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Cost of Higher Education Heading Up

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Colleges "will be reluctant to increase tuition, but they will likely have little choice," said Molly Corbett Broad, president of the American Council on Education. (Grant Halverson - Associated Press)
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By Steve Hendrix
Washington Post Staff Writer
Thursday, October 30, 2008

College students and their parents should brace for sharp tuition increases as the widening economic downturn begins to hit campuses across the country, an organization of higher education officials said yesterday.

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The warning came in response to an annual national survey of tuition and fees that showed that college costs rose only modestly for the current academic year. But that report, released yesterday by the College Board, was based on data collected before June and did not reflect many of the economic trials embroiling the country.

The financial landscape has become far more grim, according to the American Council on Education, a coalition of more than 1,600 college and university presidents. "I am afraid this year's report may prove only to be a snapshot of a time in history that we might soon be referring to as 'the good old days,' " said ACE President Molly Corbett Broad.

At least 17 states, struggling to balance budgets at a time of plummeting tax revenue, are beginning to slash appropriations for their public colleges. Private schools are also being squeezed as their endowments wither in the stock market and donors grow more cautious.

"I am concerned that we are entering a period -- as we did following the recession of the late 1980s and early 1990s -- when we will see a sharp spike in tuition prices at both public and private institutions," Broad said. "Presidents and boards of trustees will be reluctant to increase tuition, but they will likely have little choice."

Virginia and Maryland are among the states that have recently trimmed higher education budgets in the face of the downturn.

In Richmond, Gov. Timothy M. Kaine (D) sliced higher education funding by about 6 percent three weeks ago to help close a projected $2.5 billion shortfall for Virginia's two-year, 2009-10 budget. Kaine said he didn't expect the cuts to cause a tuition increase. University of Virginia officials said they expected to cover the reduction by not filling open jobs and cutting administrative costs.

Maryland trimmed funding to state universities and community colleges by 1.5 percent this month as part of a $350 million emergency spending cut. University system officials, who have frozen tuitions at four-year state schools for three straight years, said they would absorb the cuts without a midyear price increase. But officials would not rule out an increase at community colleges.

"I can't predict what tuitions will be, but there is going to be a lot of pressure next year on universities," said John Childers, president of the Consortium of Universities of the Washington Metropolitan Area, which includes the University of Maryland College Park and 14 other area campuses.

Yesterday's survey released by the College Board, a nonprofit association of educational institutions that provides assistance to college-bound students, showed relatively modest increases in tuition and fees for the 2008-2009 year, with costs rising 1 to 3 percent above inflation. The report found that tuition for the year climbed 6.4 percent for in-state students at public four-year institutions, to an average of $6,585. Private colleges jumped 5.9 percent to an average of $25,143. The cost of attending community colleges declined, after adjusting for inflation, by 0.8 percent to $2,300 for the year.

The report found that overall financial aid available to students, including grants and federal loans, increased for the year, particularly from public programs. Federal student loans jumped 6 percent, according to the most recent available data. But the number of private loans for higher education, which had been climbing, began to shrink even before the current credit crisis. The report did not address the effects of the recent credit crunch on student lending.

Rising college costs coupled with the economic downturn also have more students lining up for financial help. The popular federal Pell Grant Program, which serves low-income students, received almost 800,000 more applications in the first seven months of this year than during the same period last year -- the largest jump ever in that time period, according to the Department of Education. Officials are warning that Congress may need to budget an additional $6 billion next year for the program.

Staff writer Maria Glod contributed to this report.


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