A Costly Cap and Gown

Not even inflation can keep up with college tuition hikes.


After subtracting out scholarships and tax breaks, students and parents are shelling out an average of $13,727 for tuition, dorm, books, and pizza at the typical public university this year. That's about $500 more than they spent last year, and a 4.4 percent rise, which means college prices are continuing to outpace the general inflation rate of 2.8 percent, according to the results of an annual survey the College Board released last week.

For the half of all students who get no scholarships or grants, the price increases are even more painful. Students attending private schools are paying an average of $35,000 this year, up about 6 percent from last year. Full-pay students at public universities are paying about $17,000, also up 6 percent from last year. Those who live at home and take a full course load at community college are paying an average of $4,550 for tuition, books, and transportation, up more than 5 percent from last year.

Worse, since it is now taking the average public university student more than six years to graduate, the cost of a public college degree is now more than $90,000, about 25 percent more than it was for the freshmen of five years ago.

No relief. There are a few nuggets of hope in the report: Community colleges remain a relative bargain, especially for those who get financial aid. And a few colleges are bucking the trend by actually lowering their prices.

But Jim Boyle, president of the College Parents of America, says the realities of supply and demand very likely will keep pushing most colleges to raise their prices. The number of 18-year-olds planning to attend college will set new records annually for the next several years. In addition, today's college students want nicer dorms and fancier gyms than those their parents had, which will accelerate cost increases. "I don't see any relief in sight," he says.

Indeed, officials at Champlain College, in Burlington, Vt., say that despite their $6,300, or 39 percent, increase in tuition for this year's freshmen, applications were up 27 percent. Mary Kay Kennedy, vice president of enrollment and student life, says Champlain used to be one of the lowest-cost private colleges in New England. By raising tuition to $22,550 a year, the school now costs about the same as its competitors, she says. Although Champlain is giving some of that increase back to students in the form of scholarships, it is keeping most of the money to hire more full-time teachers and build study-abroad campuses in Dublin and Montreal.

The good news, however, is that many students who live at home and attend community colleges can still get educations at reasonable costs. After financial aid awards, commuter students 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.

And a few schools are experimenting with price cuts. Blackburn College in Carlinville, Ill., announced earlier this year it would slash the cost of its tuition for next year's freshmen by $2,270, or 15 percent. It's a risky strategy, since many more schools have succeeded by taking advantage of the "Chivas Regal effect"—raising prices and upgrading at least the appearance of quality. But Blackburn College President Mim Pride was concerned about Blackburn's low graduation rate. Just 29 percent of the private school's students graduated in four years. Research showed that about one quarter of the students who received financial aid weren't getting enough. "They really couldn't afford to be at Blackburn" and thus were dropping out for financial reasons, she says. She's hoping that cutting the price for tuition, fees, room, and board to about $15,000 a year will mean more students can afford to finish. At the very least, she's hoping the lower prices will make her staffers' lives easier. In the past several years, they have spent more and more time haggling with students and parents over financial aid, she says. Affordable tuition and less hassle for colleges are something everyone can toast.

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