College tuition costs climbing again this fall

College tuition costs shot up again this fall, and students and their families are leaning more on the federal government to make higher education more affordable in tough economic times, according to two reports issued Thursday.

At public four-year schools, many of them ravaged by state budget cuts, average in-state tuition and fees this fall rose 7.9 percent, or $555, to $7,605, according to the College Board's "Trends in College Pricing." The average sticker price at private nonprofit colleges increased 4.5 percent, or $1,164, to $27,293.

Massive government subsidies and aid from schools helped keep in check the actual price many students pay. But experts caution that federal aid can only do so much and that even higher tuition is likely unless state appropriations rebound or colleges drastically cut costs.

"Just when Americans need college the most, many are finding it increasingly difficult to afford," said Molly Corbett Broad, president of the American Council on Education.

When adjusted for inflation, the tuition increases this fall amount to 6.6 percent at public four-year colleges and 3.2 percent at private ones, according to the College Board.

Many students are finding relief in expanded federal aid, including tax credits, veterans' benefits and a record expansion of the Pell Grant program for low-income students. In 2009-10, 7.7 million students received $28.2 billion in Pell Grants - an increase of almost $10 billion from the year before, according to a companion College Board report, "Trends in Student Aid."

Even so, the maximum Pell grant covers just 34 percent of the average cost of attending a public four-year college, down from 45 percent two decades ago.

For now, government subsidies and aid from schools are helping hold down net tuition and fees - the actual cost students pay when grants and tax breaks are factored in.

Estimated average net tuition and fees this fall at public four-year colleges were $1,540, while at private colleges they were $11,320. Both are up from last year, but below what students paid five years ago.

"Despite the fact sticker prices have gone way up, there is so much grant aid out there that many students are really paying less than they did before," said Sandy Baum, a senior policy analyst for the College Board and a Skidmore College economics professor.

That's also contributed to a growing gap between those who receive aid and the one-third of full-time students who pay full freight for college, the report says.

Patrick Callan, president of the National Center for Public Policy and Higher Education, said it's important to note that tuition is climbing after a decade in which family income did not rise for 90 percent of Americans, and at a time when many areas of the country face high unemployment.

"We're kind of on a national treadmill," Callan said. "We're putting additional aid in that is helping to buffer some students from the severity of this. But the tuition increases and the bad economy are raising the need for financial aid much faster than our investment in aid is moving."

The student aid report found that grant aid per full-time undergraduate student increased by an estimated 22 percent from 2008-2009, while federal loans increased 9 percent.

The Obama administration's restructuring of the federal student loan program this year will direct more money to Pell Grants and tie future increases in the maximum grant to inflation. But college officials say the impact will be minimal because next year's increase is small and tuition is rising faster than inflation.

Most students attend public schools, and states continue to cut appropriations. After adjusting for inflation, per-student state spending on higher education dropped by nearly 9 percent in 2008-09 and by another 5 percent in 2009-10 - and that spending includes soon-to-expire federal stimulus money.

Community colleges, which educate about 40 percent of college students, remain affordable, with tuition averaging $2,713. Lower income students receive enough aid to attend essentially for free.

Still, tuition rose 6 percent at public two-year colleges. State and local budget cuts paired with skyrocketing enrollment have prompted some schools to cut courses and limit enrollment.

The priciest private colleges are creeping closer to shattering the $60,000 ceiling in total cost to attend.

David Warren, president of the National Association of Independent Colleges and Universities, emphasized net tuition and fees have declined 7.4 percent in the past decade in inflation-adjusted dollars because colleges are expanding student aid.

"Every institution that I talk to understands the absolutely critical role of aid and it's going to be the thing they try to hold at the top of the list of priorities," Warren said.

On average, about 55 percent of bachelor's degree recipients at public colleges borrow money, and their debt is $19,800 by graduation, the College Board found.