College Board: States' money strains = higher public college costs

Students at public colleges and universities are bearing a higher increase in tuition and fees this school year than students at other types of institutions, the College Board reported today. 

In its report, Trends in College Pricing 2009, the not-for-profit organization reports that overall costs for in-state students in four-year public colleges average $7,020 in the 2009-2010 school year, an increase of $429. Total charges, including tuition, fees, room and board, are up 5.9 percent, to $15,213. 

Out-of-state tuition and fees for four-year public colleges and universities average $18,548, a rise of 6.2 percent over the prior school year. Average total charges are $26,741, up 6 percent. And tuition and fees at public two-year schools are up 7.3 percent, to $2,544 a year. 

The increases in public college costs, the Board notes, occur against a backdrop of lower state education appropriations and higher enrollment. State appropriations for the 2008-09, the last school year for which data are available, did not keep up with inflation has they had done in prior years. Per student, the average $7,953 appropriation was $1,100 less in constant dollars than a decade earlier. 

Private, not-for-profit, four-year colleges increased their tuition and fees the least, 4.4 percent, to an average, $26,273. With room and board, these schools charge the most, on average: $35,636. 

The good news and the bad

On the positive side, students rarely pay the published prices, the report says. About two-thirds of all students receive grants; among students in public institutions, the average grant was $5,400, leaving a net cost of around $1,600. Students in private colleges received, on average, $14,400 in grant aid and tax benefits, reducing their out-of-pocket bill to about $11,900. More students are taking advantage of federal Pell grants, Hope tax credits and other forms of financial aid that increase affordability. They're also moving away from higher-interest private loans, which generally offer less generous repayment options than government loans.

A companion report, Trends in Student Aid 2009, notes that assistance to lower-income students attending two-year public colleges actually is enough to cover tuition and fees. But other costs–for books and living expenses–still can strain affordability, said Sandy Baum, an economist and senior policy adviser at the College Board, at a press conference today. "The gap they feel is still growing," she said. "We face a complex problem in figuring out how to help students cover all the expenses while they're in school." 

Baum said tax credits aimed squarely at those making $50,000 to around $100,000 dispel the "myth" that middle-class families bear the brunt of college funding because they don't qualify for more aid but can't afford to pay full freight. Further, colleges provide a great deal of aid to middle-income students, Baum said. "There's a lot of financial aid out there," she added. "It's needed and complicated, and you have to do some digging to understand how to pay for college."

Click here for ideas on saving money on college application fees, and here for one college student's tips for saving money at college.–Tobie Stanger