College Education Costs Continue to Escalate

“College Education Costs Continue to Escalate”

By Craig Anderson, ACE Senior Marketing Specialist

The term college tuition refers to fees which students have to pay to Colleges in the United States. Except for its military academies, the U.S. government does not directly support higher education. Instead it has offered programs of loans and grants, dating back to the Morrill Act during the U.S. Civil War and the “G.I. Bill” programs implemented after World War II. Developed countries whose national governments directly support higher education tend toward more moderate increases in college tuitions and thereby are outpacing the U.S. in the number of graduates in most higher education program categories.

This decade has been a period of extraordinary increases in college costs. Published prices are up 35 percent in five years — the largest increase of any five-year period in the 30 years covered by the College Board’s annual “Trends in College Pricing” report, released recently.

College price increases slowed this year but they again topped inflation, and financial aid isn’t keeping pace, the report says. Tuition and fees at four-year public colleges rose $344, or 6.3 percent, to an average of $5,836 for the 2006-07 academic years, according to the report. Tuition and fees at private four-year colleges raised 5.9 percent overall, to $22,218.
That’s coupled with the reality that grant aid — from the government, colleges and private sources — isn’t covering the price hikes. For the 62 percent of full-time undergraduates who receive grant aid, the average net cost of a four-year public school rose 8 percent to $2,700, the report said.

“There is some good news: There’s a lot of aid out there that is helping students,” said Sandy Baum, senior policy analyst at the College Board. “But there are real notes of caution about … the failure of grant aid to keep up with the rise in prices.” So, now it’s apparent that attending a college or university in the United States is very expensive. A year at a prominent four-year university can cost almost $50,000, and this does not include the extra costs of housing, transportation, and other living expenses. There are, of course, less expensive options at colleges that also offer an excellent education. Most four-year colleges cost at least $10,000 per year, and many more are in the $20,000 to $30,000 range. For families in the United States, paying for the education of their children has become a major expense. Many families begin saving money from the time their children are born, and some states offer incentive plans for savings programs such as the 529 College Savings Plan or the Coverdell ESA. As expensive as the tuition is, it should be noted that this hardly covers all the cost of providing an education. Buildings, equipment, and salary costs are increasingly expensive, with advanced technology adding tremendous costs for laboratories and other specialized facilities. Universities and colleges constantly seek support from foundations and corporations, as well as from local, state, or federal government.

Still, for prospective students, the costs can be daunting. Students may have jobs in secondary school or college to help earn money for college tuition or other expenses, such as books, transportation, and housing. Colleges help students find work either on campus or in the nearby community to offset the costs. Community colleges are successful, in part, because they allow working adults to take classes during the evening or on weekends or to otherwise combine full- or part-time school with full- or part-time employment. Since World War II, an important benefit to military service has been the tuition support provided through the GI Bill, a law that provided financial assistance to allow American soldiers (known as GIs) a gateway to higher education that otherwise would not have been possible for many of these military veterans.

Family savings and investments are most often used to fund student’s college expenses, but when they come up short (especially for additional expenses like housing and food) students often rely on loans and grants. Loans are borrowed money that must be paid back, with interest, although the interest rates for student loans are lower than for some other types of loans. The early years of many graduates’ careers are spent trying to pay back their student loans. Grants, are actual gifts of money that do not have to be paid back, but in order to be qualified for these gifts, students must be able to demonstrate a need, such as financial hardship, or meet an expectation, such as maintaining a higher grade point average. Scholarships are funds that are earned or competed for, and they may be based on the student’s academic, athletic, or civic performance or on some other condition that has been met by the student or family. Identifying and accessing these funds can be confusing, and even discouraging, for families when they encounter the application forms. Colleges, secondary schools, and other organizations have offices to help students learn about funding resources.

How much more daunting, then, must this process be for students from other countries who want to study in the United States. Many other countries provide an education at little or no cost to the student, or they have costs far below those in the United States. What options are available for international students who want to attend a college in the United States, but who did not start saving for college from the time they started elementary school?
Interested in attending college in the United States? You may have noticed that the cost of an American education is higher than what you would pay in countries where the government centrally controls the educational system. We hope you have also noticed, however, that an American education gives you a tremendous return on investment, making it an excellent value for the money.

Here are some ways of managing the cost of your U.S. education:

• EducationUSA centers are backed by the U.S. Department of State and serve as your official source of information. Locate the EducationUSA center nearest you by going to http://www.educationUSA.state.gov/centers.htm.
• Two publications you’ll want to look for at your EducationUSA Advising Center are The College Board International Student Handbook and Peterson’s Applying to Colleges and Universities in the United States.
• Resources available through the U.S. government: Most U.S. government programs target graduate students. They are administered through the U.S. Embassy Public Affairs Section (PAS) or the U.S. Agency for International Development (USAID) in accordance with bilateral agreements.

Scholarship agencies: Beware! Fraudulent agencies abound. As a rule of thumb, any so-called scholarship agency that demands a fee in exchange for information should be treated extremely cautiously, no matter how impressive the literature or convincing the guarantees.

If you’re wondering what college might cost your family in particular, take a look at the college calculator provided at no cost from salary.com at http://swz.salary.com/collegetuitionplanner/layoutscripts/cltl_start.asp