SAT test creator: Don't let tuition hikes scare you
SAT test company, The College Board, releases studies saying that while tuition still outpaces inflation, jumps in federal and private grants are keeping up.
The costs of attending college – tuition, room, board, fees, books – keep spiraling upward. Over the past decade, the published tuition and fees – the "sticker price" – rose 5.6 percent a year at public universities and 3.0 percent a year at private colleges, in constant dollars, the College Board reported Thursday. Just last year, in-state tuition jumped 7.9 percent at public universities, while private colleges showed a 4.5 percent increase.Skip to next paragraph
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That's the bad news.
The good news is that almost nobody pays sticker price anymore, thanks to $200 billion (yes, billion) in grants (federal, state, and private), federal loans, federal tax credits and deductions, and federal work-study for undergrads and grad students, according to Trends in Student Aid 2010. Private and state loans added another $8.5 billion.
"Despite rising prices," said Sandy Baum, independent policy analyst for The College Board and co-author of the studies, "after considering grant aid and tax benefits, on average students are paying less in tuition and fees than they were five years ago."
But that sticker price is a powerful deterrent for some.
"There are an awful lot of people who pay the sticker price or something very close to it," says Richard Vedder, director of the Center for College Affordability and Productivity, a not-for-profit research center in Washington, D.C. "People from affluent families going to private colleges are not going to get a huge tuition discount unless there’s something extraordinary in their academic record. The fact is, when you apply to school, you don’t know if you’ll pay $20 or $30 or $40 thousand until the school tells you what institutional financial aid they’ll provide."
Total aid to undergraduates increased 51 percent over the past decade, and aid to graduate students by 42 percent, in constant dollars. Graduate students often get left out of the student aid conversation, but they qualify for many of the benefits, as well.
In the 2009-10 school year, about 8 million undergrads and grad students received $400 to 500 apiece from tax benefits. Many fewer students benefited from institutional and private grants, but those made the biggest difference for students at high-priced private colleges.
Increases in grant aid and tax credits don't benefit all students, since most are targeted to low-income students and families, but they do help millions. This past year saw the largest increase in Pell Grant history – almost $10 billion – as 7.7 million students received $28.2 billion. Only about 25 percent of Pell Grant recipients demonstrated enough financial need to qualify for the maximum amount, now $5,350. The average Pell Grant award in 2009-10 was $3,646.