Saturday, November 20, 2010

As College Fees Climb, Aid Does Too

October 28, 2010

As their state financing dwindled, four-year public universities increased their published tuition and fees almost 8 percent this year, to an average of $7,605, according to the College Board’s annual reports. When room and board are included, the average in-state student at a public university now pays $16,140 a year.

At private nonprofit colleges and universities, tuition rose 4.5 percent to an average of $27,293, or $36,993 with room and board.

The good news in the 2010 “Trends in College Pricing” and “Trends in Student Aid” reports is that fast-rising tuition costs have been accompanied by a huge increase in financial aid, which helped keep down the actual amount students and families pay.

“In 2009-2010, students got $28 billion in Pell grants, and that’s $10 billion more than the year before,” said Sandy Baum, the economist who is the lead author of the reports. “When you look at how much students are actually paying, on average, it is lower, after adjusting for inflation, than five years earlier.”

In the last five years, the report said, average published tuition and fees increased by about 24 percent at public four-year colleges and universities, 17 percent at private nonprofit four-year institutions, and 11 percent at public two-year colleges — but in each sector, the net inflation-adjusted price, taking into account both grants and federal tax benefits, decreased over the period.

Almost everybody has been helped by the federal government’s increased spending on education, Ms. Baum said, either through Pell grants, which provide an average of $3,600 for low-income students, or through tax credits, which go further up the income scale.

The increase in federal support this year was so large that unlike former years, government grants surpassed institutional grants.

“I think that’s an aberration,” Ms. Baum said. “Pell grants are unlikely to grow so rapidly in the coming years, and institutional grants are likely to grow, so I think the ratio will flip back.”

This year, the report found, full-time students receive an average of about $6,100 in grant aid and federal tax benefits at public four-year institutions, $16,000 at private nonprofit institutions, and $3,400 at public two-year colleges.

“The College Board figures are depressing and utterly predictable,” said Terry Hartle, senior vice president of the American Council on Education. “When states cut funding for higher education, tuitions go up to make up for the difference. The good new is that Pell grants will cushion the increases for low-income students, but if you’re not eligible for financial aid, it’s a problem, since very few families are seeing their income go up 8 percent this year.”

Despite the weak economy, and the number of families having trouble paying tuition, the nation’s public universities continue to award most of their institutional aid without regard to financial need. Over all, the report found, 42 percent of the public institutions’ aid is awarded on the basis of need.

That is up from 28 percent the previous year, Ms. Baum said, for reasons that are unclear.

“It might be that they said, look at all these kids who need money, we should be giving more to them,” she said. “Or it might be that because of the recession so many more people have financial need that more of them happen to be getting institutional aid.”

Out-of-state students at public universities this year are paying an average of $19,595 in tuition, with total charges of $28,130, according to the report.

At public community colleges, published tuition and fees rose 6 percent, to an average of $2,713.

And at for-profit institutions, the report found, tuition and fees rose 5.1 percent, to an average of $13,935.

Over the last decade, published tuition and fees at public four-year colleges and universities increased each year at an average of 5.6 percent beyond the rate of inflation.

“We have to figure out how to educate students in a more cost-efficient way,” Ms. Baum said. “We haven’t yet figured out how to use technology to make it cheaper. But we will.”

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