http://www.chron.com/cs/CDA/ssistory.mpl/front/3402884

Tuition and fees at the nation's public universities climbed an average of 7 percent this year, continuing an upward trend but at a slower pace than the past five years, the College Board reported Tuesday.

Students, meanwhile, are becoming increasingly dependent on loans instead of grants, according to the nonprofit group's annual survey of about 3,000 colleges and universities.

Even as the government and other sources contributed more money toward student aid, most of the new dollars came in the form of loans rather than grants for the third consecutive year.

The declining role of grants, which students do not need to pay back, "concerns all of us," said Gaston Caperton, president of the nonprofit College Board, which also owns the SAT college-entrance exam. "Affordability is essential to opportunity."

The average cost of tuition and fees at public four-year universities reached $5,491 this year, up $365 from a year ago. With room and board, the overall cost rises to $12,127 annually.

Although the 7 percent boost outpaced the general inflation rate, it was the smallest increase since 2000. Two years ago, the sticker price at public universities soared 13 percent, the highest rate in three decades.

In Texas, tuition and fees increased by 6 percent this year, climbing to $4,830 annually for four-year universities and $1,510 annually for two-year community colleges. State lawmakers allowed public universities to set their own tuition levels two years ago, which led to record increases.

The University of Texas at Austin posted the nation's steepest one-year increase in tuition and fees at 37 percent a year ago, according to College Board figures.

"This move by the government to not fund higher education is scary," said Omar Ochoa, student body president at UT-Austin. "We have to raise the money somehow. Unfortunately, the easy way is through students."

Although the College Board's report did not provide reasons for the increases in tuition and fees, officials pointed to declines or slow growth in the level of state spending on higher education.

Charles Miller, a Houston investment manager who leads the U.S. Secretary of Education's commission on higher education, said universities and politicians could do more to reduce costs.

"The issue is broader than how much money the states are putting into higher education," said Miller, who is a strong proponent of accountability measures. "They may need to do things better inside the academy."

Students received about $129 billion in financial aid last year, with the largest portion — about 49 percent — coming in the form of loans. The average debt for borrowers upon earning a bachelor's degree is $15,500, and College Board officials and university leaders expressed concern about the burden on students, especially those from low-income backgrounds.

Six of 10 full-time undergraduates are relying on grants to help cover their costs, so the possibility of greater debt could lead them to drop out, education experts warned.

Officials also questioned the use of grants based on merit instead of need.

"We've reached an indefensible position in our country where a high-ability, low-income student is no more likely than a low-ability, high-income student to go to college," said William Kirwan, chancellor of the University System of Maryland. "It's a national tragedy."