Tuition costs rocket in US

Tuition fees at public universities in the US rose this year by nearly 10 per cent - the highest rate in a decade and nearly seven times the inflation rate - as state governments cut taxpayer support for higher education, according to new figures.

At the same time, the cost of attending a four-year private university went up nearly 6 per cent, or four times the rate of inflation - a rise blamed at least in part on investment losses resulting from the decline on Wall Street.

In all, tuition at US universities and colleges has grown by 40 per cent above inflation in the past ten years. In the previous decade, it rose at a pace that was 60 per cent above inflation.

The figures were released by the College Board, an association of colleges and universities, which noted that financial assistance to students had increased. But a growing proportion of that aid is in the form of loans, not direct grants, and more and more of it is awarded on academic merit rather than on financial need. This trend, which is blamed on institutions' anxiety about their positions in performance rankings, makes it harder for poor students to pay for education.

With some exceptions, universities continue to offer little evidence that they are doing much to hold down costs. They have little incentive to do so because there is an abundance of students. Also, few have attempted to explain why their costs are increasing so much more quickly than those of other goods and services.

"These are very challenging times," said College Board president Gaston Caperton.

Dr Caperton, a self-made millionaire who previously worked in the insurance industry, said the rise in public-university tuition resulted from a decline in tax revenues. More than three-quarters of US university students attend public institutions.

Prices at private institutions have risen because "the cost of providing an education is much more salary and benefit and human resource-driven" than other services, said College Board spokeswoman Kathleen Payea.

"The other thing that drives it is consumer demands: providing technology and updating campuses for technology purposes is expensive, and it's something students demand."

Including room and board, a four-year public university costs just under $10,000 (£6,400) a year, a private four-year university, just over $25,000. Meanwhile, the proportion of financial aid in the form of loans instead of grants has increased from 47 per cent to 54 per cent in the past decade.

Dr Caperton said a US university education was still "remarkable value". The College Board's report says that, over their careers, university graduates can expect to earn an average of $1 million more than their counterparts without a university degree.