College costs: The numbers keep getting bigger

last updated 8 January 2015

College just keeps getting more expensive, said Justin Pope in the Associated Press. College costs rose faster than the inflation rate again this year, with the College Board finding that average tuition increased 6.6 percent, to $6,185, at public schools and 6.3 percent, to $23,712, at private schools. At George Washington University, in Washington, D.C., tuition and room and board now tip the scales at more than $50,000. Since financial aid can greatly reduce the sticker price of a college degree, these published prices are often meaningless. But financial aid, too, has failed to keep pace with the rise in college costs. “The net price for full-time students at four-year public universities” is actually up 6.2 percent this year, compared to about a 4.4 percent net increase faced by students at private universities. Prospects may not be much better for the future, and one reason is the stock market, said Alison Damast in BusinessWeek. Many schools use investment earnings from their endowments to bolster financial aid packages, and over the past several years, stellar investment returns have helped counteract higher education’s everincreasing costs. It’s not clear how much market fluctuations will affect college endowments, but “if those returns suffer, those relentless tuition bills could edge even higher.” Though public schools often have endowments, private schools “tend to have the lion’s share of endowment funds,” with assets averaging $82,700 per student. When selecting among schools, take a look at their investment portfolios. Some parents of college-age students have begun to seek professional financial help, said Elizabeth F. Farrell in The Chronicle of Higher Education. “Five years ago, the National Institute of Certified College Planners, an organization that licenses college- planning professionals, did not exist.” Now the group has 1,200 registered members, who help with everything from devising a savings plan to shopping for a school to applying for financial aid. Their clients typically have household incomes between $50,000 and $150,000. “Even though these families tend to be financially savvy, they have discovered that working with a specialized professional can mean the difference between qualifying for financial aid and being expected to pay the full sticker price.” For many families, that translates to thousands of dollars in savings.