College costs outpace family income, inflation

WASHINGTON (CNN) -- Higher education is taking a bigger chunk out of the annual income of American families, according to a new report released by the National Center for Public Policy and Higher Education.

The report, "Losing Ground," finds that college has become less affordable for most Americans and that a college degree is virtually out of reach for some.

"It's certainly unaffordable for many of the lowest-income groups," said Pat Callan, president of the National Center. "For the poorest, the percentage of family income that it takes to finance a year of college has gone from 13 percent to almost 26 percent."

CNN NewsPass VIDEO CNN's Kathy Slobogin explains how skyrocketing college costs are making it tough on middle-class students. (May 2) Play video   EXTRA INFORMATION How much for college? Check out the average tuition  for regions around the nation.   Average Student Loan Debt 2000 graduates Private colleges: $17,613 Public colleges: $16,243 Source: Dept. of Education/Natl. Student Aid Study

From 1980 to 2000, the percentage of family income spent on college tuition increased for all families, except for those in the top 20 percent income bracket. Callan said that at a time when a college education has become the path to a middle-class life, that path is increasingly paved with debt. Sixty-four percent of college seniors graduate in debt, and the average amount of debt has nearly doubled in the last eight years.

"Everyone is borrowing and they're borrowing more money," said Callan, noting that even well-off families are more in debt. Ten years ago, according to the report, only 16 percent of the highest-income families borrowed for college. By 2000 that had grown to 45 percent.

While government aid has remained fairly constant for college students, tuition increases have outstripped the aid. Tuition has climbed at more than twice the inflation rate for the last decade. While a federal Pell grant covered 98 percent of the cost of tuition at a public four-year college in 1986, by 1998 it covered only 57 percent.

As states face deficits and look toward cuts in education budgets, Callan said, the situation will only get worse. "You're on a collision course here," he said. "Nothing in American society except for health care has gone up this way, and with health care we seem to have solved the problem by a lot of rationing. That is, some people don't have any at all, and that's exactly the situation we want to avoid."