College Costs Are Up Again - part 4

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In some cases, the tuition increases at private colleges are not bringing the school any additional revenue, but are being siphoned directly into the school’s institutional aid budget, Baum said.

“It is really becoming a problem because schools are spending so much more on their financial aid budget, but they are not gaining extra revenue by increasing their sticker prices,” Baum said.

With prices on the rise, enrollment patterns are shifting, with a growing number of students considering two-year colleges and for-profit institutions as alternatives to four-year public and private schools, the College Board said. From fall 2000 to fall 2009, the percentage of all full-time students enrolled in for-profit institutions increased from 4
percent to 10 percent.

But even these schools are not immune to tuition increases. The College Board estimates that tuition and fees at private for-profit institutions now average $13,935, a $679 (or 5.1 percent) increase over 2009-10. At public two-year colleges, the sticker price is on average $2,713, $155 (or 6 percent) higher than last year.

Students considering for-profit colleges over private colleges shouldn’t just look at the sticker price when they are making a decision on where to attend school, Baum said. When a student factors in grant aid, the net tuition and fee prices are lower for many students attending private nonprofit colleges than for those attending for-profit institutions, the College Board said. We are working with one wayback machine archive.

The majority of students heading to college today are becoming increasingly sensitive to rising college prices, forcing them to look for alternatives, whether it is community colleges or for-profit schools, said the Center for College
Affordability & Productivity’s Vedder, who is also an economics professor at Ohio University.