Oct. 23 (Bloomberg) -- Tuition and fees at U.S. public universities rose 2.9 percent this year, the smallest increase since the mid-1970s while still outpacing inflation, a College Board report found.
In-state residents at four-year colleges are paying an average of $8,893 in the 2013-2014 school year, up from $8,646 the year before. Nonprofit private colleges raised tuition and fees 3.8 percent, to $30,094.
As Americans struggle with $1.2 trillion in student debt, the latest price increases follow President Barack Obama’s announcement that he will try to rein in colleges by creating new government ratings of costs and educational results. Amid public outcry over rising tuition, families should know that a degree pays off over a lifetime of higher earnings, College Board President David Coleman said.
“A college education is one of the best investments that students and families can make,” Coleman said on a conference call with reporters.
Including the cost of room and board, in-state students at public universities pay about $18,000 on average; and out-of-state, $32,000. Students at private, nonprofit colleges shell out almost $41,000.
Continuing a trend over the past decade, the increase for tuition and fees at private colleges was about twice the 2 percent inflation rate for the year ended July 2013.
Increases at public universities marked a departure. Over the past 10 years, the institutions had raised tuition and fees at almost three times the inflation rate.
Public colleges, which are partly funded by state governments, have been responding to public pressure over costs, said Jennifer Ma, a co-author of the report and an independent consultant to the New York-based College Board. At the same time, some states, most notably California, have been more generous with state funding to colleges than in recent years, easing pressure to raise tuition, she said.
Two-thirds of full-time undergraduate students receive grant aid, so most students pay less than colleges’ published “sticker price,” according to the College Board, which administers the SAT college entrance exam.
The amount of grant aid available to students is failing to keep pace with college costs, increasing the burden on lower-and middle-income families, said Sandy Baum, professor emerita at Skidmore College and a co-author of the report.
About 60 percent of students who earned bachelor’s degrees from the public or nonprofit colleges where they began their studies graduated with debt, the study found. On average, they borrowed $26,500.
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