Start collecting Social Security at 62 — or wait?

Why has tuition in college risen in the last years? Is this trend going to continue? And why the government is not doing anything to help us to pay for our studies?
— Siraj B.,  Fort Lauderdale, Fla.

Tuition is rising because the costs of providing your education — from professor salaries to the heating oil needed to keep the dorm warm in — is rising. But, somewhat mysteriously, costs have been rising faster on college campuses than everywhere else. One could argue that tuition is rising because demand is strong for college education and students (and their parents) have no choice but to pay it. Demand will remain strong as long as people with a bachelor’s degree earn more — by one estimate as much as 62 percent more on average — than those with only a high school diploma.

And yes, it's going to continue. Between 2000 and 2004, tuition at public, four-year universities rose by 32 percent — to $11,441, according to a report prepared this summer by Senate Democrats. At private four-year colleges, during the same period, the increase amounted to 21 percent to 26,489. (And during that period, overall inflation — as measured by the Consumer Price Index — rose a little less than 10 percent.)

The rapid rise in tuition is a big reason that, between 1993 and 2003, the average student debt more than doubled to $17,400. But despite the rising costs and bigger debt loads, Congress earlier this year cut some $12.7 billion in federal student aid — the largest cut to federal financial aid in history.

With two kids in college, we wish we knew why our government didn't do more to help. Today college students are going to compete in a global job market against workers from other countries that are willing to invest more in preparing the next generation for the workforce. From where we sit, our nation's policy toward education — from K-12 through graduate school — is miserly and short-sighted.

I have a home equity loan with a balance of approximately $19,500. The interest rate is 7.1 percent. I have a credit card with a rate of 3.9 percent good for the life of the loan. I would not use this card for any purchases. Am I better off to transfer the home equity loan balance to the lower APR or is it pretty much a wash?
-- Dave A., Delphos, Ohio

If the 3.9 percent rate is truly fixed for life, go for it. But such an offer is highly unusual. Go back and read the full credit agreement (the fine print) and be sure you haven't overlooked terms that allow the rate to rise in the future.

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