What is the college inflation rate? Answer: The college inflation rate refers to the annual increase in college tuition and fees, similar to the way that the general inflation rate refers to the annual increase in the cost of living. The college inflation rate is usually measured separately for private and public colleges, though sometimes one average figure is given. For the 2003/2004 academic year, tuition and fees at four-year public colleges rose an average of 14.1 percent, while tuition and fees at four-year private colleges rose an average of 6.0 percent. (Source: The College Board's Trends in College Pricing Report 2003.) For parents trying to keep up with their child's college fund, the college inflation rate in any given year usually exceeds the general inflation rate for that year. Therefore, it is important to choose investments for college savings that keep pace with college inflation. For example, over the past 40 years or so, education costs have increased faster than the inflation rate--7.2 percent versus 4.4 percent. Unfortunately, this trend is expected to continue. Over the next decade, college costs are expected to increase on average about 7 or 8 percent per year. Keep in mind, however, that the rate of increase for any given college may be above or below this estimate. You can use the college inflation rate for a given year to help project college costs in the future. Be aware, however, that the more years your child has to go until college, the greater likelihood that your cost estimate will need to be revised at a later date.