It has been difficult to pick up a newspaper the past week without seeing a story on the rising cost of college tuition; these articles from the LA Times and the Washington Post are representative.

College costs are in the news because of the College Board’s “Trends in College Pricing 2009” report, which  I would encourage you to read  for yourself. The general thrust captured by these newspapers is that published tuition and fees are up 6.5% for public universities and 4.4% for private ones from the previous school year.

How can this be? Have the colleges and universities not heard that our economy has been in a recession for at least the last year?

Indeed, our institutes of higher learning are acutely aware of the recession. In fact, the recession helps explain the increase in the cost of education.

Public universities receive state appropriations as part of their funding; those appropriations are taken from state tax dollars. The size of that funding tends to increase in a good economy, and decrease in a bad one. Even in lean years, though, universities can’t cut back spending too much, or else they risk harming those characteristics (research, faculty, etc) that contribute to their reputation. Thus, when student enrollment rises and state appropriations fall, public universities are forced to raise tuition and cut costs where possible.

Both public and private universities also depend on the generosity of their private donors, who fund their endowment. This money is especially important to more expensive private universities, who use endowments to fund expansion and keep college accessible for those students they choose to accept. Many endowments took huge hits during the financial crisis, so even very wealthy schools have cut back on spending. Harvard alone lost more than $10 billion, a hefty sum for any university.

Fortunately, it’s not all bad news. In the same way working professionals are concerned with their net pay –the amount of cash they’re taking home after taxes – potential students should take note of the net cost of college. Lost in the headlines about increasing tuition costs was this nugget: the price students pay for college–after financial aid is factored in–has fallen in the last five years, by about $1,100 at private universities and $400 at public ones. So while the sticker price on that great liberal arts college might be an unpalatable $26,300, the College Board estimates that financial aid and grants will reduce your net costs to a more reasonable $11,900.

Still – tuition plus the cost of living adds up to a hefty bill upon graduation. If you’re one of many Americans who paid for part or all of their education, then you’ve likely covered part of that bill with student loans. These loans are often referred to as “good” debt; you’re using them to finance an education, and interest rates and repayment terms (especially on federal loans) tend to be favorable.

But with median debt upon graduation nearing $20,000, this does mean you should approach college cautiously. Use the Bureau of Labor Statistic’s college outlook report to research the salary in the career you would like to pursue. Salary certainly doesn’t determine your job satisfaction, but it does give you an indication of your ability to pay back student loan debt.

The benefits of a college degree are undeniable – in general, college graduates have lower rates of unemployment, and earn more money over their career. Still, a college education is an investment like any other. Before making any expensive and long-term commitment, make sure you know what you’re going to do with it.