College Costs: A Tough Equation

By Michelle Singletary
Sunday, October 29, 2006

If you've got a high school senior about to put in applications for college, you won't be surprised by the latest news about college costs.

In its annual look at trends in college pricing, the College Board reported that the average tuition at four-year public and private institutions is up again. Prices have risen 35 percent from five years ago, after adjusting for inflation.

If you're a parent of a college-bound student, there were two other facts in the College Board report that shouldn't be overlooked: It is taking longer for students to graduate, and an increasing number of students are turning to high-priced private loans to pay for college.

Among bachelor's degree recipients in 1999-2000, the College Board said in its report, those who began their studies at four-year public colleges and universities took an average of 6.2 years to earn a degree. Those who began at four-year private institutions took an average of 5.3 years to graduate.

Part of the reason it is taking so long for students to graduate is the cost. Tuition and fees at four-year public colleges are averaging $5,836 this academic year. That's a $344 increase over last year, or 6.3 percent. Add in room and board for in-state students at public institutions, and you're looking at $12,796.

Tuition and fees at four-year private colleges average $22,218 in the current academic year. That's an increase of 5.9 percent. The total cost, including room and board, is $30,367.

Let's say your child doesn't get a full scholarship or grants. How will you pay for his or her college education?

Federal loans, you say.

Did you know the lifetime maximum for undergraduates under the main federal loan program is $23,000? For students who pay their own way, the limit is $46,000. (By the way, those caps have not changed since 1992.)

That cap is a big contributor to the huge increase in private student lending, says Mark Kantrowitz, publisher of, which is one of the most useful Web sites on this issue.

The proportion of student loans borrowed through banks and other private lenders, as opposed to the federal government, climbed to 20 percent of all education borrowing in 2005-06. Five years ago, private loans made up only 12 percent of all borrowing; 10 years ago it was 4 percent.

Since 2000, this portfolio of loans has been growing at an average annual rate of about 27 percent in inflation-adjusted dollars, according to the College Board. In 2005-06, the amount borrowed totaled $17.3 billion.

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