College is in session and expenses are mounting. Costs concern not only parents who must adjust their finances to meet them but institutions as well.
For the current school year, students at four-year public colleges are paying an average of $2,527 for tuition and fees, an 8 percent increase, or $193, over last year. Room and board averages $3,680, a 5 percent increase of $180.
Meanwhile, students at private colleges are paying an average of $11,025 this year, a 6 percent boost of $576. Room and board averages $4,793, a 5 percent increase of $214.
"There's pressure on private institutions to bring costs down, but public institutions face an even greater concern," said James Belvin Jr., director of financial aid for Duke University in Durham, N.C., a private school where 40 percent of the students receive aid.
Increasing burdens on state governments, Belvin believes, will mean lower and lower levels of subsidization at public institutions.
"The rate of increase in costs was more severe in the early 1980s, averaging 16 and 20 percent, but institutions have made tremendous efforts to contain costs," noted Katherine Brouder, an executive with the financial aid division of the nonprofit College Board of schools, colleges and agencies.
Most aid is awarded on the basis of need, Brouder emphasized, though "you must keep in mind that need can vary by institution because costs vary dramatically."
Do your homework on what's available.
Grants and scholarships don't have to be repaid. Fees on most government loans have been reduced for the 1994-1995 school year. Among them, the federal Stafford program offers low variable-rate loans, either subsidized or unsubsidized by the government. Some other significant programs are the Pell Grant, Supplemental Loans for Students and Perkins loan programs. The federal Work-Study Program can provide job opportunities.
"Contact the school about financial aid the senior year in high school and expect applications to be made available shortly after January of that year," explained Brian Kerrigan, deputy director with the U.S. Department of Education.
The "College Cost and Financial Aid Handbook 1994" is available for $16 in bookstores or by mail from College Board Publications, P.O. Box 886, New York, N.Y. 10101-0886. The U.S. Department of Education booklets "The Student Guide" and "On Your Own" are available if you phone 800-4-FED-AID.
"The most costly mistakes families make when seeking aid are missing deadlines, providing incomplete information and assuming the institution knows more about you than is the case," warned Phyllis Bolt Bannister, director of financial aid at the University of Arizona in Tucson.
"From an investment standpoint, the more that parents save when children are toddlers, the less anxiety they'll experience as their children reach junior and senior high school."
Regular saving for college is crucial.
"The most popular savings plans are custodial accounts under the Uniform Gift to Minors Act or Uniform Transfer to Minors Act, which permit parents to shift some assets to the child at the child's lower tax rate," explained Kathryn Hopkins, executive vice president with Fidelity Investments in Boston.
"Upon the age of majority, between 18 and 21 years old, all assets in such accounts become the property of the child,
regardless of whether or not he decides to use the money for college."
Fidelity suggests you assess financial needs based on an average 7 percent annual increase in education costs; that you don't rely exclusively on financial assistance, especially since the Clinton administration plans an overhaul of the system; that you don't strain finances by borrowing too much; that you set up a systematic savings program; and that you choose investments according to your child's age and your tolerance for risk.
"I wouldn't put all the money in a Uniform Gift to Minors account, since the child will wind up with control of those dollars," said Isabel Francis Smith, a certified financial planner with Integrated Financial Strategies Ltd. in Bingham Farms, Mich.