STUDENT: The Coquille Indian tribe is a tribe that has occupied land in southwestern Oregon for the last 3,500 years.
LEE HOCHBERG: With only two hours to practice before delivering her senior project at Oregon's Lewis & Clark College, Fauna Doyle obviously was nervous.
FAUNA DOYLE: So what is it that makes us a culture today? And I found some really, really interesting things.
LEE HOCHBERG: The magna cum laude graduate wasn't just anxious about her speech, though. Despite working two jobs throughout school, she knew she'd soon face a post- graduation debt of $10,000; loans she took out to pay tuition.
FAUNA DOYLE: Ten thousand dollars- it sounds like a lot to me. I've never made that much money. That's a lot of debt at 22 to be looking at, especially when you're looking at a job market that may or may not hire you, or may hire you to Blockbuster, or Starbucks.
LEE HOCHBERG: Half of the school's students graduate in debt, averaging $16,000 per student from tuition and room and board.
FAUAN DOYLE: And I can't just take the nonprofit job that I want to take, and enjoy making $10,000 a year because, you know, if I live at home, I still can't do that because I'm still... I have a loan payment every month.
SPOKESMAN: It's a fine line from toe to walk.
LEE HOCHBERG: Tuition at Lewis & Clark is $22,000 a year. Annual costs, including room and board, can reach $30,000 at the private college. Ten years ago, tuition was $14,000; the 60 percent increase is twice the national inflation rate.And the increase is even greater at other schools.
The alumni Web site for California's Art Center College crackles over that school's tuition hike to $11,000; up 80 percent in a decade. And the University of Washington, a public school, will raise tuition 16 percent next year alone to $4,200 for state residents. A foreboding trend, says Pat Callan of the Center for Public Policy and Higher Education.
PAT CALLAN, Center for Public Policy and Higher Education: At the very time when for individuals, college is more essential now than it's ever been before, we've been making it more difficult for students and families to afford it, and then they've had to rely heavily on borrowing.
LEE HOCHBERG: The center's just- completed study of the nation's 3,500 colleges found tuition is rising faster than inflation. It's rising faster than family income. Even at public colleges, where most American students go, a year's tuition now consumes 12 percent of a typical family's income, and 25 percent for low income families.
It's all a shock to Andy High, student body president at Western Oregon University. From a blue-collar background, he thought he'd avoid money problems by attending a state school, which is subsidized by the state legislature. But it still cost him more than $4,000 a year.
ANDY HIGH, Graduating Senior: You go to public school because you think it's going to be cheaper. But then you... in the long run, I'm walking out with $13,000 debt, you know, and have that burden over my head.
PAT CALLAN: The most disturbing thing is that there's not much signs that these trends are abating; that is, if we experience the same thing in the next 20 years that we did in the last 20 years, I think we will have created insurmountable barriers.
LEE HOCHBERG: So why are college costs rising so quickly? Lewis & Clark President Michael Mooney says a third of tuition at his school pays for faculty. Full professors earn an average $73,000 a year. That's up from $45,000 a decade ago, so as not to lose them to private industry. It's a 60 percent boost. The cost of health benefits is up 120 percent, both increases far more than inflation.
MICHAEL MOONEY, President, Lewis & Clark College: Inflation is a basket of goods and services that contains food, contains rent, transportation. Most of our expenses are related to people, faculty who are highly skilled who have eight to twelve years of postgraduate education. The salaries and the benefits we pay for the kinds of faculty we want costs us more than they ever did.
LEE HOCHBERG: Almost 20 percent of Lewis & Clark's tuition goes to build and maintain school buildings, 6 percent supports the school's popular overseas study program, and some tuition funds apparent luxuries that the school says are essential to attracting students.
MICHAEL MOONEY: They'll say, "Are your dormitories wired for technology, for the Internet? Do you offer courses in Japanese? Can I go and study in Africa? Do you have a lacrosse team?" Every one of these entails added costs to us, what the market is expecting of us.
LEE HOCHBERG: If you don't do those things, can you compete?
MICHAEL MOONEY: We could not compete within the same arena in which we do. I think that's true.
LEE HOCHBERG: But critics say colleges have taken competition to an unreasonable level, needlessly inflating tuition. They point, for example, to expensive bidding wars between schools to lure top professors.
SPOKESMAN: Now, let's take a look here. Okay, notice the orientation of the feet here. They're all parallel.
LEE HOCHBERG: At research- oriented universities, recruiting professors can require million-dollar expenditures on new laboratories. Lewis & Clark says it's a small player in that game, but it did front $50,000 for a lab to lure biologist Kellar Autumn from Berkeley. He's studying the adhesives that enable geckos to climb.
KELLAR AUTUMN, Biology Professor: See, it's losing it. Try another 90.
LEE HOCHBERG: Autumn says he might not have come to Lewis & Clark without the lab.
KELLAR AUTUMN: That was one of the things that made Lewis & Clark so attractive in comparison to other places was the... the facilities that they were ready to make available. And it's been a continuing commitment as well.
LEE HOCHBERG: The school says researchers like Autumn give some students special learning opportunities and help the school market itself.
MICHAEL MOONEY: We will use faculty, their profiles, their achievements in some of our marketing materials. We are proud to say how well our faculty are trained, how active they are in research and how much they've accomplished.
LEE HOCHBERG: But critics ask, "At what price marketing?"
PAT CALLAN: It raises the cost to all the parties that are paying the bill. And I think what most students and families that sacrifice to go to higher education care about the most is the educational experience that the student often... the student actually has, not whether somebody off in some distant lab has... has prestige.
LEE HOCHBERG: Critics also chide colleges for spending an increasing amount of tuition money on merit aid, financial help to scholars who really don't need it.
PAT CALLAN: Universities tend to... increasingly to spend money on financial aid in ways that meet their own goals, which are more prestige, a freshman class that looks better... marginally better on the U.S. News ratings because its S.A.T. scores or GPA's are a little higher, but don't really help us much as a country, because the same people are going to college, it's just that my college and your college are in a bidding war to get them.
MICHAEL MOONEY: So it's not as though we're giving monies away foolishly.
LEE HOCHBERG: Lewis & Clark says it offers only ten full and several partial merit scholarships each year, but those scholarships make the school a more exciting place, and they do add to the university's prestige. The school is listed favorably in the U.S. News ranking.
MICHAEL MOONEY: It creates a reputation for higher academic aspirations and achievements. It allows you to recruit and retain more capable faculty who are more challenged by an environment that has some students of higher quality than otherwise would be the case.
LEE HOCHBERG: The line between what's prestige and what's education is a fine one.
SPOKESMAN: Nobel Peace Laureate and former President of Poland, His Excellency, Lech Walesa.
LEE HOCHBERG: Lewis & Clark last year paid to have solidarity founder Lech Walesa speak at graduation. The appearance cost the school a guest fee and travel costs it won't disclose. Students like Fauna Doyle question whether that money was well-spent.
FAUAN DOYLE: I don't really care whether five years from now someone says, "oh, the former President of Poland spoke at your graduation." The money could have gone someplace else and maybe it could go to having student fees just a little bit less, or tuition just that much less.
MICHAEL MOONEY: If we don't do those things, we will not be able to attract the same quality professors that we now do or wish to in the future. We won't attract the same quality of students. That's... that's pretty clear to me. We would become a different kind of institution.
LEE HOCHBERG: Critics say as long as parents are willing to spend, schools have no motivation to cap costs. But with debt piling up, the debate is going to get hotter.
PAT CALLAN: The conventional wisdom is that in much of higher education is that... is to equate high cost with high quality. But there probably are limits to what families can afford. If you end up with a system that has all these good things that a smaller and smaller portion of Americans can afford, you've probably hurt the country more than you've helped it.
MICHAEL MOONEY: Our alumni, even though they may be carrying a debt, are contributing to the institution in increasing percentages. Now we must be doing something right. And what we are doing right is we are true to this notion that education, at least at this institution, is a great investment.
FAUNA DOYLE: We can trace ourselves back to the original people that signed that treaty.
LEE HOCHBERG: Fauna Doyle graduated this month. She says she's decided to work for a few months, anyway, at Americorps, the citizen service program. Under terms of that plan, at least, interest on her student loans will be deferred.