College tuition increased this year by less than 5 percent on average, one of the smallest rises in recent years--though still well above the annual inflation rate, the College Board announced yesterday.

"This is good news for parents and families. I think the trend is good," said Gaston Caperton, the College Board's president. He also announced that the financial aid available to students from all sources has reached an all-time high of $64 billion, an increase of 85 percent over the past decade.

Higher education leaders said the smaller tuition increases were the result of higher state funding of public colleges as well as cuts in administrative and educational costs at private colleges in the 1990s, efforts undertaken largely in response to public complaints about the rapidly rising price of a college education.

But tuition continues to rise faster than other consumer prices, college leaders said, because of high costs for campus computerization, well-stocked libraries, updated laboratories and increased student aid, as well as the labor-intensive nature of education.

The College Board cautiously described last year's tuition increases as the smallest in four years, out of concern about possible discrepancies between its annual tuition surveys. But other analysts said it was the lowest increase in as many as 20 years.

Average tuition at four-year private colleges and universities rose 4.6 percent, to $15,380, an increase administrators said was the lowest in 27 years.

At public colleges, where 80 percent of students are enrolled, tuition rose an average of 3.4 percent, to $3,247 at four-year schools, and 4.7 percent, to $1,554, at community colleges. Both increases were slightly lower than they were last year.

In announcing the numbers, Caperton, a former governor of West Virginia, emphasized that a college education remains a valuable investment, increasing a graduate's earnings by an estimated $1 million over a lifetime of work. "The cost of not going to college is much higher than the cost of going to college," he said.

A spokeswoman for the U.S. Student Association, a lobbying group that represents college students, praised colleges for trying to hold down tuition but said the latest increases nonetheless made it harder for some students to pay their way.

"I think these numbers look good in relation to what they were in the past," said Jamie Pueschel, the group's legislative director. "[But] increases above inflation--as these are--still hurt students."

Terry Hartle, senior vice president of the American Council on Education, said that states contributed the most to holding down rising tuition costs by increasing funding for public colleges by 6 percent last year--the largest percentage in a decade.

Private colleges, which have been a greater target for public criticism because their tuition is generally higher, have begun to benefit from the cumulative impact of cutting administrative costs and trimming programs peripheral to their educational missions.

"When the national spotlight was focused on us, we felt we needed to take it seriously, and we have," said Lawrence DeNardis, president of the University of New Haven. "We know that we need to restrain costs."

David L. Warren, president of the National Association of Independent Colleges and Universities, predicted that tuition increases at private colleges would continue to moderate in the coming decade as they begin to use educational technology to reduce labor costs.

"I think this is a corner-turning year," Warren said.