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National CrossTalk Fall 1999
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4 of 6 Stories

Harsh Realities
A national report on the affordability of higher education

By William Trombley
Senior Editor

As a college degree becomes an almost obligatory ticket to a middle class life, the cost of postsecondary education has become less affordable for all but the richest Americans, a new report from The National Center for Public Policy and Higher Education concludes.

The report, titled "Losing Ground," looks at college costs from "the perspective of American families"-that is, how much of a family's income goes to pay for tuition and mandatory fees at a public college or university.

It finds that the share of family income required to pay for college has increased for all families except for those in the wealthiest 20 percent. The increase is highest among the lowest-income families.

In 1980, tuition at public colleges and universities accounted for 13 percent of the annual earnings of low-income families (defined as a family of four with an annual income of $24,000 or less). By the year 2000, that percentage had risen to 25 percent.

At two-year public colleges, tuition increased from six percent to 12 percent of family income during the same time period, according to the report.

These trends are likely to be accelerated by the round of state budget cuts and resulting tuition increases that have followed the national economic recession and the September 11 terrorist attacks, the report states.

While most state colleges and universities are raising next year's tuition less than ten percent, some have gone well beyond that figure.

Since higher education is one of the few large discretionary items in most state budgets, it tends to be treated favorably during boom times like the middle and late 1990s but cut mercilessly when state economies turn down.

"This cycle-a pattern of eroding affordability-raises prices when students and families can least afford it and is a windfall to those fortunate enough to attend college when the economy is strong," the report states.

Several other national trends are identified as contributors to the rising cost of higher education and to the increased burden this places on individual families:

  • State and federal grants for student financial aid have increased significantly in recent years but the increases have not kept pace with tuition. For instance, Pell Grants, the federal government's most important program for needy students, covered 98 percent of tuition in 1986 but only 57 percent 13 years later. Most state financial aid programs followed the same downward path, especially after many states began to award increasing amounts of assistance on the basis of "merit," variously defined, not financial need.
  • Colleges and universities have increased their own contributions to student financial aid but, again, this money often is allocated according to merit, not need. "There is no evidence that most of this aid targets low-income students in either the public or private sector," the report states.
  • Students are working longer hours and taking out larger loans, to make up the difference between college costs and what families can afford to pay. From 1989 to 1999, "average cumulative debt by seniors at public colleges and universities increased substantially for all income groups," the report finds. "For those in the lowest income quartile, such debt grew from $7,829 to $12,888 (in constant dollars)." This finding is accompanied by six short profiles of students at two-year and four-year schools around the country who are working longer hours, taking extra jobs, applying for every possible grant and scholarship and borrowing thousands of dollars in order to pay for their educations.
  • Although state appropriations for higher education increased by 13 percent (in constant dollars per student) between 1980 and 1998, the report says, this was not enough to keep pace with tuition, which increased 107 percent, from $1,696 to $3,512 (in constant dollars) during the same time period.

Linda Gonzalez, a student at Massachusetts Bay Community College, and Demetrio Johnson, a senior at the University of Illinois, Chicago, are profiled in the affordability report.  

All of these trends have combined to make higher education less affordable for all but the richest Americans. In a section titled "Taking Care of the Middle Class," the report finds that the impact on middle class families has been softened by a series of federal and state tax credits, savings plans and other programs benefiting students who would not be eligible for need-based financial aid.

But similar efforts have not been made to help low-income families, with the result that "the gap in college attendance rates between high and low-income Americans has widened, even among those who are prepared academically for college," according to the report. "Just as college opportunity has become indispensable, it also has become less affordable."

The National Center for Public Policy and Higher Education (which also publishes National CrossTalk) is an independent, non-profit, nonpartisan organization which conducts policy research and fosters public awareness and discussion of public policy issues affecting education and training beyond high school. The National Center's studies and reports, including "Losing Ground," are intended to stimulate public policies that will improve the effectiveness and accessibility of higher education.

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