College Tuition Prices Continue to Rise

The cost of a year at college rose faster than inflation and financial aid again this year.

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The cost of higher education continues to climb higher. Even after this year's increase in federal scholarships such as Pell grants, the price students pay out of pocket to attend a typical college this academic year is still around $500 more than last year, the College Board calculated in a report released Monday. And, it turns out, it's also taking students more time (and thus even more money) to earn those degrees.

After subtracting out scholarships and tax breaks, the net cost of spending this academic year at an in-state public college, including tuition, dorms, meals, books and transportation, is averaging $11,900, up 4.1 percent from last year, a rate that was 1.3 percentage points higher than general inflation, estimates College Board economist Sandy Baum. The College Board, a nonprofit association of colleges that oversees tests such as the SATs, surveyed colleges to get their 2007 prices. It estimated the amount of aid students received based on the previous year's data.

The College Board says its research can't fully explain why college prices keep rising faster than inflation. Tuition at a typical public university, for example, has risen almost 10-fold in the last 30 years, from $655 in 1977 to $6,185 this year. One partial explanation is declining government funding of public universities, said Baum, who is an economics professor at Skidmore University. While total state appropriations on higher education have been rising, they haven't been keeping up with booming enrollment, so the contribution per student today is lower than it was 20 years ago, Baum said.

College Board Chairman Gaston Caperton said another engine of inflation may also be students' rising standards of living. Dorm rooms and cafeterias are much nicer today than they were when he attended college, he said. But, he added, "of course, we're worried" about the continuing inflation and the danger that low-income students will be priced out of education.

The good news, however, is that many students who live at home and attend community colleges can still get an education at reasonable costs. After financial aid awards, they are paying an average net tuition cost of only $320 to carry a full course load. Adding $2,191 for books, supplies, and transportation brings the out-of-pocket costs for a year at the lowest-cost college option to $2,511. But even that that's still up 7 percent from last year.

Of course, thousands of students are paying much more because they don't get financial aid. About half of all undergraduates and one third of all full-time students don't get any scholarships to defray their costs. They pay the full advertised sticker price of schools. For example, the average all-in cost for a commuter who doesn't get any aid to attend a community college hit $4,550 this year, up 5.5 percent.

In-state residents who don't get any aid at public universities are paying about $15,500 this year, a rise of almost $900, or 6 percent. And full-price students at private colleges are paying about $34,000, up about $2,000, or 6.1 percent.

The rising one-year prices are only part of the shock awaiting parents. The College Board warns that it now takes the average public university student six years to complete a degree. Private school students are taking an average of five years. That means parents should budget at least $79,000 to get today's freshmen attending in-state public universities through graduation.

Average net cost of tuition, fees, room, board, books, supplies, and transportation, after scholarships and tax benefits are subtracted out

  2006 2007 Increase in $ Increase in %
Community college (living and eating at home) $2,347 $2,511 $164 7.0%
In-state public university $11,412 $11,879 $467 4.1%
Private university $23,777 $24,756 $979 4.1%

At least one third of college students get no scholarships to defray their costs and pay the full sticker prices

  2006 2007 Increase in $ Increase in %
Community college (living and eating at home) $4,319 $4,552 $233 5.4%
In-state public university $14,618 $15,488 $870 6.0%
Private university $32,024 $34,063 $2,039 6.4%

Source: College Board