College Price Increases Moderate, but Reliance on Borrowing Still Rising

NEW YORK

Price increases at colleges and universities moderated somewhat this
year, but students who need financial aid are still relying
increasingly on loans to pay for higher education, according to figures
released earlier this week by the College Board.

The average cost of tuition and fees at a four-year college hit $5,491
this year, up 7.1 percent from 2004-2005, according to the annual
survey by the nonprofit group. That was the smallest percentage
increase since 2001-2002.

Prices at two-year public colleges rose 5.4 percent to $2,191, while at private schools they rose 5.9 percent to $21,235.

The increases are below levels seen in recent years; last year, prices
at public four-year schools rose about 10 percent, and 13 percent the
year before that. But the cost hikes are still well above the general
inflation rate.

And while many students don’t pay the full “list price,” other figures
released indicate student aid is not keeping up with need.

Student aid from the government and other sources did increase $10
billion to $129 billion in 2004-05, the last year for which aid figures
are available. But for the third straight year, more of the increase
came in the form of loans than from grants, which students do not have
to pay back.

That isn’t necessarily a big problem for many families. Interest rates
are low, and the increased earning power of a college degree is
generally worth the average debt for undergraduate borrowers — $15,500
at public universities for a bachelor’s degree. But it is likely to
compound concerns that families on the margins of being able to afford
college are being priced out.

Including charges for room and board as well as tuition and fees, costs
at public four-year schools rose 6.6 percent to an average of $11,376.
At private four-year nonprofit schools, they rose 5.7 percent to
$27,465.

However, only 12 percent of students are enrolled in colleges where tuition and fees exceed $24,000.

— Associated Press



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