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    Introduction

    Chapter 1: Five National Trends

    Chapter 2: State Policies for Affordable Higher Education

    Chapter 3: Questions and Answers about Losing Ground

    Chapter 4: 2002 Update for the States: "A Dire Situation"

    Chapter 5: Public Concerns about the Price of College

    Chapter 6: Taking Care of the Middle Class

    Chapter 7: Profiles of American College Students

    Appendix: State Trends

    Acknowledgments

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    BACK

  • CHAPTER 3: QUESTIONS AND ANSWERS ABOUT LOSING GROUND

    How is college affordability determined?

    Losing Ground assesses the affordability of college from the perspective of families and students. College affordability is the proportion of annual family income that is required to pay for a year of college.

    Student enrollment increases every year. How can there be a problem with college affordability?

    For most Americans, higher education-that is, education and training beyond high school-has become virtually mandatory, rather than optional, for a middle-class life. Students and families must do what they find necessary to pay for college.

    The ways Americans pay for college has changed as prices and costs have risen faster than inflation and family income. Students are accumulating significant debt and are borrowing in record amounts. Many students work more hours than ever before to pay college expenses, spending less time on their studies. Some students select lower-priced institutions rather than those that better suit their intellectual interests and educational goals. And some students decide to attend college part-time rather than enroll full-time, often substantially prolonging their time in college.

    Most critically, however, even though more students are attending college, gaps in college attendance between affluent and low-income Americans-even between those most qualified-have not been significantly narrowed over the last two decades. One reason is that the price of college discourages many low-income students from enrolling, regardless of their talent or eligibility. It may also discourage some students from preparing for college academically.

    Does Losing Ground deal only with public higher education?

    This status report focuses primarily on public two- and four-year colleges and universities. As this report documents, economic recessions present special challenges for public higher education because of their great reliance upon state funding. However, Losing Ground does provide information on private colleges and universities wherever possible.

    Why is college affordability a problem if financial aid is available?

    Financial aid has increased over the past 20 years. However, it has not kept pace with rising college prices. Furthermore, financial aid alone is unlikely to solve the affordability problem. Other strategies also are required (see "State Policies for Affordable Higher Education," on page 10).

    If state governments have increased their investment in higher education over the past 20 years, why do state dollars represent a smaller share of college and university budgets?

    Losing Ground shows that colleges and universities receive money from many sources (see figure 8 on page 9). Over the past two decades, state governments-in the aggregate-have increased their financial support of higher education. However, their contribution represents a smaller portion of college and university budgets. During this time, the cost of providing higher education has also increased, leading to a greater reliance on income from sources other than state funding-primarily tuition revenues.

    What sources of information were used in Losing Ground?

    Losing Ground uses the most recent data available for both the national and state analyses. The sources used in Losing Ground are drawn entirely from publicly available and comparable data sources (see pages 30 and 31 for further information).

    Is it true that public opinion research shows that the public knows very little about college costs?

    The surveys show that the general public is not highly knowledgeable about the complex financing of colleges and universities. Respondents to public opinion surveys often get the specifics wrong, and they often overstate tuition levels or fail to make distinctions between tuition and other college costs, such as books and room and board. However, public concerns about affordability are well founded-higher education requires an ever-increasing portion of the income of most American families.

    By emphasizing that the increasing cost of providing higher education is a major factor in tuition increases, does Losing Ground advocate federal regulation of costs or prices of higher education?

    The states are primarily responsible for policies that deal with the cost, the prices, and the affordability of public higher education. The federal government is not necessarily the most appropriate or effective level of government to address these issues. In 1998, for example, Congress created a commission on college costs that was controlled by college officials, consultants, and lobbyists. The commission's call for voluntary cost and price restraint on the part of colleges and universities has had little or no demonstrable effect to date.

    Why another national report on the affordability of higher education?

    Losing Ground assesses affordability from the perspective of families, based upon the median family income in each state. It shows that affordability has been eroding for two decades for most Americans. During this time state support of higher education has increased while higher education affordability has declined, suggesting that rising costs of providing higher education, rather than decline in state support, underlies the decline of affordability. Losing Ground also documents the tendency of states and colleges to raise tuition most steeply during recessions. This practice of raising tuition during hard times has been characterized as "pricing with impunity."