Fear you'll never be able afford college tuition? Schools are feeling your pain. More colleges and universities, both public and private, are trying to make themselves less expensive -- and more attractive -- by experimenting with ways to offset rising costs and mounting debt.
College costs have skyrocketed past the rate of inflation year after year; tuition, fees and living expenses can now top $45,000 a year at some private schools. They're expected to rise yet again, by nearly 6 percent, according to the National Association of Independent Colleges and Universities. State-school costs are lower, averaging $13,000, but annual increases can fluctuate, depending on the state's fiscal stability.
As tuition rises, so does a family's share of the financial burden. According to the U.S. Department of Education, students carry more than $8,000 a year in education debt.
Approximately 50 higher-education institutions, from Amherst College to Yale University, are making attempts to lower the burden. New programs include freezing tuition, offering grants over loans, and changing financial-aid formulas to lower families' contributions. Unlike past efforts that mostly focused on helping lower-income students, these new moves are also aimed at helping more affluent families feel less pain.
Helping students be debt-freeThe latest to change its ways efforts is Davidson College, a top-ranked liberal arts school near Charlotte, N.C., which will eliminate all student loans from its financial aid packages starting this fall. Instead, it plans to boost its endowment and provide all its student aid in the form of grants and work-study. In doing so, Davidson becomes the first liberal-arts college in the U.S. to adopt the policy of helping students graduate debt-free.
In the last school year, a quarter of the school's 1,650 students received loans. At $39,000 a year, tuition is not cheap. So the main goal of Davidson's new initiative was to make economically disadvantaged students put off by the high numbers think twice, says Christopher Gruber, Davidson's dean of admissions and financial aid. "Students were skipping past us because they looked at the sticker price and said, 'Why even bother?' We wanted to crank open our doors even further."
Davidson is making a smart marketing move, says Terry Hartle, senior vice-president of the American Council on Education. "It's a very respected college, but not well-known outside the Southeast. This will give it more national attention, and I suspect they'll be receiving thousands more applications this year." It's too early to tell, but Gruber says the school had a spike in acceptances from those offered admission for the fall semester.
Hartle says other liberal arts colleges would love to follow in Davidson's footsteps, but few have the funds to do so. Still, Davidson has an endowment of only $420 million, so leaders will still have to scramble get the millions it needs from other sources. The program will cost about $1.8 million a year for students now on aid. Leaders expect the number of needy students to grow to about 40 percent, which would cost $3.5 million a year. Trustees already have raised $75 million to pay for the first few years of the effort. Gruber says new money will be raised, instead of tuition, to fund future grants. "This is not a Robin Hood program, it won't take away from other programs."