A new college tuition survey by the National Association of Independent Colleges and Universities holds some, but small, comforts for parents. While tuition and fees at private colleges and universities increased 3.9 percent for the 2012-13 school year, this is the smallest increase on record.
This is the fourth consecutive year that the percentage increase in tuition has stayed below pre-recession rates, the NAICU announced. It is also the first time in at least four decades it has been below 4 percent.
The NAICU’s responding 445 colleges and universities expanded their student aid budgets by an average 6.2 percent his year, following increases of 7 percent, 6.8 percent and 9 percent in 2011-12, 2010-11, and 2009-10, respectively.
Since the economic downturn, private colleges and universities across the nation have redoubled efforts to cut their operating costs, improve their efficiency and enhance their affordability, NAICU President David L. Warren said in a statement. “More will continue to be done by private institutions to stay affordable and within reach of families from all backgrounds.”
College costs are having the biggest financial impact on investors ages 40 and younger, who are most likely to dip into savings and current earnings to fund tuition increases, according to a Millionaire Corner survey of more than 1,400 investors conducted in July.
Roughly one-fourth of investors ages 40 and under say they will be spending more on college costs this year compared to last. Increases in tuition, fees and other college costs are the reason cited by 64 percent of the younger investors, members of generations X and Y. But, one-in-five say they are experiencing a greater financial burden because they are unable to obtain credit, and will be funding college costs from savings and current earnings
Concerns about rising educational expenses are felt even in the wealthiest households, according to Millionaire Corner research. Forty-five percent of high net worth individuals – those with investable assets of $5 million to $25 million – say they are worried about their grandchildren’s educational expenses – up from 40 percent last year. One-fourth is concerned about financing their children’s college education, compared to 11 percent last year.
A significant share of investors also supports the notion of students paying their own way. More than 40 percent of the more than 900 investors surveyed by Millionaire Corner said it’s important for students to pay their own college tuition. Yet 40 percent also said it was important for students to graduate from college debt-free.
Student debt in the U.S. now tops $1 trillion.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.