jumped 6.4 percent at state universities this fall, according to new figures out Wednesday.
And with states aggressively cutting budgets, big increases look almost certain next year, too — if not sooner. At least two states — Rhode Island and Michigan — already have taken steps toward raising prices before next fall, and a half-dozen others are reportedly considering unusual midyear increases.
For the current academic year, the average list price of tuition and fees at four-year public universities rose $394, or 6.4 percent, to $6,585 for in-state students. At private colleges, prices rose $1,399, or 5.9 percent, to $25,143, according to the annual “Trends in College Pricing” report from the College Board.
It’s important to remember many students don’t pay the full list price. On average, students receive about $3,700 in grants and tax benefits at four-year public schools, and $10,200 at private institutions.
When room and board is added in, some high-tuition private institutions can total $50,000 a year or more. Overall, though, more than half of four-year college students attend institutions where the list price for tuition and fees is under $9,000.
How inflation fits in
Still, while spending on financial aid is increasing, it hasn’t kept up with price increases.
The report emphasized that, accounting for overall inflation, prices rose less than 1 percent this year, and actually declined at public two-year colleges. But that’s only because overall inflation was unusually high — about 5.6 percent.
“No one really thinks it’s easier to pay for college just because other prices have gone up,” said Sandy Baum, economics professor at Skidmore College and senior policy analyst at the College Board. While families may postpone other big-ticket items, “It’s harder to wait to go to college than to wait to buy a car,” she said.
Public two-year colleges once again were the biggest bargain — and did the best job holding down prices. Average list prices there rose $108, or 4.7 percent, to $2,402. But factoring in financial aid, the College Board estimates the average net cost is only about $100.
The College Board also reported that the amount of private borrowing — the loans students take out on top of federal aid — declined slightly last year. It was the second straight year the College Board reported lower private borrowing, after years of double-digit increases that fueled worries about student debt.
Baum attributed the decline to expanded eligibility for government loans, which have lessened the need for students to borrow from private lenders. But it also reflects private lenders tightening credit requirements — especially if parents won’t co-sign the loan.
“To the extent that it’s demand side, that fewer people want private loans because they can get the money from the federal government, that’s clearly a good thing,” Baum said.