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College tuition outpaces inflation

By ASSOCIATED PRESS
Published October 23, 2007

The price of college again rose faster than the inflation rate this year, climbing 6.6 percent at four-year public schools and outstripping increases in financial aid.

The latest increases, reported Monday by the College Board, bring the average list price of four-year public universities to $6,185 this year, up $381 from 2006-07. At four-year private colleges, tuition and fees rose 6.3 percent to $23,712.

"Surely, the day will come - soon - when parents say enough is enough," said James Boyle, president of the group College Parents of America.

Public two-year colleges - which educate about half of American college students - again got the best marks for keeping a lid on price increases. Their average price rose 4.2 percent to $2,361. Accounting for aid, their average net cost is only $320 per year.

At private colleges, net cost this year averages $14,400 - up $638 from a year ago.

"The average price of college is continuing to rise more rapidly than the Consumer Price Index, more rapidly than prices in the economy," said Sandy Baum, a co-author of the report.

Students typically borrow as much as allowed from the federal government, then turn to private student loans. A decade ago, nonfederal loans accounted for about 6 percent of student aid, but last year they were 24 percent.

Including room and board for students living on campus, charges for public four-year colleges were $13,589, or 5.9 percent higher than last year. At private four-year schools, average total charges come to $32,307.

The College Board's report does not try to explain why prices keep going up.

A recent paper by Mark Kantrowitz, publisher of the financial aid Web site finaid.org, tried to estimate how much a four-year college degree would have to cost before it would no longer be a good investment, given the $1.2-million increase in expected lifetime earnings that comes with a bachelor's degree. His answer: $520,000 - or $130,000 a year.

FAST FACTS

Out of pocket

The published price is not the real price for many students, thanks to financial aid, but the net price is rising, too. On average, accounting for grants and tax breaks, the net price for full-time students at four-year public universities this year is $2,580. That's about $160 more than last year.

[Last modified October 23, 2007, 00:17:33]