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Get ready! Cost of college is going up

The cost of State U. keeps going up.

Blame it on the slumping economy.

Budget shortfalls in many states have prompted state universities and colleges all over the country to hike tuition.

"State economies are in really, really bad shape," says Carl Krueger, policy analyst at the Education Commission of the States. "When state economies aren't doing well, one of the first services that gets cut is funding for higher education."

If you attend a public college or university, there's a good chance you'll be paying more for your classes this fall. It was a similar story last fall, but this year's tuition increases look to be even steeper.

Last year, tuition at state universities shot up 9.6 percent or about $350, according to Travis Reindl, director of state policy at the American Association of State Colleges and Universities.

This fall, tuition at state colleges is expected to increase by at least 12 percent or $500. And some schools are socking students with much higher increases.

The University of Missouri is boosting its tuition by 19.8 percent. At Kansas State University, last year's 25.1 percent tuition increase just wasn't enough. KSU is hiking tuition by another 20.3 percent this fall.

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After heavy increases last year, students at state colleges and universities in New York and California may be forced to swallow tuition increases of 20 to 25 percent and higher this fall.

"The increases we're seeing this year are clearly abnormal," Reindl says. "They're much higher than they would normally be. And we can blame it on a sluggish economy. We're in for a couple of tough years."

If you think you'll be spared from tuition hikes because your son or daughter attends a private college or university, think again. Tuition at private colleges and universities is expected to increase 5.8 percent in the 2003-2004 school year. And since the cost of attending a private college is $18,273, a measly 5.8 percent tuition hike adds up to an extra $1,060 a year.

"A single-year increase of $1,000 -- that's going to hurt too," Reindl says.

Not sure how your family will be able to cope with soaring college tuition costs? These articles from Bankrate.com may help:

Paying for college by installment plan
Why not pay by installment plan? A hefty tuition bill won't seem so insurmountable once it's broken into pieces. An installment plan lets you pay for a son or daughter's tuition with several payments over the course of a school year. Many plans allow monthly payments. Others allow up to three payments each semester.

Your best bet is to contact the university's financial aid department as soon as possible. Many schools have emergency loans and grants available. A drop in family income may make a student eligible for additional financial aid. Parents may be eligible for additional loans as well.

You won't know what a college or university can do to help your family, until you make that call. Don't put it off.

On July 1, the interest rate on federal Stafford loans dropped from 4.06 percent to 3.42 percent and the interest rate on federal PLUS loans dropped from 4.86 percent to 4.22 percent. These rates remain in effect through June 30, 2004.

So even if your family ends up borrowing more money to pay for college this fall, at least you'll catch a break on interest rates.

-- Updated: July 22, 2003

See Also
12 money-management tips for college students
Student loan rates reach record lows
Good time to give a community college another look
Frugal U. definitions
More Frugal U. stories

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