More Student Loans and School Grants Help Buffer Escalating Tuition and Fees
By Allison Bradley Fleming, EdFund Communications

During 2003-04, college tuition and fees increased, on average, $579 at four-year public institutions, $1,114 at four-year private institutions, and $231 at two-year public institutions. For the 2002-03 school year, grant aid grew by 10 percent while education loan volume rose by 14 percent, according to the College Board’s annual analysis of college costs and student aid.

For the first time ever, the College Board looked at average net charges, which is how much students pay after grant aid is considered. What researchers found is that the average undergraduate student pays substantially less than published tuition and fees. In addition, about half of all students receive grant aid from at least one source.

Two reports published simultaneously – Trends in Student Aid 2003 and Trends in College Pricing 2003 – examine fees, costs and different forms of financial aid at two- and four-year public and private institutions nationwide. Among other findings, the report says that, in 2002-03, student financial aid increased to record levels -- $13 billion more than the previous year, for a total of $105 billion. Total aid per full-time student now averages about $9,100 with just over a third of that amount coming in the form of grants.

“Those who oversee America’s colleges and universities believe their institutional importance to economic recovery is undeniable, and they are, in large measure, correct,” said College Board President Gaston Caperton. “Still, all of us need to focus on the mounting and troubling hardships of financing an education.”

Trends in College Pricing
At four-year public schools, the average cost of tuition, fees, room and board (TFRB) increased 9.8 percent in the last year, to $10,636. At four year-private schools, TFRB averaged $26,854, a 5.7 percent jump over last year. The college pricing study also reports:

• At four-year public institutions, tuition and fees average $579 more than last year, a 14.1 percent increase.
• At four-year private institutions, tuition and fees average $1,114 more than last year, a 6 percent increase.
• At two-year public institutions, tuition and fees average $231 more than last year, a 13.8 percent increase.

Trends in Student Aid
The student aid report looks at most grants, virtually all loans (including private loans), work-study and federal education tax credits. It does not include all of the subsidies students receive through income tax provisions and omits some private sources of grant aid.

Other key findings include:

• Combined, unsubsidized Stafford and PLUS loans and tax credits now constitute 43 percent of total federal aid.
• Institutional grants account for nearly 20 percent of student aid, more than doubling in the past decade.
• The popular 529 savings accounts for families now contain more than $35 billion in assets, with an average value of $6,573 per account.
• While Pell Grant funding rose by 15 percent in inflation-adjusted dollars, the average Pell Grant increased by only 3 percent, or $123 per student.

Both the rising costs and the trend toward decreases in need-based aid point out the difficulties lower-income families continue to face in higher education access.

“Higher education’s case needs to be tied to legitimate social and economic objectives, and it must not be placed unfairly on the backs of students and their parents who bear costs,” said Caperton. “All of us must do more to ensure that college remains affordable and that more students who have the preparation and desire have access to higher education.”

Trends in Student Aid 2003 and Trends in College Pricing 2003 are available from the College Board’s Web site at www.collegeboard.com.

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