WSJ: College Tuition Costs Increase At Twice the Rate of Inflation [View All]

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College Tuition Costs Increase At Twice the Rate of Inflation

Many Students Are Relying More Heavily on Loans; A Quarter Use Credit Cards
By JOHN HECHINGER
Staff Reporter of THE WALL STREET JOURNAL
October 19, 2005; Page D3

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In the latest sign of spiraling higher education costs, the College Board reported yesterday that college tuition and fees rose from a year ago at twice the rate of inflation. In its annual survey on college pricing and financial aid, the nonprofit education group also found that students are relying more heavily on student loans rather than outright grants. This marks a worrisome trend since rising interest rates have made borrowing more expensive. As a result, a college degree will cost thousands of dollars more in interest expenses after graduation.

According to the survey, tuition and fees at four-year public universities are up 7.1% from a year ago, with the average bill at $5,491. A year at a private nonprofit school costs an average of $21,235, up 5.9%. Add in room and board, and a year at a public university will set a student back an average of $12,127, while a private school's bill comes in at an average of $29,026. Though more moderate than in recent years, the increases show that education remains one of the few parts of the U.S. economy where hefty price increases are the rule.

The growing financial burden is likely to fuel concerns about affordability of college educations for middle-class and working-class families -- and spur proposed legislation to limit higher education costs. Rep Howard P. McKeon (R., Calif.) has sponsored a bill requiring colleges that consistently raise their tuition and other costs by more than twice the inflation rate to publicly disclose their expenses and what they are doing to keep them down. The proposal is part of broader higher-education legislation, expected to pass early next year.

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And federal money often isn't enough to pay the bills. The average recipient of a Pell grant receives about $2,500 annually, while the average Stafford loan borrower gets about $3,000. Although the combined total of $5,500 might cover tuition at a state school, it would hardly cover books, room and board, and transportation, let alone the fees at a pricey private college.

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