Archive for Wednesday, October 26, 2011

As states cut budgets, tuition rises

October 26, 2011


It’s a kick in the gut even for students and families hardened to bad financial news: Average in-state tuition and fees at four-year public colleges rose an additional $631 this fall, or 8.3 percent, compared with a year ago.

Nationally, the cost of a full credit load has passed $8,000, an all-time high. Throw in room and board, and the average list price for a state school now runs more than $17,000 a year, according to the twin annual reports on college costs and student aid published today by the College Board.

Helping drive the national numbers were huge tuition increases at public universities in California, which enrolls 10 percent of public four-year college students and whose 21 percent tuition increase this year was the largest of any state.

But even without California, prices would have increased 7 percent on average nationally — an exceptional burden at a time of high unemployment and stagnant family incomes.

The large increase in federal grants and tax credits for students, on top of stimulus dollars that prevented greater state cuts, helped keep the average tuition-and-fees that families actually pay much lower: about $2,490, or just $170 more than five years ago. But the days of states and families relying on budget relief from Washington appear numbered. And some argue that while Washington’s largesse may have helped some students, it did little to hold down prices.

“The states cut budgets, the price goes up, and the (federal) money goes to that,” said Patrick Callan, president of the National Center for Public Policy and Higher Education. “For 25 years we’ve been putting more and more money into financial aid, and tuition keeps going up. We’re on a national treadmill.”

Terry Hartle, senior vice president at the American Council on Education, which represents colleges in Washington, said the cause of the price increases for the 80 percent of college students who attend public institutions is clear. State appropriations to higher education declined 18 percent per student over the last three years, the College Board found, the sharpest fall on record.

“To see increases of 20 percent, as we saw in California, to see gains of 15 percent in other states, is simply unprecedented,” Hartle said. “Tuition is simply being used as a revenue substitute in many states.”

The latest report comes with concerns about student debt front and center among many of the Occupy Wall Street protesters. Meanwhile, President Barack Obama planned to announce a new measure today to help borrowers of student loans. The administration plans to accelerate from 2014 to 2012 a new income-based repayment option that will bring monthly payment caps down from 15 percent of discretionary income to 10 percent. It also plans to allow 5.8 million borrowers who are paying back two kinds of government loans — federal direct loans and loans from the old Federal Family Education Loan Program — to consolidate them, which could lower monthly payments.

The College Board reports roughly 56 percent of 2009-2010 bachelor’s degree recipients at public four-years graduated with debt, averaging about $22,000. At private nonprofit universities, the figures were higher — 65 percent and around $28,000.


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