College tuition in America rose an average of 5 percent last year, the College Board's Annual Survey of Colleges reported yesterday.

Financial aid rose at a comparable rate, the 1997-98 survey showed. Two thirds of this increase, however, has been in the form of loans rather than grants.

Harvard's tuition increase this year was 4.1 percent. The total financial aid in grants awarded at Harvard, however, increased by 7 percent from last year.

Yesterday, few students seemed surprised tuition hikes, both at Harvard and around the nation.

"It doesn't make that much of a difference," said Rebecca S. Gaines '99. "It's been like that every year."

Some gave the school credit for holding the hike to a minimum.

"It's to the University's credit that the increase has been lower than the national average," Nicholas A. Nash Jr. '00 said, "but the less, the better."

Over a ten-year period and after adjusting for inflation, there was a 28 percent increase in private four-year college tuition, although the average median family income mostly remained constant, the College Board reported.

However, College Board President Donald M. Stewart said that the inflation should not alarm American families.

"The United States continues to extend higher-education opportunities to a larger percent of the population than any country in the world," he said in a statement.

In addition, the more than $55 billion in total aid available in 1996-97 is 70 percent higher than a decade ago, Lawrence Gladieux, executive director for policy analysis at the College Board, said in the statement.

But loans now comprise 60 percent of all aid, as opposed to just 40 percent in 1980, and one-third of the loans are now unsubsidized, adding in-school interest charges to borrowers' total debt-and increasing the burden graduates carry when they leave college.

The purchasing power of federal grants is declining as well. For instance, the maximum federal Pell Grant, available to the neediest students, formerly covered up to one-third of the cost of fees at a private, four-year institution. Today, it covers only one-seventh of the tuition.

"Since the mid-'70s, the Pell Grant has lost ground both to inflation and to the rising cost of college," Stewart said.

But Stewart added that a high price tag does not diminish the importance of a college education.

"Students and parents should consider the value of a college degree as a lifetime investment, not merely annual expenses incurred over a four or five-year period," he said.