Net cost of college tuition and fees lower than in 2005, report says

By Daniel de Vise
Washington Post Staff Writer
Thursday, October 28, 2010; 12:01 AM

A new report from the College Board might prompt a different sort of sticker shock: The net price of college tuition and fees, after factoring in student aid and inflation, is actually lower now than five years ago.

Tuition and fees rose 7.9 percent between 2009 and 2010 at public universities for in-state students and 4.5 percent for private four-year nonprofit colleges, according to the annual report Trends in College Pricing, released Thursday.

But the past year also saw a massive investment in public and private aid, enough to erase most of the increase in the sticker price of college - at least for students who receive aid.

The average yearly net price of public four-year universities in tuition and fees, after discounting grant aid and tax benefits, declined from $2,080 to $1,540 in inflation-adjusted dollars between 2005-06 and 2010-11, according to data from the national College Board survey.

The net price for private colleges declined in those years from $12,750 to $11,320. Add the cost of room and board, and public university students pay an average of about $10,000 a year, a few hundred dollars more than five years ago. Private university students pay a little over $20,000, a bit less than in 2005-06.

"People will be pretty surprised to see that after adjusting for inflation, the tuition and fees that people are being asked to pay hasn't gone up any faster than inflation," said Sandy Baum, co-author of the report. "It certainly puts those rising prices into perspective."

Total grant aid to undergraduate students rose a remarkable 22 percent in 2009-10, or $1,100 per student, Baum said, fueled by a historic increase in federal Pell grants.

Pell funding, earmarked for students of modest means, rose from $18 billion to $28 billion in a single year; the Obama administration has championed the Pell grant. Institutional grant aid from colleges increased as well, from $30 billion to $33 billion.

The outpouring of aid might not be felt by affluent families with children in $50,000-a-year universities, many of whom saw tuition bills continue to rise.

But those students are not the norm. Two-thirds of U.S. colleges charge tuition and fees of $15,000 or less. The average total cost of a year at college in 2010-11, including living expenses, reached $36,993 at private colleges and $16,140 at public colleges.

"Hidden behind these numbers are heroic efforts by university leaders to maintain student aid despite cuts in state funding and steep drops in charitable giving," Molly Corbett Broad, president of the American Council on Education, said in a statement.

The overall financial structure of higher education is shifting, Baum said, with the burden of public funding shifting from states to the federal government and to students. Per-student state funding of higher education dropped 9 percent in 2008-09 and another 5 percent in 2009-10.

With rising price tags and rising discount rates, private colleges are putting more of the burden on their wealthiest students even as they watch their overall revenues flatten, Baum said.

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