.

SmartMoney Blogs

Real-Time Advice
Our real-time advice on how market shifts and news impact you and your money

As College Costs Rise, Savings Shrink

Just as many parents are discovering their college savings have taken a hit, a report released today shows tuition costs continue to climb.

iStockPhoto

In-state tuition and fees at four-year public colleges for the school year beginning this fall rose by an average of 8.3% from last year, to $8,244, according to figures from the College Board, a nonprofit that conducts college research. At private colleges, tuition and fees rose by an average of 4.5% to $28,500.

The cost increases come as millions of parents are finding out that their college savings plans lost money in the third quarter. As we reported earlier this month, investments in 529 plans, which are state-sponsored tax-advantaged accounts for college savers, fell an average of about 9% in the third quarter, according to Morningstar. That was the most significant setback for these plans since early 2009.

The average college-savings plan is down about 6% for the year.

Longer term, college savings plans haven’t kept up with tuition increases. For the last five years, average tuition and fees have risen 41% for in-state public college students and 28% for private college students. Meanwhile, the average 529 plan has returned about 5% over the same period. “It’s part of an ongoing trend of decreasing college affordability,” says Mark Kantrowitz, publisher of FinAid.org and Fastweb.com. “[The] ability to pay continues to decrease.”

To be sure, parents are getting some help. Savings from tax credits have hit a record high, with the average annual tax savings per recipient totaling $1,329 in 2009, up 32% from 2008, according to the latest data from the College Board. Meanwhile, 35% of students received federal Pell Grants during the 2010-11 academic year, which provide a maximum of $5,500 to eligible students. That’s up from a maximum of $5,350 in 2009-10.

But for some higher income families this aid may be of little consolation. For example, less than 1% of families making $100,000 or more per year receive Pell grants, according to FinAid.org. And while American Opportunity Tax Credit is available to families making up to $180,000, the maximum annual tax credit represents less than 10% of the average cost of attending a private college.

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (4 of 4)

View all Comments »
    • By WebOsPublisher

      Chameleon Icons 1.0 from Softshape. Make icons from BMP,JPEG,GIF,PNG,PSD,TGA and TIFF images.
      Shareware: Chameleon Icons 1.0 – Download-By.net
      Download-By.net
      Submit software
      Multimedia
      Business
      Communications
      Desktop
      Development
      Education
      Games
      Graphic Apps
      Home $ Hobby
      Net $ Internet
      Security $ Privacy
      Servers
      System Utilities
      Web Development
      Other Software
      Publishers
      Graphic Apps > Icon Tools > Chameleon Icons 1.0
      Chameleon Icons 1.0
      Download:DownloadPublisher:SoftshapeRelease date:2006-09-12File size:3524 KbType:SharewarePrice:49 $Description:Below advertisement
      Description:Chameleon Icons converts images of any format into Windows icons with just a few clicks. Convert any picture or photo in BMP, JPEG, GIF, PNG, PSD, TIFF format into icons for your Windows desktop, applications, folders, email and ICQ contacts. As it supports Windows XP icons in 32-bit color depth with an alpha channel, you can easily create semi-transparent XP icons. Chameleon Icons is equipped with a rich frame styles collection.
      2000 char. description.
      Chameleon Icons converts images of any format into Windows icons. Any images that you find on the Internet you can convert to icons for use on your Windows desktop, in applications and anywhere else.
      As it supports Windows XP icons in 32-bit color depth with an alpha channel, you can easily create semi-transparent XP icons. Now you can turn any image into an icon with just a few clicks.
      Make your Windows folders different by assigning eye-catching icons to each of them. The simple Chameleon Icons interface makes it easy to make every folder look special.
      Key features:
      - Create Windows Icon with a single action
      - Make cool e-mail shortcuts for your contacts using any photos
      - Skin your folders – assign a fun icon to any folder
      - Create unique AIM buddy icons and ICQ user shortcuts
      - Get started quickly – easy user-friendly interface and Help get you going right away
      - Chameleon Icons is equipped with a rich collection of frame styles including geometric, Document, ICQ User Shortcut, Skinned Folder, E-Mail Shortcut, Artistic and Nationals Flags.
      Chameleon Icons: a great way to create icons using any picture or photo.Read more on the website
      User comments:
      Write a comment!
      Your name: Commnet:
      Download-by.net does not support the use of pirated software. Instead of using a “free” crack or serials to programs that you have not bought, you should buy the software. You support future software development by not using cracks or a serial key that is not your own.
      Program info:Operating systems: Win95, Win98, WinME, WinXP, WinNT 3.x, WinNT 4.x, Windows2000, Windows2003System requirements: 64 MB RAM (128 MB Recommended), 10 MB HD, SVGAInstallation: Install and UninstallLanguages: English, RussianRelease status: New Release
      Popular programs
      Icons from File
      Microangelo On Display
      Any To Icon Pro
      ExeIcon.com Icon Extractor
      Turbo Icon Editor
      Submit PAD file | Disclaimer | ContactCopyright 2012 Download-By.net

    • Paying more is not a better university education. I love University of California (UC) having been student & lecturer. But today I am concerned that at times I do not recognize the UC I love. Like so many I am deeply disappointed by the pervasive failures of Regent Chairwoman Lansing, President Yudof, Chancellor Birgeneau from holding the line on rising costs & tuition increases. Paying more is not a better education.
      Californians are reeling from 19% unemployment (includes: those forced to work part time; those no longer searching), mortgage defaults, loss of unemployment benefits. And those who still have jobs are working longer for less. Faculty wages must reflect California’s ability to pay, not what others are paid.
      Current pay increases for generously paid University of California Faculty is arrogance. Instate tuition consumes 14% of Ca. Median Family Income!
      Paying more is not a better education. UC Berkeley(# 70 Forbes) tuition increases exceed the national average rate of increases. Chancellor Birgeneau has molded Cal. into the most expensive public university.
      UC President Yudof, Cal. Chancellor Birgeneau($450,000 salary) dismissed many much needed cost-cutting options. They did not consider freezing vacant faculty positions, increasing class size, requiring faculty to teach more classes, doubling the time between sabbaticals, cutting & freezing pay & benefits for chancellors & reforming pensions & the health benefits.
      They said such faculty reforms “would not be healthy for UC”. Exodus of faculty, administrators? Who can afford them and where would they go?
      We agree it is far from the ideal situation, but it is in the best interests of the university system & the state to stop cost increases. UC cannot expect to do business as usual: raising tuition; granting pay raises & huge bonuses during a weak economy that has sapped state revenues & individual Californians’ income.
      There is no question the necessary realignments with economic reality are painful. Regent Chairwoman Lansing can bridge the public trust gap with reassurances that salaries & costs reflect California’s economic reality. The sky above UC will not fall

      Opinions? Email the UC Board of Regents marsha.kelman@ucop.edu

    • West Texas A&M University is bucking the trend: next year all out of state students will pay Texas resident tuition + $30/per credit hour. And annual tuition is less than average at US universities according to the new College Board report. Info is at http://www.wtamu.edu/admissions/tuition.aspx

    • Every qualified California student should get a place in University of California system. That’s a desirable goal for a public university. However, UC Berkeley Chancellor Robert Birgeneau displaces Californians qualified for education at Cal. with $50,600 tuition Foreigners.
      UC tuition increases exceed the national average rate of increase. The University of California Board Of Regents jeopardizes Californians attending higher education by making UC the most expensive public university in the United States.
      Self-serving tuition increases are used by UC President Mark Yudof to increase the pay of 80,000 eligible faculty and others. Payoffs like these point to higher operating costs and still higher tuition for Californians. Instate tuition consumes 14% of Ca. Median Family Income!
      I agree that faculty in higher education and senior management, like Yudof and Birgeneau, should consider the students’ welfare and put it high on their values.
      Deeds unfortunately do not bear out the students’ welfare values of campus senior management and the UC Board of Regents.
      Opinions to UC Board of Regents, email marsha.kelman@ucop.edu

About Real-Time Advice

  • How breaking news — in the markets, Washington, and around the world — affects you and your money. Have a question about how current events may change your financial future? Email us at ask@smartmoney.com.

.