Average college tuition again rose faster than inflation this year, but the 4.8% increase at four-year state schools nationwide was the smallest rise in more than a decade, according to a College Board study released Wednesday.
The report also emphasized that hefty financial aid significantly cut college bills for many students and that loan burdens were not as large as many people feared.
The increase brought average tuition at public four-year schools to $8,655 without financial aid. But in what may be a happy surprise to worried families, grants and tax credits reduced average tuition bills at those campuses to about $2,900, the study said. Room and board could add $9,205, on average.
The 4.2% increase at private, nonprofit campuses was similar to that of the last few years. At those schools, average tuition rose to $29,056 although financial aid from the schools and federal and state governments cut the average out-of-pocket costs to $13,380, plus $10,462 more for room and board.
Sandy Baum, an analyst who co-authored the study, urged families to pay attention to the net costs and financial aid and not just the overall price tag.
"There are students who have sticker shock and may not even apply to college," said Baum, a professor at George Washington University.
Public universities faced reductions in state funding during the recession and, as a result, hiked tuition by about 8% over each of the previous three years, the report showed. This year, those schools faced resistance from state legislators and the public against such large hikes at a time when inflation is only 1.4%, Baum said. Instead, she said, the schools cut expenditures to slow tuition increases.
California's public colleges had some of the steepest tuition increases over the last few years but its community colleges remain the best bargain in the nation, the study said.
The nation's average tuition and fees at two-year colleges was $3,131, compared with $1,418 in California. Cal State's tuition is now $5,970, while the average is $7,606 for master's-degree-granting state schools. University of California's tuition of $12,192 is above the $9,539 national average for universities with doctoral programs, according to the College Board data.
The report countered public perceptions that vast numbers of college graduates owe education loans equivalent to mortgages. In fact, the study said, their burden is closer to the cost of a new car. About 57% of last year's public college graduates had debt and the average was $23,800; at private, nonprofit schools, about two-thirds of graduates had loans and those averaged $29,900, according to the College Board. Only 2% of graduates owed more than $50,000.
Total education borrowing, including federal and private loans, dropped last year for the first time in 20 years — by 4% to $113.4 billion — although it still is sharply higher than the amount five years ago. Baum suggested that a slight decline in enrollment and a stronger economy are the causes, as students and parents were employed more and didn't need to borrow as much.