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Wednesday, October 23, 2013

College Board: Public College Tuition Increases Slowing Down

Students at the Sather Gate of the University of California, Berkeley, campus. (Wikimedia Commons)

Students at the Sather Gate of the University of California, Berkeley, campus. (Wikimedia Commons)

It’s not new news that the costs of a college education in this country have been skyrocketing.

But a new report by the College Board shows that the growth rate of tuition and fees is slowing down.

Average in-state tuition and fees rose 2.9 percent this year. That’s the smallest rise in 38 years. Private college tuition rates grew 3.8 percent this academic year.

However, students and families are paying more on average for college because federal financial aid is declining.

Guest

  • Sandy Baum, independent policy analyst for the College Board and co-author of the new report.

Transcript

JEREMY HOBSON, HOST:

It's HERE AND NOW.

Good news from the world of higher education, well, sort of. The growth rate for tuition and fees at public universities is slowing down. That's according to a report out today from the College Board. It says this year's rise in tuition is the lowest increase in more than 30 years.

Sandy Baum is a senior fellow at the Urban Institute, co-author of the report. She joins us now from New York City. Welcome, Sandy.

SANDY BAUM: Hi. It's nice to be here.

HOBSON: Well, it seems like you would think this is good news, right?

BAUM: Well, it's certainly good news that the very high tuition increases that we saw in recent years at public colleges have slowed, and that's very encouraging. It's also good news that students are borrowing a little bit less than they were in the recent past. That said, college prices are continuing to rise faster than average prices in the economy, and students are actually paying a little bit more of that price increase. We have very generous student aid. But while for a few years student aid was increasing rapidly, now that's not so much the case. And students are really paying these price increases on their own.

HOBSON: Well, let's get into the numbers. Tell us first about in-state tuition and what you're seeing across the country in terms of what students who live in the state of the public university that they're going to are paying compared to what they paid in previous years.

BAUM: Right. Well, this year, in the nation as a whole, tuition and fees at public four-year colleges and universities are $8,893. That's about $250 more than it was last year, but it's a 2.9 percent increase. That is a smaller increase than we have seen for almost 30 years. Now, it's very important to note that tuition varies quite a bit across the country so that it depends where you live. You can only be an in-state student in your state of residence. If you live in Wyoming, then tuition and fees are about $4,000. If you live in New Hampshire or Vermont, you're talking about something closer to 14, $15,000.

HOBSON: And all of the states are affected by tight state budgets, which have put a lot of pressure on universities to raise their tuition in recent years. Is that still a problem, because that phenomenon really heated up after the recession, really kicked into high gear.

BAUM: You're right. State budgets are a very big problem. And in the nation as whole, state appropriations for the operation of public colleges and universities are actually 25 percent lower on a per student basis than they were a decade ago after adjusting for inflation. But again, it depends quite a bit where you live. So some states appropriate 15 to $17,000 a year per student. Other states appropriate two, three, $4,000 a year, so varies tremendously.

HOBSON: And, of course, when we talk about the price of tuition, it sort of leaves out a big part of the cost of going to college these days, which is room and board. What did you find about how much that price has gone up?

BAUM: You know, it's really true that room and board is also something that students have to pay for. At public four-year colleges, room and board went up by 3.6 percent, a little over $300. But another piece that we haven't really talked about is the student aid. Most students don't pay these published prices that we're talking about.

ROBIN YOUNG, HOST:

Right.

BAUM: About two-thirds of students are getting grant aid that is reducing that price. So these prices that can sound quite scary, you should take them not at face value and think about all the financial aid that you can get from the federal government, from state government and from the colleges and universities themselves.

HOBSON: But is the increase in financial aid keeping pace with the increase in tuition?

BAUM: This year, the increase in financial aid did not keep pace with the increase in tuition. The federal government increased its grant aid dramatically a couple of years ago, and they're still giving huge amounts of grant aid. But this year, that did not increase. But institutions and states increased their grants a little bit, not enough to cover the increase in tuition and fees. So on average, students are paying more this year than they were last year. That hasn't always been the case. Sometimes, grant aid has increased more rapidly than the published prices.

HOBSON: What did your study find in terms of student enrollment at public four-year colleges? And are more people opting to go to community colleges to save money in some cases?

BAUM: Well, during the height of the recession, we saw enrollments skyrocketing, and we saw that happening particularly at community colleges. Now, what we're seeing is a slight decline in enrollment, particularly at community colleges and in the for-profit sector. And, really, what we think is happening is that there were people who were really struggling in the labor market.

College students - many college students are older adults. We're not just talking about 18-year olds here. So older adults were going back to school to get retrained.

That seems to be receding a bit. And so we do see some enrollment declines, and that helps to explain why the federal government is spending a little bit less this year than they did last year on subsidizing college students.

HOBSON: Sandy, what's the overall takeaway from this report? What does the state of public education in 2013 look like when it comes to the cost?

BAUM: Well, if we look at public education, what we see is that there has been a big shift where states are supporting colleges and universities and their students less than they were a decade ago. The federal government is doing more. But what we're really seeing is that all these things that we thought were spiraling upward in the recession actually are being tempered a little bit. Tuition continues to rise, but more slowly.

Students are still borrowing a lot of money, but that's decreasing a little bit. And so what we see is that we're in a normal sort of state of operation, where we do have to figure out how we're going to pay for college, who's going to pay for it, and what the appropriate public role is. The state role has been cut back, and that is causing problems for students.

HOBSON: Sandy Baum is a senior fellow at the Urban Institute and coauthor of today's report from the College Board. Sandy, thank you so much.

BAUM: Thank you. Transcript provided by NPR, Copyright NPR.


Please follow our community rules when engaging in comment discussion on this site.
  • it_disqus

    The cost of a college education started skyrocketing when the government created the guaranteed student loan
    program. Before the Federal Government got involved the cost was set by
    the free market, thus borrowers and lenders actually had to look at risk
    when loaning money. When there is no risk to those giving loans a flood
    of money comes in on the demand side and thus the cost goes up on the
    supply side. The article said Federal aid is declining and the cost is slowing. Amazing! The housing market crisis we are in was caused by the same
    concept.

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