Increased Federal Grant Aid Helps Some Cope With Rising College Tuition

October 28, 2010

Piggy banks increasing in size, biggest with a graduation hatCollege tuition and fees have gone up once again, but fortunately, so has federal grant aid for some students and families.

According to CNN Money, a College Board report showed that in-state tuition and fees at public four-year colleges went up 7.9 percent from a year ago to $7,605. The average cost for private four-year institutions rose 4.5 percent to $27,293.

Due to state budget cuts, public schools have increased tuition at an annual rate of 5.6 percent over the past decade. Tuition at private schools has gone up just three percent a year. "Public colleges and universities are getting less money from the states because the states just don't have money to give them," explained Sandy Baum, independent policy analyst at the College Board.

Cash-strapped states have been particularly hard hit. California State University students, for example, saw tuition jump five percent this year after increases of 10 percent annually the past few years.

Fortunately, a spike in federal grant aid has helped some families cope with the rising costs. According to The Chronicle of Higher Education, the federal government increased spending for grant aid in 2009-10 by about 72 percent from the year before. "If federal government hadn't stepped in, we'd either see fewer students going to college or see them taking out bigger student loans," said Baum to The Wall Street Journal.

As The Chronicle of Higher Education pointed out, most of the increase in federal aid was due to large increases in the Pell Grant program and veteran's benefits. Total spending on the Pell Grant went up 58 percent to $28.2 billion in 2009-10. More than seven million students received Pell Grants during that time--up from 6.2 million the previous year--because of a 16 percent increase in the maximum grant, which made more students eligible for the program.

Furthermore, as a result of the new Post-9/11 GI Bill, veteran's benefits also increased by 131 percent, to $9.5 billion, in 2009-10.

The additional grant aid helped the typical undergraduate pay less out of pocket. For instance, in 2009-10 the net price of tuition and fees at four-year public colleges was $1,140; the year before the net price was $1,680. During that same period, tuition at private non-profit institutions dropped from $11,720 to $10,270. Furthermore, despite the rising costs of college, when aid and tax credits were taken into account the average net price of tuition and fees is still lower than it was five years ago. According to CNN Money, in 2005-6 the cost of college was $2,080 at public schools and $12,750 at private schools. In 2009-10, the net price was $1,540 and $11,320 for public and private schools, respectively. "Recently, grant aid has gone up more than enough to compensate for tuition increases," explained Baum in The Chronicle of Higher Education. Unfortunately, she added, not everyone is eligible for Pell Grants or military benefits.

Compiled by Staff


"Federal Grant Aid Jumps as College Prices Go Up Again,", October 28, 2010, Beckie Supiano

"Tuition, Pell Grants Rise in Tandem,", October 28, 2010, Stephanie Banchero

"Rise in college costs hits public schools hardest,", October 28, 2010, Blake Ellis

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