Friday, December 4, 2009

College Tuition Costs Continue to Rise

Posted by: Janielle Viggiano

According to BusinessWeek, “This year's College Board report shows average increases of 6.5% for public in-state tuition and 4.4% for private colleges. The consumer price index declined 2.1% between July 2008 and 2009, meaning that inflation-adjusted increases in prices this year are significantly larger than current dollar increases, the College Board says. The spiraling cost of higher education comes at a time when institutions are reeling from the aftershocks of shrinking state aid, battered endowments, and significant budgetary pressures. Schools managed to temper some of these increases by doling out more institutional aid and grants to students, a move that made the sticker price less painful for the 18.5 million students projected to attend college this year (2009).”

College prices rose again in the fall of 2009. The increases in price were due to painful cost cutting by colleges in everything from faculty to sports travel and cafeteria. Some surprising findings on the increase in college tuition include:

  • Increases in spending were driven mostly by higher administration, maintenance, and student services costs. Public universities spent almost $4,000 per student per year on administration, support, and maintenance in 2006, up more than 13 percent, in real terms over 1995. And they spent another $1,200 a year on services such as counseling, which was up 23 percent. Meanwhile, they spent about $8,700 a year on classroom instruction for each student, up about 9 percent.
  • Big private universities, powered by tuition and endowment increases, have increased spending dramatically while public schools have languished. Total educational spending per student at private research universities has jumped by almost 10 percent since 2002 to more than $33,000. During that same period, public university total spending was comparatively flat and totaled less than $14,000 a year.
  • That growing gap between rich schools and poor schools worries observers like Wellman. The cost of attending a public university, even after subtracting out aid and inflation, rose more than 15 percent in the last five years, according to the College Board. But almost all of the recent price increases at public universities are "backfilling for cuts in state funds," Wellman says. (US News, Clark, 2009)

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