Families await sharp increases in college tuition

updated 12:00 a.m. ET Jan. 15, 2009

Most high school seniors and their families have not made final college plans for next fall. But they know this: It's probably going to cost more than they had planned.

Even in good economic times, states and colleges have largely failed to hold tuition increases in line with inflation. Now as the slumping economy forces states to slash spending, students can expect the sharpest increases in years.

Families are calling on colleges to absorb as much of the burden as possible instead of passing the extra costs on to students.

"In my business, my customers are asking me for price concessions," said John Schock of Raleigh, N.C., who works in sales for a company in the automotive industry and whose son is looking at colleges. He said colleges "have an obligation as well."

State budgets will determine final prices
Final prices will not be set until state budgets are finished in the coming months, but the trend is clear. In California, the governor's proposed budget would raise university fees around 10 percent. Florida's governor is trying to give several state schools more power to raise prices. And universities in both states plan to cut enrollment slots.

Other states could not wait until fall and have passed unusual midyear increases, including a whopping 14-percent increase in New York.

In previous recessions, state-supported institutions have raised tuition between 8 and 10 percent annually for several years running, said Nick Johnson of the Center on Budget and Policy Priorities in Washington.

"This recession is worse. This state fiscal crisis is worse than last time, so we would expect state tuition increases to be larger than in past years," Johnson said.

Students could see some relief at private universities, which may have less room to raise prices without losing business or looking greedy. Augustana and Princeton are among schools that have already announced their lowest tuition increases in at least 25 years. Merrimack College and Benedictine University have announced freezes for next year.

But four in five American college students attend public schools.

Larger classes, fewer admission slots
Many colleges are making budget cuts, but that's hardly good news for students. It means larger classes and, in states like California, fewer admission slots in the state system.

Jim Boyle, president of the membership and advocacy group College Parents of America, said next year will be especially painful because so many families have lost college savings in the stock market, or can no longer tap home equity loans because of the real estate crash.

Donna Kopec, who lives in the Chicago suburb of Palatine, Ill., planned to use a mutual fund her parents opened for her daughter to help pay expenses at the University of Wisconsin-Madison. But that fund has lost one-third of its value, and an e-mail from the school about economic conditions left her alarmed — particularly because she has three younger children.

"We're probably going to have to take some options off the table (for the other children) unless things change," said Kopec, who works in book publishing. "It's not easy." She hopes President-elect Barack Obama will implement campaign promises such as offering college grants in exchange for community service.

Low-income students in particular could also get help from Obama's proposed economic stimulus package, which may include measures to improve college affordability, such as increasing the amount of Pell grants.

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