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Last-minute tuition hikes hit students

Almost 20 states have cut funding for colleges, raising costs for students -- starting now.

By MSN Money Partner Jul 11, 2011 10:37AM

This post comes from Annamaria Andriotis at partner site SmartMoney.

With freshman orientation right around the corner, many college students and their parents are about to get a surprise that could derail years of careful financial planning: last-minute tuition increases and cuts to financial aid packages promised just a few short months ago.


As states have finalized their budgets in recent weeks and months, cuts to public college funding have started to trickle down to parents and students. Since March, at least 19 states have cut money for public colleges. Some states, including Illinois and Georgia, are also slashing grants awarded to students just a few months ago.


Still more families won't find out about changes to tuition and financial aid packages until the end of the summer or even after the semester begins -- what experts say is the longest delay ever. "This will create real hardship for these students and may impact directly on their ability to enroll this fall," says Tom Horgan, president of the New Hampshire College and University Council. (Are you saving enough for college? Try MSN Money's calculator.) Post continues after video.

Long the affordable alternative to private colleges, tuition and fees for public schools have already been climbing rapidly. They're still much cheaper -- tuition and fees averaged about $7,600 for the 2010-2011 school year, compared with $27,300 at private colleges, according to the College Board -- but the new increases aren't trivial.


Last month, Texas and New Hampshire announced 6% to 10% tuition hikes at some public universities. A spokesman for the Texas Higher Education Coordinating Board says that as of now, the hikes impact two out of 35 colleges, with the potential for more to come. This month, California's four-year colleges are seeking to increase tuition by up to 12%, on top of an 8% to 10% increase that was announced earlier this year.


Worst year ever

"Public colleges and universities across the country have been put in a terrible bind," says Daniel Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities. "This academic year will be the worst on record in terms of public higher education funding."


In addition to tuition increases, the most generous portions of financial aid packages may also never materialize. In June, New Hampshire ended all state grants. Earlier this year, Georgia and Illinois awarded grants to students in financial aid packages, but the states recently scaled back those programs. For the upcoming year, Georgia's merit-based Hope Scholarship, which covered 100% of tuition costs, will instead pay for approximately 87% of tuition rates at the state's public colleges. The amount awarded by Illinois will remain the same for the fall semester but will likely be smaller in January.


The delay could give students additional time to make a plan, says Katharine Gricevich, director of government relations at the Illinois Student Assistance Commission. She says the financial aid letters students received listed an estimated grant amount and specified that grants could be reduced due to state funding problems. Still, she says, the commission is hopeful that there will be additional funds to minimize cuts in the second semester.


The states blame declining revenue. With less money coming in from property, sales and income taxes, they're looking for other ways to rein in their budgets, and colleges are a prime target. A spokesman for Georgia's Board of Regents says revenues from the state lottery, which funded the state's Hope Scholarship program, are not keeping pace with the demand for the scholarship.


What to do

Federal funding is at fault also: States have been receiving millions of dollars since 2009 from the federal stimulus, but that money has run out now. As state and federal governments cut their support of the schools, the schools look to parents and students to make up the difference.


At this point, there's little parents and students can do to cushion the shortfall. They can contact the college to find out if they're raising tuition further, or ask the college's financial aid office to provide more free aid if the state lowers their grant money, says Mark Kantrowitz, publisher of, which tracks financial aid issues.


For more radical results, a student could take classes at a local community college for a year or a semester. Those courses are typically much cheaper and can often be transferred for college credit.


Meanwhile, for students and families who are starting the process of shopping for colleges or saving for tuition, the cautionary tale seems clear: For the foreseeable future, public college tuition prices and financial aid promises may be unreliable.


More on SmartMoney and MSN Money:

Jul 12, 2011 12:03PM
And one more thing, I grew up poor, below the poverty level.  I was born in 1974, and the only free program I ever got on was the school lunch program.  No health care, no dental, no nothing.  I started working at 13 and paid for everything that I needed (food, shampoo, tampons, clothes) because my parents certianly weren't supporting me. I moved out of the house at 17 and swore my life would be different than my parents (who like to suck from the system).  So to people like the first commenter who blam republicans, I say GET A JOB (or two!).  I am not rich, but I work hard and pay my way, and this is what I think is fair and how it should be for everyone. 
Jul 12, 2011 11:49AM
I've been going to school at a CC in CA for the last three years and I am finally transferring to a CA State university this fall.  First, I think the units at the  CC are way too cheap and the aid way too high.  Why you ask?  This is because I don't qualify for aid, so I bust my **** to work, pay for books and tuition, and fight to get into the classes I need because there are so many students and too few classes, and then I bust my **** to make straight A's.  So I'm finally in a class I need and who is sitting next to me?  Someone who is poor and their parent's never went to college, so they are on some program that gives them priority so they don't have to build up units taking useless classes like I did to start taking the classes they actually need.  They don't appreciate this opportunity, they don't try, they don't study, they drop out half way through the semester because it's too hard.  In fact, I hear these types of students around me, complaining about how they haven't gotten their book vouchers yet, (I shell out $100's every semester for my books) and then they complain about the parking, and the teachers, and what a joke school it is they are going to.  They complain about the course load, and in class they are generally annoying.  They don't work because they are on some government grant program to rehabilitate them, or whatever, or maybe they are just poor, or who knows.  They are a drain on CC's, and a drain on society!!  What about someone who bust's their ****, pays their way, and get's straight A's... is there any kind of priority program for them?  Nope.  I say, it's time to raise rates, slash government programs, and make people actually start paying their own way.  Stop complaining people, suck it up and get a 2nd job if needed.  You'll appreciate what you achieve a lot more... and it just might make more room for the rest of us who actually pay our own way in this country instead of sitting around complaining about everything.
Jul 12, 2011 9:24AM

Our college system is broken.  It's not just the funding issue, but the product itself.  We spend way too much time getting a degree, because we have to take courses that have nothing to do with our field of study.  Why does a physics major need geography classes?  Europeans take around 3 yrs to get a bachelor's.  I admit I don't know what they pay for it, but it can't be more than we're spending.


Employers need to understand that a great many jobs don't require a degree and hire accordingly.  They would also save on labor costs as people without degrees generally make less.  Think how much we would save the country if more people didn't have to go to college just to get entry level jobs.


And why don't we have apprenticeship programs in the US?  Plumbers and electricians make damn good money, at least judging from what I've been paying them.

Jul 12, 2011 11:37AM
I still think that we need to revamp our whole education system. From the elementary level to grad schools. The college tuition in our state has gone up double digits 4 years in a row and it was just announced that tuition will rise yet again for the next semester by 26%. What are they doing with all of this money? Padding the pockets of the elite profs? Who knows. For a nation that seems to hold education dear we seem to have completely dropped thew ball.
Jul 12, 2011 3:40PM

Tuition will continue to be a problem at these and all schools as long as Gubmn't money is there for students to go endlessly into debt.


These schools don't give a rat's rear end about student debt loads.  They know you're going to go to Uncle Sam like good little lemmings and just pile it onto yourself.  Get the Federal Government out of funding 5 year liberal arts degrees to infinity and after the Universities bleed for a few years you'll start seeing them respond to something more within reason, or die.


The market needs to be injected back into Higher Education.  They have had their caviar and bubbly in their ivory tower setups for way too long.  Time to produce the 'results' they claim they can give people, and at a reasonable cost.

Jul 12, 2011 9:42AM



Companies use to do that, but due to numerous rulings against companies in the past for creating adverse impact, companies no longer want the responsibility for screening candidates for jobs. It is better just to announce the position as needing a degree and let the colleges sort everyone out. Companies figure that if someone can make it through college, then they are at least qualified at the entry level.


So we can thank our equality for all statutes that have little to do with equality, but burdening companies to prove why they hired someone voer someone else, which can get expensive. Or just not deal with it at all and offshore everything possible.

Jul 12, 2011 2:35PM
To Wa. state Univ. Its crazy , I know. We have no set amount for any planning and when we did plan ( look at 2010 begining year tuition) it was raised before WSU knew ( or did know) the outcome of the budget cuts in our spendaholic, special programs Wa state gov't. It jacked up 30% from Fall 2010  then 16% more when I blinked for 2011. How about those regents and professor salaries!! look what Wa State has done for them! allowed the salaries to run wild. I am all for making money, but in the public sector we have been taken advantage of. Now we also pay to get oriented at the school , what that isnt covered in tuition?? They nickel and dime for everything, ridiculus Are there any cuts loomimg on their salaries?? Have not heard of any. There has got to be plenty of inefficiency, like our Wa. State gov't.
Jul 12, 2011 3:27PM

To T.J. in LV, while you were taking time out of your life to "find yourself" and wait until you were 24 so that you could recieve student loans, how much did you work and save to help pay for tuition once you started?  There are solutions for paying for a BA that don't involve taking out $40K in loans, so that debt is all on you, and no one's fault but your own.

Jul 12, 2011 4:33PM

Schools are nothing more than government run union factories that subsist on NO responsibility for quality control, production levels, and complete  disregard for the wishes of their taxpaying bosses as well as a completely unacceptable use of government appropriations that were only given as an aid to keep tuitions low, but instead are used exclusively for back door income from research projects!






Jul 12, 2011 12:05PM
The problem is that Americans want their entitlements - cheap education being one of them.  That's not what made America great.  Here, you have the right to make a dollar.  Education is a business, as is government, etc.   All those things require money to operate.  To think otherwise is just naive.
Jul 12, 2011 1:07PM
Tuition prices really have been a problem. My school (WSU) hiked up tuition by 17% this year and plans to raise it by another 13% next year. I am currently claimed as a dependent, and my parents were unemployed with $0 income last year. The financial aid advisers I spoke with were pretty optimistic that I would get receive more grant money than I have in the past. Turns out, when my parents reached into their retirement funds in order to pay for our health insurance, it counted as a form of income on the FAFSA. I am receiving no grant money, and WSU is asking for my parents to take out nearly $9,000 per semester in parent plus loans along with my $3,000/semester subsidized and unsubsidized personal loans. I am 1 1/2 years away from graduating, and I am very worried about being able to finish. Many of my credits will not transfer to other schools, but I also know that if I drop out of school now, I will be paying back my loans earning minimum wage for a very long time. :(

Jul 12, 2011 12:17PM

How terribly sad.  To think, without the promise of education, our children will fall further behind.  Maybe we should outsource and send our kids to India.  No Jethro, I don't blame Obama.  


It's interesting to see things like education and health care rising while wages remain stagnant.  I understand schools are accepting less instate students because they make more on the out of staters.


One solution:  My parent's couldn't afford to send me to school.  I had to wait until I was 24 to qualify for student loans.  It gave me some time to "find myself" and now I'm happy to say that I have 40k in student debt and job that has nothing to do with my degree. 


I agree with ghost writer, but we should start specializing in high school.  I think, especially in today's environment,  producing students who are experts in particular fields is far better than the "well rounded good- for-nothings" being churned out of today's universities.   

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