Tuition to increase, aid to decline

Washington Post

WASHINGTON — College students and their parents should brace for sharp tuition increases and declining financial aid as the widening economic downturn begins to hit campuses across the country, higher education officials and analysts said Wednesday.

The warnings came in response to the College Board’s annual survey of tuition and fees, which showed relatively modest increases in the cost for the 2008-09 academic year, with costs rising 1 percent to 3 percent above inflation.

But the report also was based on data collected before June and does not reflect the economic issues now embroiling the nation.

The report found tuition for the year climbed 6.4 percent for in-state students at public four-year institutions to an average cost of $6,585.

Private colleges jumped 5.9 percent to an average of $25,143. The cost of attending community colleges actually declined, after adjusting for inflation, by 0.8 percent to $2,300 for the year.

But with the economic downturn, the American Council on Education, a coalition of more than 1,600 college and university presidents, warned that conditions are increasingly ripe for some of the biggest tuition jumps in more than a decade.

State governments, struggling to balance budgets at a time of plummeting tax revenue, are beginning to slash appropriations to post-secondary institutions. Private schools are also being squeezed as their endowments wither in the stock market and donors grow more cautious with their giving, the group said.

“I am concerned that we are entering a period — as we did following the recession of the late 1980s and early 1990s — when we will see a sharp spike in tuition prices at both public and private institutions,” said ACE President Molly Corbett Broad in a statement.

“Presidents and boards of trustees will be reluctant to increase tuition, but they will likely have little choice.”

At least 17 states have already announced funding cuts to their university systems, Broad said, and she feared worsening state budgets and the market collapse have grown so serious the College Board’s findings could quickly be rendered all but obsolete.

“I am afraid this year’s report may prove only to be a snapshot of a time in history that we might soon be referring to as ‘the good old days,’” Broad said.

The report found that overall aid available to students, including both grants and federal loans, increased for the year, particularly from public programs.

Federal student loans jumped 6 percent, according to most recent available data. But the number of private loans for higher education, which had been climbing, began to shrink even before the current credit crisis.

The report did not address the effects of the recent credit crunch on student lending.