Paying The Price For College
The average college tuition is rising at twice the rate of inflation. Why?
Some schools say they have to keep up with rising costs but others manage to lower tuition, reports CBS News Correspondent Anthony Mason.
As the back-to-school serenade played on campuses all over the country this month, the Hellands from Minneapolis were helping their daughter Laura settle in for her freshman year at the University of Southern California.
Laura is off to college. Now John Helland has to figure out how to pay for it all.
"It means probably I won't be able to retire until probably I'm 75. But that's OK; I can handle it," says John Helland.
The bill for Laura is $22,000. And that's before room and board. Tuition at the USC jumped 6 percent this year, but the university president says it's still a bargain.
"I would say [the] full cost is comfortably $10,000 a year beyond what we're charging for full-price tuition," says Steven Sample, university president.
In public and private colleges, the average tuition is rising at twice the rate of inflation. Schools say they have to keep up with rising costs for technology, campus improvements and teachers' salaries.
"The best faculty cost a lot," Sample says.
But the bull market has made many universities rich. Over the past four years, endowments are up 75 percent. About a dozen schools now have $3 billion or more in the bank. But at most, tuitions are still going up.
Why does the tuition keep going up? Attorney Edward Costikyan says it is "because they don't spend the money."
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| Students returning to USC this year are paying more than ever for tuition. |
Costikyan is a former trustee at Columbia University and has studied endowment spending for the American Council of Trustees and Alumni. Costikyan himself gave $50,000 for scholarships to his alma mater.
"And after six years, it was up to $117,000," he says.
While his gift had grown 20 percent a year, Columbia had handed out just 3 percent.
"And I said, 'Why don't I just hand out the money myself to the kids?'" Costikyan says.
Schools are offering more financial aid but for many it's still not enough.
Colin Ward was accepted to Boston University but the cost is $30,000. And even with an $18,000 scholarship, Colin's family still couldn't afford it.
"Well, I mean it's a slap in the face," says Colin. He had every credential except the money.
Instead Colin enrolled at the University of Massachusetts in Boston. UMass is one of the few schools where tuition is actually going down. Governor Paul Cellucci has insisted on it.
"Four years in a row we've seen reductions at the University of Massahusetts," Cellucci says.
Half a dozen other states are trying to curb or cap tuition increases. But in truth, colleges can raise their fees, because they have no shortage of customers.
"At USC last year we had 25,000 applicants for 2,800 freshman positions, Sample says.
The Hellands paid the price.
"She's our only daughter, and we love her dearly. She deserves to go to the best school she can go to," says John Helland.
Many parents just endure the pain.
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