Soaring Costs Keep College Students Closer to Home : More opt for cheaper public universities in their own states. Some seek merit-based scholarships or work to make ends meet.

American students are becoming more careful shoppers when it comes to choosing--and paying for--their college educations.

After a decade of soaring tuition costs, counselors say that students and parents are approaching the entire college-selection process with a far sterner eye on finances. More students are considering state universities and are applying for merit-based scholarships.

“We are seeing a trend of staying in-state and going to state institutions--especially those families who can’t qualify for a full financial-aid package,” says Regina Manley, a coordinator of activities for college-bound students in the Chicago public schools.

Frank Burtnett, the executive director of the National Assn. of College Admission Counselors, agrees. “Spiraling college costs have reached a saturation point in the eyes of many people,” he says.

The financing problem intensified during the 1980s, when college administrators found themselves facing a shrinking market as a result of the birth dearth of the late 1960s and early 1970s--and a potentially sharp decline in revenues, to boot.

Instead of reducing tuition prices, many colleges sought to compete for more students by improving their services--hiring better faculty members, increasing the maintenance of grounds and buildings and expanding student support services, says Arthur Hauptman, a consultant.

As a result, the 1980s saw an explosion in tuition and other charges at the nation’s colleges--often several times the economy’s overall rate of inflation.

In 1980, for example, the average cost for undergraduate tuition, room and board at the nation’s public colleges was $2,422; for private schools, it was $6,570. By 1989, those figures had risen to $5,566 and $15,365, respectively.

At the most exclusive private universities in the nation, the price of tuition, room and board soared to more than $20,000.

Meanwhile, Congress--facing a tight budget at the federal level--has cut back sharply on federal grants, forcing many more students who traditionally have benefited from federal scholarships to rely on student loans instead.

The change has been significant. In 1982, for example, students at 42 of the nation’s leading black colleges had amassed about $27 million in student loans; by 1988, that number had almost doubled--to $52 million.

“People looking for financial assistance are no longer the needy poor,” Burtnett points out. These days, he contends, “needy as it relates to higher education can be middle-class people.”

The students themselves are very aware of financial pressures. Sonja Benkovich, 20, a student at the University of Virginia, put in more than 60 hours a week this summer at two different jobs, trying to raise $5,000 for next year.

In the past, Benkovich has received part-time jobs through her school’s financial aid office. But budget cuts affecting the institution have Benkovich wondering if she will be able to get a similar job during the upcoming academic year.

Ironically, perhaps, the rush toward public universities is coming as some of the most prestigious private schools are beginning to limit the size of their tuition increases, while state schools are upping their bills.

UC Berkeley will increase its tuition by almost 40% starting this autumn, but Stanford University will boost its charges by only 5%, its smallest such rise in more than a decade, university officials said.

Berkeley still had a much larger increase in applicants this year than Stanford had. Even with a steep tuition increase, its tuition for in-state residents is almost $10,000 less than the tuition at Stanford.

Washington politicians are pondering legislative solutions to the problem of rising tuition costs. The Bush Administration has proposed providing higher cash grants to low-income students and increasing the maximum amounts for federally subsidized loans.

A competing proposal sponsored by House Majority Leader Richard A. Gephardt (D-Mo.) and Rep. Pat Williams (D-Mont.) would eliminate the financial-need requirements for federally subsidized loans.

Meanwhile, Dallas Martin, president of the National Assn. of Student Aid Administrators, urges students not to be discouraged. Financial aid is still out there, Martin says.

The High Cost of Going to College: How It’s Soared Private University: +133.9% Public University: +105.3% Personal Per Capita Income of Students: +77.6% Source: The College Board