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Tuition Rises More for In-State than Out-of-State College Students

In-state public college students paid about 7 percent more for tuition in the the 2012-13 school year compared to the previous year (after adjusting for inflation), while costs went up for out-of-state student by 4 percent, according to a recent report from the U.S. Department of Education.

Still, state schools are a bargain compared to other sectors.

Tuition and fees for public in-state residents was $7,500 last year and $17,000 for out-of-state students. Last year, the price of attending a nonprofit college increased by 3 percent (to $24,300) and tuition at for-profit college went down by 2 percent to $15,200) compared to 2011-12, the First Look provisional data from the National Center for Education Statistics show.

Government funding for higher education has taken a hit in recent years as tax revenue plummeted during the recession.

From 2008 to 2011, the government contribution to public higher education dropped by $1.3 billion, while the number of students on campus rose 12.5 percent, to 11.7 million students, a report released in March revealed.

To offset the declining revenue, public colleges have raised prices. Tuition and fees went from $42.2 billion in 2008 to $56.3 billion in 2011. Last year, net tuition revenues per student reached a new high of $4,774. Still, increasing tuition has not been enough to offset the loss in state and local funding. Colleges' total educational revenues per student dropped by 5.7 percent from 2008 to 2011, according to the most recent report from the State Higher Education Executive Officers.

State are trying to respond with increased financial aid. In the 2011-12 academic year, states awarded about $11.1 billion in total state funded student financial aid, an increase of about 3.2 percent in nominal terms and 1.8 percent in constant dollar terms from the $11 billion in aid awarded in 2010-11, the National Association of State Student Grant & Aid Programs reported Monday.

Of the grant money awarded in 2011-12, 74 percent was given based on financial need and 26 percent was non-need-based. Funding for undergraduate need-based grant aid increased nationwide from about $6.4 billion in 2010-11 to about $6.8 billion in 2011-12, an increase of 6 percent.

An increasing number of states are linking need-based aid with some performance requirements. For the first time this year, need- and merit-based awards surpassed scholarships given out solely on the basis of merit. To make the most of limited state dollars and encourage student success, some states, such as Colorado, are including course completion and graduation rates into their formulas for appropriating state dollars directly to institutions.

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