Increases in Tuition Across the Nation

This year, college students and parents at many schools are facing large tuition increases. The average cost of a 4-year private school for the 2009-2010 school year is $26,273 (up 4.4% from last year), and the average cost for a 4-year public school is $7,020 (up 6.5% from last year)¹. With more parents out of work due to the current economic conditions, and less companies hiring college students for part-time work, many families are having a tough time covering the increased cost of tuition.

Why Did Tuition Increase?

Colleges often increase tuition yearly to keep up with the cost of living. Just like many other non-profit businesses, colleges are not immune to the current financial crisis. You may not realize that colleges often place their endowment funds in investments, such as stocks and bonds. That means that when many investments lost value in the 2008 stock market decline, so did these schools. Schools that experienced a decline in funds may now have significantly less money available for scholarships and other financial aid, and less money to maintain and make improvements to their buildings and other facilities. In addition to the decline in endowment funds, colleges are having trouble raising funds through alumni donations. With alumni out of work, and less money to donate, college fundraising drives are falling short.

Will There Be Future Tuition Increases?

Although not every college will be raising tuition this year or next, the financial situation for colleges is not going to change overnight. With a depleted endowment fund and smaller donations, colleges may have to continue to increase tuition next year and beyond. Hopefully your school is in good financial shape and is working on ways to avoid, or at least reduce, future tuition increases.

How Can I Cover College Tuition Increases?

If you are having a hard time covering college expenses, make sure you speak with your school’s financial aid office. If your financial situation has changed significantly since you received your financial aid award letter (i.e. mom or dad lost their job, medical emergency in the family, etc), work with your financial aid counselor to see if you can adjust your award package. These days, you might have to work harder by applying for more scholarships at your school and on the web. Once you’ve exhausted free money, you might consider taking out federal student loans.

If federal loans aren’t enough, you should begin researching alternative student loans. Alternative loans are credit based; you will likely need to find a creditworthy co-signer in order to be approved. Check out Alternative Loan Zone for more information on alternative student loans.