By Beverly Creamer
Advertiser Education Writer

Hawai'i isn't the only state facing budget shortfalls that mean a financial crisis for the public university system.

According to a new report by the National Center for Public Policy and Higher Education based in San Jose, Calif., every state is strapped for cash — and many are looking at raising tuition or have already done so at the state university to cover some of the shortfall.

Already 16 states have increased tuition and fees by more than 10 percent, with Massachusetts raising it the most — 24 percent. Missouri, Iowa and Texas have raised tuition at their state institutions by 20 percent and North Carolina by 19 percent.

Even community colleges are raising their fees, with two-year colleges in 10 states pushing tuition and fees up more than 10 percent.

In this lineup, Hawai'i's 3 percent increase each year over the next three years looks small. In fact Alaska, Hawai'i, Nevada and Oregon have all raised tuition by just 3 percent — some of the most modest increases in the country.

Those small increases in Hawai'i come on the heels of a 1995 increase of 50 percent and a 1996 increase of 25 percent, which served to bump the tuition revenue from $40 million to about $74 million this year.

But that still wasn't enough to really make a difference in the state or the university's fiscal picture.

"It's a significant dilemma for the institution," says Paul Costello, UH vice president for external affairs. "We have an obligation to the citizens to make sure we're accessible. It's a balance between affordability and access, and the economy."

The cost crisis doesn't end there. With some Mainland states billions of dollars in debt, the student financial aid picture is getting worse, too, with aid failing to keep pace with tuition increases, according to the center.

On top of that, projections by the U.S. Department of Education show that college enrollment this year could hit a high-water mark, with projected growth of 15 percent over the next decade.

There have been record-high enrollments for each of the past five years, according to Academic Management Services of Swansea, Mass., a firm offering financial advice to help families meet college expenses. And that will mean even less aid available.

While UH is still affordable — resident tuition is $1,608 a semester, with nonresident tuition $4,848 — private colleges are generally far higher.

But there is something that families can do to get over the "sticker shock" of any college these days, says Judith Grassi, a college financing expert with the Swansea firm.

And that means sitting down and talking turkey with your college-bound child.

"In the world of financial aid, the earlier you start understanding it, the faster you can choose your options," Grassi said.

One of the first things to look at, Grassi said, is what you can afford to add to your monthly cash flow. Start from there to find out which college you can afford and how much you need to borrow, she suggested.

Grassi recommends choosing federal loans and even an unsubsidized federal loan over private loan programs, putting a second mortgage on the house, using a home equity loan, a credit card or dipping into the retirement fund.

Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.