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College price increases slowed this year but they again topped inflation, and financial aid isn't keeping pace, a new report says.

Tuition and fees at public four-year public colleges rose $344, or 6.3 percent, to an average of $5,836 for the 2006-07 academic year, according to the College Board's annual "Trends in College Pricing" report, released Tuesday.

Accounting for inflation, prices rose just 2.4 percent — the lowest rise in six years, and the third straight time the gap between prices and overall inflation has narrowed.

Tuition and fees at private four-year colleges rose 5.9 percent overall, to $22,218.

The news that price hikes are getting smaller is tempered by the fact that this decade has been a period of an extraordinary increases in college costs. Published prices are up 35 percent in five years — the largest increase of any five-year period in the 30 years covered the report.

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That's coupled with the reality that grant aid — from the government, colleges and private sources — isn't covering the price hikes. For the 62 percent of full-time undergraduates who receive grant aid, the average net cost of a four-year public school rose 8 percent to $2,700, the report said.

"There is some good news: There's a lot of aid out there that is helping students," said Sandy Baum, senior policy analyst at the College Board. "But there are real notes of caution about ... the failure of grant aid to keep up with the rise in prices."

The best news came for people at the nation's public two-year colleges, which educate nearly half of American college students. There, tuition and fees rose just 4.1 percent to $2,272. The increase was limited by California, which is home to more than a fifth of the nation's two-year public college students and lowered tuition and fees 12 percent this year. Elsewhere, prices rose 5.1 percent.

Accounting for financial aid, however, the average net cost nationally for two-year public college students declined, and is less than $100.

"We're seeing more students who would generally have gone to the state university coming to the community college because of the issue of pricing," said Wilfredo Nieves, president of Middlesex Community College in Connecticut, who spoke at the announcement.

At four-year public schools, adding room and board to tuition and fees makes the college prices average $12,796. At private colleges, the price is $30,367.

The cost increases at state schools are baffling to many students and parents, given the relative health of the economy and state finances.

After several years of sharp cuts, state spending on higher education has been rising again nationally. The problem is that more people are enrolling, so there is less and less to spend per student.

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