Easing the Burden of College Tuition

Insight on the News, August 27, 2001 by Erik Baptist

Although the costs of a college education continue to rise, abundant sources of financial aid await any student who takes the time to plan ahead and meet crucial deadlines.

Almost every major article concerning the cost of higher education begins with a story about a student or family struggling to keep up with rapidly increasing college costs. Since 1980, the average college tuition has been increasing two to three times faster than the Consumer Price Index. According to the College Board, a public-policy research organization focused on education issues, "both public and private four-year college tuitions increased on average more than 115 percent over inflation" during that 20-year period.

Last year, the average tuition at four-year public colleges and universities rose from $3,362 to $3,510, a 4.4 percent increase. At private four-year institutions, the average tuition increased from $15,518 to $16,332, a 5.2 percent jump.

Figures for the upcoming school year do not offer much hope of change for the better. "The trend is definitely higher than last year," says Terry Reindl, chief of state policy at the American Association of State Colleges and Universities. The University of Minnesota increased its tuition by 13.3 percent, for example, Ohio State University by 9.3 percent and the University of Tennessee by 15 percent.

Private colleges and universities have raised their tuitions for the coming school year an estimated 4.5 to 5 percent. It's an increase that tends to occur at schools with smaller endowments and fewer students, says Roland King, vice president for public affairs at the National Association of Independent Colleges and Universities. But even though private institutions usually have higher tuitions than public schools, King points out, "Private colleges and universities offer more student aid, which brings the difference in cost between the two closer together." And, says Cheryl Fields, spokeswoman for the National Association of State Universities and Land-Grant Colleges, "When institutions raise their tuitions, they also raise their aid packages for the neediest students."

State universities in California and New York have held the line on tuition rates for the last five years. In Massachusetts, prestigious Williams College has frozen its tuition, which is a rarity among liberal-arts colleges. There still are bargains aplenty. In fact, college still is an affordable option for virtually every student, as the following figures indicate: Nearly one-half of the students who attend four-year institutions pay less than $4,000 per year in tuition, about 70 percent of students at four-year colleges pay less than $8,000 in tuition and 44 percent of undergraduates attending two-year colleges pay less than $2,000.

Also, financial aid is at hand. Of the 14.5 million college students, 8.1 million receive financial aid. "There are a number of resources out there," notes Tim McDounough, director of public affairs at the American Council on Education (ACE), "including savings plans at the state level for both public and private schools and financial aid from state and federal government sources."

McDounough recommends that students search the Internet for available financial-aid opportunities, and indeed the Internet offers a variety of such resources. Finaid (www.finaid.com), an Internet resource run by Mark Kantrowitz, for example, offers a comprehensive set of financial-aid calculators and searches compatible with the student's grade-point average, SAT scores, career interests and activities.

"Students should never pay money to find out about financial aid for school," Kantrowitz tells Insight. "Most of these fee-based services actually are on the Internet for free. Every tip that these outfits give you can be found on the Finaid Website" he says. Kantrowitz warns that students and their families also should be wary of services that claim to do all the paperwork for you. Brenda Mack, director of public affairs at the Federal Trade Commission adds, "You have to do the work; no service can fill out applications for you. It will only cost you your time."

Mack advises students to use the Internet, talk to a high-school guidance counselor or go to the library to get the information. She also recommends contacting the financial-aid offices of the particular colleges to which a student hopes to apply to see what options are available. Ideally, the financial-aid system makes it possible for everyone to attend college.

Among the terms a student in search of assistance will need to know is the "Expected Family Contribution" (EFC), which is the amount of money that a student's family is expected to contribute. The EFC will vary with the source of financial aid, and the formula for figuring it usually includes income, assets and family size. For example, if a family's EFC is $5,000 and the student attends a college with a tuition of $8,000, then he or she is eligible for as much as $3,000. The same applies for schools with higher tuition rates. If the school's tuition is $25,000 and the EFC is $5,000, then the student is eligible for $20,000 in financial aid. There are three main forms of financial assistance: grants and scholarships, loans and work.