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Tuition rates outpace inflation

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Average in-state tuition and fees for public four-year institutions rose 6.6 percent from $5,804 to $6,185.,”College tuition fees for public and private universities are increasing faster than the inflation rate, according to a report released by College Board on Monday.

Average in-state tuition and fees for public four-year institutions rose 6.6 percent from $5,804 to $6,185. Private four-year institutions' tuition and fees rose 6.3 percent from $22,308 to $23,712, the study said.

The price increase includes health insurance costs, compensations, technology updates, facilities and energy costs, said Sandy Baum, senior policy analyst at College Board and professor of economics at Skidmore College.

"Colleges are working to find ways to save on costs, but they're not always run as efficiently as they might be," Baum said. "We certainly have to hope they're going to rise more slowly in the future."

The cost of labor, energy and facilities run at different rates for institutions than for consumers, said Paul Hassen, vice-president for public affairs at the National Association of State Universities and Land Grant Colleges.

"The cost of health care has gone up more than the cost of inflation and other elements within the institution as a whole have to adapt," Hassen said.

Public school tuition is dependent upon the amount of money institutions receive from the state each year. Public education prices are rising faster than private because of a decline in state support for public institutions, Hassen said.

At private universities the tuition increase rate has been slower, said Tony Pals, director of public information at the National Association of Independent Colleges and Universities.

"That 6 percent marker is what we've pretty much seen over the last five years," Pals said.

Over the past five years, the increase in tuition at private universities has gone up 14 percent when adjusted for inflation, which is the smallest increase since 1982, Pals said. He said students end up paying about 40 percent less than an institution's published price because of the grant aid provided.

"While 6.3 percent seems high again, it's important to keep it in context and that context is more than 80 percent of students do not play the published price," Pals said.

The cost of a private and public institution is equalized by financial aid, said James Boyle, president of College Parents of America.

"The cost of Marquette would be exactly the same as the University of Wisconsin-Milwaukee if they judged they have a family contribution that's none higher than the maximum cost at UWM," Boyle said.

Private universities have strengthened efforts to control their costs, Pals said. Many private institutions are turning to green-friendly facilities to save on energy costs and have been working with other colleges to buy goods at lower costs. Pals said it is difficult to keep tuition low when energy, health care and insurance costs outpace tuition increases.

"It's difficult for an institution to keep tuition lower without cutting into the quality of education provided to students," Pals said.

Grant money for low-income and middle-income students has been increasing, Pals said.

Two-thirds of all students are receiving grant aid, Baum said. But the financial aid is not enough to meet the growing gap between the price of college and what families can afford to pay.

"It's not something most people can pay for out of their current income," Baum said. "College is an investment. It has to be paid for over a period of time, not in one year."

Boyle said families are frustrated by college costs, but mindful of the importance of a college education.

"They're essentially biting the bullet and scrambling for ways to pay for college," Boyle said.

Click here for a story on rising tuition costs from The New York Times.

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