The tuition bill for a degree at OSU could be $194,000 for a baby born this year.
Paying for college is a bit like walking up an increasingly steeper and slicker slope.
At some point, lots of folks lose traction and simply can't make it.
Since 1997, tuition increases for in-state undergraduate students at Ohio's public universities averaged 80.4 percent, far outstripping the rate of inflation during that same period.
Tuition more than doubled at Ohio State University and the University of Akron during that eight-year span, while it increased by 68.2 percent at Youngstown State University.
"Most families will never be able to send their kids to college" if those trends continue, according to Jacqueline T. Williams, executive director of the Ohio Tuition Trust Authority, which administers the state's pre-paid tuition program and Ohio's CollegeAdvantage 529 Savings plan.
Tuition fund closes
Williams predicts that tuition will increase 10 percent annually at Ohio's public colleges for the foreseeable future, while the state's investments will return only 7 percent a year.
The gap between the projected tuition increases and investment returns led Williams to suspend new enrollments to Ohio's Guaranteed Savings Fund starting in 2004 because of fears the state eventually would have to step in and contribute money to meet the financial obligations of the fund.
Prepaid tuition plans like the Guaranteed Savings Fund are offered by a number of states as a way for individuals to cover future tuition costs by investing specified amounts into the funds. Like Ohio, some other states have suspended the programs because tuition growth is outpacing investment returns.
The upward spiral of tuition at public universities is being pushed by cuts in state funding as well as some of the same trends squeezing businesses: payroll, health-care benefits and changes in technology.
Health-care benefits at YSU, for example, now total about $10 million a year and have increased about 75 percent over the last five years, according to John Habat, the university's vice president for administration. Salary and benefits now consume about 70 percent of the school's general fund budget, he said.
Gary Carpenter, executive director of the National Institute of Certified College Planners, said Ohio's forecasts for tuition growth and investment returns are solid. And, he shares Williams' concerns about college affordability.
"If a household is earning $50,000 or less a year, it is almost impossible to pay for the cost of college without some kind of financial aid," Carpenter said.
In general, Carpenter said that families with one child and an adjusted gross income of $80,000 or more won't get aid at public universities. The income level would have to jump to $130,000 before aid would not be available from private universities, he said. While private colleges tend to be more generous with aid, those colleges generally cost more than public institutions.
At YSU, financial aid stretches far across the student population. About 46 percent of tuition is covered by some form of aid, according to Tom Maraffa, special assistant to the university president.
Nevertheless, the impact of aid to students is dwindling, especially Pell grants, which are targeted to students from low-income and working-class families. During the 1970s, the maximum Pell grant covered about 40 percent of the average cost of attending a private college. It now covers about 15 percent.
A frightening scenario
The twin projections of 10 percent annual tuition increases and 7 percent return on investments sketch a frightening scenario for parents and potential students. Using a "College Saving Calculator" available at CollegeBoard.com, its possible to develop a number of plans based on different economic assumptions.
Here are the projected tuition expenses and the amounts a family would have to save to cover those expenses at OSU and YSU for a child born in 2005:
UOSU: The cost of four years of tuition soars to about $194,000 in 18 years. Starting when their child is born, parents would have to invest $450 every month into a tax-free program that returns 7 percent a year to meet those tuition costs.
UYSU: The cost of four years of tuition in 18 years jumps to about $150,000. Parents who begin saving when the child is born would have to invest $350 a month to cover those costs.
Tuition covers only part of the college costs. Joseph Hurley, a financial planner who operates Savingforcollege.com, said tuition typically is less than half the cost of college expenses.
What can help bring the cost down? Superb grades in high school and a variety of extracurricular activities will open doors and provide financial aid to students who cannot otherwise afford college.
"Being a sought-after student helps in a lot of ways," Hurley said. "Colleges can go a long way to reduce costs for students they really want."