The "sticker price" of college continues to increase faster than inflation, but increases in financial aid have kept the average 2009-10 net price for full-time students, after considering grant aid and federal tax benefits, less than the average net price five years ago. This is one of the countless trends highlighted by the College Board's latest release of the annual Trends in College Pricing and Trends in Student Aid reports. The reports also found that the number of private loans for higher education began to shrink even before the current credit crisis.

"One promising trend is the rapid decline in students borrowing nonfederal loans, which usually cost more and have fewer borrower protections than federal loans," said NASFAA Interim President and CEO Joan Crissman in a statement. "The decline in private loan borrowing was matched by an increase in federal loan borrowing thanks to recent changes that make federal loans more widely available."

The reports found that private student loan volume decreased by 52 percent in the 2008-09 school year due to tighter credit standards and increased availability of federal loans. Students and families borrowed an estimated $11 billion in alternative student loans in the 2008-09 school year, down from $22.8 billion in 2007-08.

Trends in College Pricing 2008 found that after adjusting for the 5.6 percent increase in the Consumer Price Index, average published tuition and fees declined this year by 0.8 percent at public two-year colleges and increased by just 0.7 percent for in-state students at public four-year institutions and by 0.3 percent at private four-year colleges and universities.

Financial aid, including both grants and federal loans, increased in 2007-08 by a per-student average of 5.5 percent after adjusting for inflation, according to the most recent aid data available. The estimated 2008-09 net price paid by full-time in-state students at four-year public colleges and universities is about $2,900, a reduction from a published price of $6,600. For full-time students at public two-year colleges, the average net price is only about $100, compared to the $2,400 published price, and for full-time students at private four-year not-for-profit institutions the net price is about $14,900, or $10,200 less than the published $25,100 sticker price.

"Another promising trend is that families are actually paying less out of pocket for college than they did five years ago," Crissman said. "While the 'sticker price' of college has increased, the actual cost for the average family has decreased thanks to increases in financial aid."

Increased Grant Aid

In 2007-08, undergraduate students received an average of $8,896 per full-time equivalent student in financial aid, including $4,656 in grant aid and $3,650 in federal loans.

After holding steady at 5.2 million for two years, the number of federal Pell Grant recipients rose by 5 percent to 5.4 million in 2007-08. The inflation-adjusted value of the maximum Pell Grant, received by students who are determined to have no capacity to contribute to college expenses from either their own or their parents' resources, increased in inflation-adjusted dollars for the first time since 2002-03. Total Pell Grant expenditures in 2007-08 were $14.4 billion, slightly lower than in 2004-05 but still much higher than 10 years ago.

In 2006-07, private four-year colleges and universities awarded an average of almost $7,500 per student in institutional grant aid, with about 70 percent helping to meet financial need. Public four-year institutions awarded more than $1,000 per student, with about 44 percent helping to meet financial need. Students Taking More Public Loans, Fewer Private

Increased Loan Aid

After two years of slow growth, federal education loan volume increased by 6 percent in inflation-adjusted dollars between 2006-07 and 2007-08, the years for which the most recent data are available. Over the same period, private loan volume declined slightly in real terms, from $19.2 billion to $19.1 billion. This decline followed an average growth rate of about 23 percent per year from 1997-98 to 2006-07. No data are available yet for this year, so the effects of the credit crisis on private education loans cannot be fully judged.

Trends in Student Aid 2008 includes new information on the amount of debt with which students graduate from four-year institutions. In 2006-07, bachelor's degree recipients who borrowed had an average of about $22,700 of debt, including private loans reported to their institutions. Including borrowers and nonborrowers, the average debt per degree recipient was about $12,400. Borrowers who graduated from private colleges had about 25 percent more debt than those who graduated from public colleges, while borrowers who graduated from for-profit institutions had about twice as much debt as those from public colleges. Tracking Enrollment and Degree Patterns

Trends in College Pricing 2008 and Trends in Student Aid 2008, including an online tool with expanded data and graphics, are available on the new Trends Web site at www.collegeboard.com/trends.

Media Coverage

Private Borrowing for College Drops Sharply, While College Costs Creep Up The Chronicle of Higher Education

Tuition Is Up, Loans Are Shifting Inside Higher Ed

Students Rely on Federal Loans to Pay Rising Tuition The Wall Street Journal

College Costs Keep Rising, Report Says The New York Times

College Costs Jumped $1,000 in 2009 U.S. News & World Report

College tuition is up sharply amid recession Associated Press

College tuition and fees rise, but so does student aid Daily Press

Economic woes fuel big college tuition increase nationwide Los Angeles Times

Private U.S. College Tuition Rises Most in 21 Years Bloomberg

Public college costs rising faster than private Washington Post

Posted 10/21/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.