College Costs Go Up; Student Aid Goes Down

The College Board released two reports today that focus on trends in college tuition prices as well as the state of student financial aid. The reports show that tuition costs are up for both public and private colleges and universities. Federal student aid is not quite keeping up with the increases when adjusted for inflation, despite new grant programs. The student aid report also shows that more and more students are borrowing from the private sector.

The report, "Trends in College Pricing 2007" shows that tuition costs for public colleges and universities have increased in the last year, but that the increases are slightly lower than the average tallied over the last five years. "Trends in Student Aid 2007" reports that aid is up, but when adjusted for inflation, aid packages are lower than past years.

Private colleges and universities are showing similar trends, but the 2007-2008 price hike is actually higher than the five-year average. Still, the increase in costs at private institutions is slightly lower than the increases as public institutions, percentage-wise. At public universities, the increase in tuition and fees is 6.6 percent, whereas at a private four-year school the tuition and fees increase is 6.3 percent. When other costs are factored in, such a room and board, both public and private costs have increased the same amount, just under 6 percent (5.9). The total charges for out-of-state students at public schools increased slightly less at 5.4 percent. Of course, these numbers are an average across the country. The reports show that some students are only experiencing a 3 percent increase, and others are seeing increases in the 9 percent range.

When it comes to student aid, grant aid has increased only 4 percent for students, with the school themselves contributing over 40 percent of the grant aid available to students. Federal grants equal 31 percent of total grant aid. Federal loans fell in the last two years, whereas students borrowing from private sources have increased. The subsidized Stafford Loans, in which the Department of Education pays the interest on the loans, have declined by more than 20 percent in the last decade.

The Student Aid report also shows that more tax credits and tax deductions are going to high-income families rather than families with household incomes less than 50,000 dollars. For example, less than 20 percent of the tuition tax deductions go to families making less than $50,000 and 47 percent of those deductions were taken by those families with incomes over $100,000.

The House Committee on Education and Labor issued a press release today commenting on the new reports. The Committee Chairman, George Miller (D-CA) said, "There is no question that this college cost crisis stands to hurt not just students and families, but also our nation's competitive edge in a global economy." He continued to add, "With the recent enactment of the College Cost Reduction and Access Act, the Democratic Congress has provided urgently needed financial help to students and families trying to pay for college. But as this report reminds us, there is still a great amount of work to be done."

Source: College Board, US House Committee on Education and Labor