(Bloomberg News) Tuition and fees at U.S. public universities soared 8.3 percent this year, twice the rate of inflation, to an average $8,244, a College Board report found. Nonprofit private college costs rose 4.5 percent to $28,500.
Surging tuition has left the average college graduate with more than $20,000 in loans, according to the College Board. In response, President Barack Obama's administration said late yesterday that it will use its executive authority to reduce loan payments for millions of students.
Borrowers struggling to repay student loans and unable to find jobs are joining protesters at Occupy Wall Street tent cities around the country. Federal and private college loans -- now approaching $1 trillion -- surpassed credit-card debt in June 2010 for the first time, according to Mark Kantrowitz, publisher of FinAid.org, a college grant and loan website.
"While the importance of a college degree has never been greater, its rapidly rising price is an overwhelming obstacle to many students and families," College Board President Gaston Caperton said today in a statement.
In-state tuition and fees at four-year public universities rose the most since the 2004-2005 school year. The increase at private colleges was similar to last year's rate. Only a third of students pay the published price of tuition because of scholarships, the College Board said.
Public universities, supported by state taxpayers, tend to increase tuition when legislatures cut budgets, as is the case in California, Sandy Baum, co-author of the report, said in an interview. California, which raised in-state tuition and fees 21 percent, the most in the U.S., enrolls 10 percent of full-time, four-year college students, the College Board said.
Students left public universities with an average of about $22,000 in debt, up from $15,000 a decade ago, according to the New York-based College Board. At private colleges, they were saddled with about $28,000, up from $17,000.
The nonprofit College Board, whose members include universities, didn't have enough data to break out debt levels at those who attended for-profit colleges, Baum said. The median debt level for a bachelor's degree recipient at a for-profit college is $31,190, Education Trust, a Washington-based nonprofit research and advocacy group, said in a November 2010 report.
"To leave school with a lot of debt means that you are going to face even more difficult choices about starting a family, buying a home or whether you could take the risk for starting a business," said Lauren Asher, president of the Institute for College Access & Success, an advocacy group in Oakland, California.
Borrowers are defaulting on their student loans at the highest level since 1997, according to the U.S. Education Department. The latest rate, which applies only to the first two years students are required to make payments, rose to 8.8 percent in the two years through Sept. 30, 2010. It was 7 percent a year earlier.