College Prices Up Again as Economy Falters

Amid the economic turmoil, students and families arent getting much relief from rising college costs, which jumped 6.4 percent this fall, according to new statitistics out Wednesday. With states aggressively cutting budgets, big increases look almost definite next year, too - if not sooner. At least two states - Rhode Island and Michigan have already taken steps toward raising prices before next fall, and a half-dozen others are reportedly considering out of the ordinary midyear increases. For the current academic year, the average list price of tuition and fees at four-year public universities rose almost $400 to $6,585. At private colleges, prices rose 5.9 percent to $25,143, according to the annual "Trends in College Pricing" report from the College Board. It's important to remember many students don't pay the full list price. On average, students receive about $3,700 in grants and tax benefits at four-year public schools, and $10,200 at private institutions. And while full costs at some private institutions run $50,000 a year or more, more than half of four-year college students attend institutions costing under $9,000. Still, while spending on financial aid is increasing, it isn't rising fast enough to hold down the net price. The report emphasized that, accounting for overall inflation, prices rose less than 1 percent this year, and actually declined at public two-year colleges. But that's only because overall inflation was unusually high - about 5.6 percent. The College Board also reported that the amount of private borrowing - the loans students take out on top of federal aid - declined slightly last year. It was the second straight year the College Board reported lower private borrowing, after years of double-digit increases that fueled worries about student debt.

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YouTube | November 1, 2008

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