College tuition up, net price down

College tuition up, net price down

October 23rd, 2009 by Joan Garrett McClane in News

The surging sticker price of higher education has gotten a lot of attention, but what most people don't know is that the average student is paying less for their college education than they were five years ago, according to an annual report on college pricing.

The average published tuition cost at private and public colleges has risen on average between 15 percent to 20 percent since 2004, according to a report by the College Board, which runs the PSAT, SAT and AP programs.

Yet, students' total costs for college were actually $400 less per year at public colleges and $1,100 less at private colleges than in the same timeframe, the report says.

State and federal grants are cushioning North Georgia and Tennessee students from the financial impact of rising tuition costs, and, after all the checks are cut, some students are making money by attending college, officials said.

"There is plenty of money out there," said Samantha Cox, a UTC student who uses grants and scholarships to pay for her schooling. "Most people are seeing that sticker price, but really you aren't paying that. ... People are worried about tuitions going up but, in reality, we are getting money to go to school."

Still, the price of a college degree has been creeping up for several years.

The University of Tennessee board of trustees approved a 7 percent tuition increase this fall for UTC and a 9 percent increase for the University of Tennessee at Knoxville.

This fall, the Georgia Board of Regents lifted a freeze on the credit hour rate that had been in place for three years. Next year's incoming freshman class could see its tuition increase every year it's enrolled, said John Millsaps, spokesman for the University System of Georgia.

"(Setting the rate) was contingent on state support and the state is in a budget hole," he said.

Like gas prices and energy costs, rising tuition seems to be a sign of the times, many say, and the recession has exacerbated the problem.

But as incomes drop and jobs continue to be scarce, many have criticized higher education leaders for raising tuition year after year.

"The American people ... believe that college access is declining ... and that college and universities will drive up tuition and spending rather than look to better ways to spend the money they have," according to a statement by the National Center for Public Policy and Higher Education, a nonprofit that promotes college access. "Tuition escalated as family income flattened, and costs and prices increased significantly, sparking concern among policymakers and the public."

Still, the average student at a four-year college is receiving about $5,400 in grant aid and federal tax benefits, dropping the net tuition price from $7,000 to $1,600, the College Board study reports.

Students are receiving more financial aid toward their degree, in part, because the government has pumped more in federal grants. The maximum Pell Grant, federal financial aid for low-income students, increased from $4,731 in 2008 to $5,350 this fall and, under new legislation, more students are eligible.

The trend holds true at local colleges in North Georgia and Tennessee, officials said.

At the University of Tennessee at Chattanooga, 75 percent of enrolled students receive financial aid, including loans, and many students pay only $1,400 for their tuition, said Dianne Cox, director of financial aid at UTC. The full cost to attend UTC as a full-time student for two semesters is $5,656.

This year, 2,784 UTC students, or 26 percent of all students enrolled, received federal need-based Pell Grant which averaged $4,260, she said.

And 4,983 students, or 47 percent of the school's total enrollment, received $4,000 or more from the Tennessee HOPE scholarship, said Ms. Cox.

"We see a lot of students who are pretty well set," Ms. Cox said. "It is pretty shocking."

At Cleveland State Community College, 42 percent of students receive federal Pell Grants that average $2,782, just a few hundred dollars less than the school's annual tuition of $2,932, said Geraldine Parks, director of financial aid at the school.

Students at Covenant College, a private Christian college in Lookout Mountain Ga., also have the bulk of their tuition and fees paid by scholarships and grants. The average student has nearly 50 percent of costs covered, officials said.

"Most, if not all, students won't pay the sticker price," said Chelsea Moser, a Covenant student whose paid more than two-thirds of her tuition and fees with grants and scholarships. "For many, it is a drastically different cost. It would have been impossible for me to go to Covenant without the financial aid package."

Although many college students get a financial boost from grants, officials said there are some students who pay the full-ticket price for their degree. But these students are rarely poor or underprivileged, Ms. Cox said.

Students from middle-class and upper-middle class families that do not qualify for merit-based grants or lose their HOPE scholarship often end up footing the bill for their higher education, Ms. Cox said.

"Those are the ones affected the most because any increase in cost will mean an increase in student loan debt," Ms. Cox said. "The parents will make enough to be OK, but not enough for college costs. ... They feel the squeeze."