College Tuition Rising at More Than Double the Inflation Rate

Tuition and fees at public and private colleges and universities rose at more than double the rate of inflation, the College Board said in reports released Monday morning.

One report found that while the pace of increase has held steady at four-year private institutions, it has picked up at public ones.

The increases in the cost of higher education continue to drive up the amount that students and families borrow, with the greatest increase coming in private loans, according to a separate College Board report also released this morning.

Tuition and other costs, not including room and board, rose to an average of $6,185 at public four-year colleges this year, up 6.6 percent from last year, while average tuition at private colleges hit $23,712, an increase of 6.3 percent. At public two-year institutions, average tuition and fees rose 4.2 percent to $2,361.

Last year, tuition and fees at public institution rose by 5.7 percent; at private ones, by 6.3 percent and at public two-year institutions, by 3.8 percent.

“The average price of college is continuing to rise more rapidly than the consumer price index, more rapidly than prices in the economy,” Sandy Baum, a co-author of the report who is a senior policy analyst for the College Board and a professor at Skidmore College, told reporters at a news conference on Monday morning. She added that the prices “are probably higher than most of us want them to be.”

Those price hikes reflect increases in the sticker price that colleges advertise, though, Baum said, the average student does not pay that full amount. At public universities, the average student gets about $3,600 in grants and tax benefits, lowering the actual cost to around $2,600. At private institutions, aid totals about $9,300, bringing the cost to $14,400.

But even the net price, after taking into account grants and other forms of aid, is rising more quickly than prices of other goods and than family incomes. In recent years, consumer prices have risen by less than 3 percent a year, while net tuition at public colleges has risen by 6.6 percent and at private ones, 4.6 percent.

The changes in tuition at public institutions closely track changes in financing they receive from state governments and other public sources, the report found. When state and local support for public colleges declined over the last seven years, tuition and fees rose more quickly, and as state support has grown of late, the pace of increases fell, it said.

“We hope that state governments — which really set tuition prices at most public colleges and universities — will do their part to reinvest in higher education,” David Ward, president of the American Council on Education, said in a statement released by the College Board.

Private loans, those not guaranteed by the federal government, continued to be the fastest growing form of borrowing, totaling more than $17 billion in the 2006-07 academic year. In the same period, students and their families borrowed $59.6 billion in federally guaranteed loans.

The report on borrowing also included data on loans by full-time students at for-profit institutions, finding that in 2003-04, they took out an average of $6,750 in loans, approaching the $7,320 borrowed by students at private colleges, $5,390 by those at public four-year institutions and $3,180 at public two-year ones.

Last year the average Pell grant, the federal government’s grant to the neediest students, declined for the second year in a row, after taking into account the effects of inflation. Baum, the economist, said she expected that decline to halt because Congress recently enacted increases in the maximum amount of the grant, which had held constant at $4,050 for four years.

“The grants for low-income students haven’t been growing fast enough,” Baum said. As a result the share of tuition that a Pell grant can cover has declined steadily. The increases mandated by Congress will gradually boost the maximum Pell grant to $5,400 over the next five years, helping to preserve its purchasing power, Baum said.

The College Board’s study drew on responses from 2,976 institutions to questionnaires sent out last October, as well as government agencies and organizations like the National Association of College and University Business Officers.

According to the study, the cost of room and board has also continued to rise and at many public colleges dwarfs actual tuition. At four-year public institutions, tuition, room and board on average now total $13,589; at private colleges, $32,307.

Ms. Baum emphasized that while the College Board reports provide information on what is happening in general to the cost of higher education, students and parents should not base their expectations on the reports. Costs vary in different parts of the country as well as at different kinds of colleges, she said.

“The average numbers don’t tell the story for any individual student,” Ms. Baum said.