College Costs Climb; More Take Advantage of Tax Credit
The College Board came out with its annual trend reports that once again show the cost of college rising, but financial aid and grants cushioning the impact of the increases.
Published in-state tuition and fees at public four-year institutions were up 8.3 percent in 2011-12 over last year, to $17,131, including room and board. The total cost of attending a private nonprofit four-year college and university was $38,589, up about 4.4 percent. Inflation rose 3.6 percent in the same period.
Thanks primarily to an increase in aid from the federal government, the net price that students paid for college this year rose just 1.4 percent beyond inflation.
Where students saved an increasing amount of money was through education tax credits and deductions. New data reveal that families saved an estimated $14.8 billion in 2009-10 and 2010-11 through the American Opportunity Tax Credit that was implemented in 2009. In 2007-08, savings were $7 billion from credits and deductions.
The College Board's Sandy Baum, policy analyst and co-author of the reports, said in a press call yesterday that declining state appropriations for higher educationwhich were down 23 percent in the last decadewere linked to the growth in tuition and fees. The federal government replaced some of that support, helping families through the tax credits and increased Pell Grants.
However, Baum emphasized there was great variation by state.
For instance, California, which enrolls about 10 percent of the nation's full-time public four-year college students, had an increase in published in-state tuition and fees of 21 percent in 2011-12. Arizona's in-state tuition and fees at public four-year institutions were up 17 percent, while increases in Connecticut and South Carolina were about 2.5 percent.
The national average for out-of-state students this year, published tuition, fees, and room and board was $29,657, up 5.2 percent.
At public two-year colleges, the average cost in 2011-12 was 8.7 percent higher, or $2,963.
For-profit institution costs rose 3.2 percent, to an estimated average of $14,487 in 2010-11.
The advertised sticker price for colleges is only paid by about one-third of students, the reports show. Two-thirds of full-time students receive grant aid or save through federal tax credits to help cover expenses.
Higher-income families were more likely to take advantage of assistance provided through tax credits, the trends-aid report found. The percentage of savings from credits and deductions going to taxpayers with incomes below $25,000 increased from 5 percent in 2008 to 17 percent in 2009, while savings to those with incomes above $100,000 increased from 18 percent to 26 percent in the same period.
From 2009-10 to 2010-11, grant aid for full-time undergraduate students increased by an estimated 7 percent, while federal loans declined by 2 percent.
Despite the rising costs, total postsecondary enrollment increased by about 22 percent between 2005-06 and 2010-11, according to the College Board.