Report : Tuition, fees go up 6.3%

Financial aid isn't keeping pace with the increases.
ASSOCIATED PRESS
It's what passes for good news right now for students and parents: This year, the price of college went up only somewhat faster than the cost of everything else.
Tuition and fees at public four-year public colleges this fall rose 344, or 6.3 percent, to an average of 5,836, according to the College Board's annual "Trends in College Pricing" report, released Tuesday.
Accounting for inflation, the increase was just 2.4 percent, the lowest in six years.
But published prices are up 35 percent over the last five years -- the largest such increase since the College Board began keeping data in the 1970s. And even though most students don't pay that full list price, financial aid isn't keeping up.
"When public companies face budget shortfalls, they search for ways to become more efficient, and to cut their costs," said James Boyle, president of the group College Parents of America. "For colleges and universities to continue to hold the public trust, they must also look for ways to hold down their costs, and not simply continue to raise the price they charge to students and their families."
Actual costs 8 percent higher
Accounting for grant aid -- from the government and other sources -- the actual cost for the typical student is substantially lower than the sticker price: about 2,700 in 2006-07. But that's 8 percent higher than last year.
At private four-year colleges, published tuition and fees rose 5.9 percent, to an average of 22,218. Accounting for financial aid, their net price is 13,200.
Public two-year colleges, which educate nearly half of American college students, had the best showing. There, tuition and fees rose just 4.1 percent to 2,272. Price reductions in California, home to more than a fifth of the nation's two-year public college students, checked the average increase nationally.
Community colleges remain a tremendous bargain relative to other schools. Accounting for financial aid, the College Board estimates their average net cost actually declined this year, and is less than 100.
At the four-year state school level, the price increases baffle many students and parents because state finances are fairly healthy. Spending by states on higher education has increased nearly 10 percent over the last two years, or by about 6 billion. But the extra funds have merely slowed tuition increases, not stopped them.
Grant aid
Spending from all sources on student aid rose 3.7 percent last year to 134.8 billion. Over the last decade it has nearly doubled, even accounting for inflation. But on a per-student basis, grant aid is only inching upward. Students are borrowing the rest, often from private lenders.
The trend hardly existed 20 years ago, but now "about 20 percent of the loans students are getting, they're getting from banks," said College Board senior policy analyst Sandy Baum. Average debt levels are still manageable, she said, but some students are in over their heads.
In 2005-06, more students received Pell Grants -- the government's main aid program for low-income students -- than the year before, but total funding and the average award per student declined. Pell Grants now cover just 33 percent of four-year public college tuition.
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