News Scrapbook 1986

Reaching for uition Colleges help families cope with rising costs Last in a series By Noel Osment Staff Wriler C ind1's father is a teacher earning a httle over $34,000 a year, and she is

one of three children in the family attending college. Tuition, room and board costs $13,320 per year at her university, the Un1Yers~ of San Die_gQ;__this is about average for a private college. So Cindi (the name isn't real, the figures are) and her family and the college financial office had to use some ingenuity to swing it. Based on federal government and USO guidelines, the USO financial office figured Cindi's available resources at $2,095 per year - $1,200 from Cindi's savings and the rest from her parents. · The remainder of her expenses, $11,222, comes from a mixture of loans and grants and a work- study program. In all, there are seven different sources of money in Cindi's financial package. This is not unusual, says USD financial aids director Herb Whyte, who recalls one 14-source package. But this is now. Things could be a lot tougher for the Cindis of the future, according to some financial forecasts. Educators, economists and analysts all agree that college costs are currently rising faster than the inflation rate, although few are willing to predict 18 years ahead and fewer still would probably be able to give an accurate prediction. Arecent survey by The College Board - a non-profit organization with 2,500 member colleges and other educational institutions - shows that this fall costs rose an average of 6 percent at private four-year colleges, and 5 percent at public colleges, while the overall inflation rate rose much less - 1.7 percent as measured by the Consumer Price Index. At the American Council on Education in Washington, an educational research and lobbying group, it is predicted that the average cost of education at a private college (tuition, room and board and other costs) will rise from $11,113 in 1986-87 to $12,511 in 1988 and 1989, accord.ng to associate researcher Cecilia Ottinger. Addel to this is speculation over the impact of federal

Baek to School mcome tax revision should 1t pa s m its present form A proJected curtailment of tax benefits for donations to colleges could decrease endowments, educators fear. This could mean less money for scholarships, thus raising tuition even more. And the future of various grants and loan programs could be in doubt given the size of the federal budget deficit. Altogether, Lh challenge of financing a college in years to come is formidable. To counter the challenge, a number of pl ns are being devised to help parents cope with future tuition costs The mo t well known was devised by an msurance man in Pittsburgh for that city s Duquesne University. where the tuition is now approximately $6,000 per year (Room and board is $3,000 extra.) The purpose of the plan is to counter the projected rise of cost and to bolster Duquesne's sagging enrollment. According to Patrick Fleming, a vice president of Fred S. James & Co., an insurance firm, Dusquesne predicts that by the year 2004, tuition for four years could run around $93,000. This is based on an annual rise of 7 percent in tuition rates at Duquesne over the past 10 years, said Fleming, who is based in the James office in Pittsburgh. Under the Duquesne plan, which is run in conjunction with Prudential-Bache Securities, the parents of a I-year-old child, for example, would pay Duquesne University $5,802 now. Duqesne would invest this in zero coupon treasury bonds, which would mature the day the youngster started college in 2004. By then, the bonds would be worth $20,379. There would be no tax load since Duquesne has a tax-exempt status. If the projection of the $93,000 tuition is realized, this means the parents would be getting a $93,000 education for an original See COLLEGE o Page C-14

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Photo illustration by Stan Honda