DETROIT (AP) – For students and parents, it’s the first sliver of good news about college costs for several years: price increases slowed this year, growing at the lowest rate since 2001.

But the bad news is the 7.1-percent increase at public four-year universities remains well above the general inflation rate and drove the “list price” of tuition and fees at those schools to an average of $5,491, according to an annual survey released Tuesday by the College Board.

Even worse news for University students and parents is that Michigan’s public universities rank third when it comes to increases in tuition and fees for 2005-06, a national study shows.

The state’s 15 schools fall behind only Colorado and Kentucky.

Most families don’t pay the full list price, thanks to grants from the government and other sources, as well as tax breaks. Typical net costs: $11,600 at private four-year schools; $2,200 at public four-year schools, and just $400 at community colleges.

Yet students at four-year public colleges are paying an estimated $750 more than just two years ago. And while total financial aid is increasing, loans accounted for more of the growth than grants for the third consecutive year, the College Board said. Students have to pay back loans, but not grants.

James Boyle, president of the group College Parents of America, said schools and policy-makers aren’t working hard enough to hold down costs. “The beat goes on with increases in colleges costs, and parents are growing weary of the same old tune,” he said.

Average debt for undergraduate borrowers is now $15,500 – a figure experts consider manageable for most students, given that college graduates can expect to earn nearly $20,000 more per year than high school graduates. Still, increases in borrowing raise concerns that some students will be priced out of college, drop out or graduate but stay away from low-paying public service jobs so they can repay debts.

“We have deserving students who are being kept out of college or have difficulty completing degrees because of a lack of money,” said Gaston Caperton, president of the nonprofit College Board, which also owns the SAT college entrance exam.

Michigan’s universities saw a 12 percent increase, short of Colorado’s 17 percent and Kentucky’s 14 percent, the Detroit Free Press reported.

Michigan’s tuition and fees were about $7,100, coming in higher than the national average, as well as than Colorado’s $4,260 and Kentucky’s $4,880.

Across the nation, tuition and fees rose 7 percent to an average of $5,491 at four-year public institutions. The national increase is lower than the 10 percent rise in 2004-2005 and the 13 percent rise for 2003-2004. It remains above the rate of inflation.

Michigan’s 12 percent increase follow two years of state increases falling below the national average, said Dan Hurley, spokesman for the Presidents Council, State Universities of Michigan.

Hurley said the study found that the largest increases happen when state funding is cut.

“The state has cut its appropriation by $200 million over four years and enrollment has grown by 10,000 students,” he said.

Nationally, prices at two-year public colleges, which educate nearly half of American college students, rose 5.4 percent to $2,191. At four-year private, nonprofit colleges, costs rose 5.9 percent to $21,235.

The results come as Congress is negotiating a new version of the Higher Education Act, which would set federal financial aid policy for the coming years. A House version passed last month increases some grants, but critics say it would harm borrowers by cutting $9 billion from student loan programs.

College Board officials and university presidents devoted much of a news conference announcing the results to concerns over college access for poor students, who – even if they have high test scores – earn college degrees at significantly lower rates than rich students. They also criticized the proliferation of popular state programs that award college grants based on merit, not need.

“Basically, they are subsidizing the education of middle- and upper-income families,” said William Kirwan, chancellor of Maryland’s university system, citing as an example the Georgia Hope Scholarship program, which covers tuition and fees at a Georgia public university to any student with a B average.

While state spending on need-based aid has increased, merit-based aid has grown faster in recent years, College Board and university officials noted. Merit aid went from 10 percent of all state aid in 1993 to 26 percent by 2003, the most recent year for which figures are available.

Including charges for room and board, published costs at public four-year schools rose 6.6 percent to an average of $11,376.

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