COLLEGE STUDENT FUNDING DOWN: one more screw the people
Atlantic Monthly, Jan/Feb 2004
OUT IN THE NEW REPUBLIC’S ARTICLE ON THE CONSERVATIVE’S ECONOMIC POLICY, IT IS BUSINESS WHICH FUNDS THE ELECTIONS AND IT IS BUSINESS WHICH
GET SPECIAL TREATMENT. CUTTING PROGRAMS WHICH BENEFIT THE PEOLE ENTAILS MORE
DOLLARS TO SPEND ON PROGRAMS THAT BENEFIT BUSINESS SUCH AS THE MILITARY AND OIL COMPANIES.--JK
The Tuition Crunch
For low-income students college is increasingly out of reach
by Jennifer Washburn | Jan 01 '04
college degree has become all but a necessity for getting ahead in the information age. Since the 1980s the average real income
of workers with only a high school diploma has fallen, while salaries among those with at least a college degree have risen:
they now earn 75 percent more than high school graduates. At the national level, having a highly educated work force is critical
in order to sustain our technological edge in the global economy.
higher-education system ranks among its greatest achievements. But in the past two decades our commitment to equal opportunity
in post-secondary education has deteriorated markedly. In 1979 students from the richest
25 percent of American homes were four times as likely to attend college as those from the poorest 25 percent; by 1994 they
were ten times as likely.
Part of the problem is the skyrocketing cost of college. Since 1980 tuition and related charges have increased at more than twice the rate of inflation, rising by nearly 40
percent in real terms in the past decade alone. Public attention has focused largely on the $35,000-plus annual cost of elite schools like
Harvard and Brown. The bigger problem rests with the public colleges and universities that serve 80 percent of the nation's
students. In 2003 the University of Arizona's average annual tuition rose by 39 percent, to $3,604, and Iowa State's rose by
22 percent, to $5,028. For many low-income families increases like these are difficult to absorb. Indeed, the cost for such families of
sending a child to a four-year public institution shot from 13 percent of family income in 1980 to 25 percent in 2000 (for
middle- and high-income families the percentage barely increased).
Republicans, led by Representative Howard McKeon, of California, contend that universities are largely to blame for these
tuition hikes. However, most experts agree that fluctuations in state spending are the principal cause of tuition increases
at public institutions, which depend heavily on appropriations to subsidize their operations. As Arthur Hauptman, an expert
on college financing, explains, in each of the past three economic recessions—in
the mid-1970s, the early 1980s, and the early 1990s—state higher-education spending per student declined, forcing students and their
families to shoulder more of the cost in the form of double-digit percentage hikes in tuition. Increases during the recent
recession reflect the same pattern.
The tuition spiral is not
the only impediment to equality of opportunity. More significant perhaps is the nation's backsliding on need-based financial
aid. In 1975-1976 the maximum federal Pell Grant award (for low-income students) covered 84 percent
of the cost of attendance at a public four-year college; by 1999-2000 it covered only 39 percent. This is part of a broader shift to a system dominated
by loans, which has left a generation of students struggling to finance heavy debt.
Hardest hit are low-income students, whose numbers are expected to increase dramatically over the next decade. From
1989 to 1999 the average cumulative debt of the poorest 25 percent of public-college seniors grew from $7,629 to $12,888 (in
constant 1999 dollars). Studies find that when financial-aid packages inadequately cover expenses,
students work long hours, attend school part time, and opt for two-year as opposed to four-year programs—all of which
reduce their chances of acquiring a bachelor's degree.
Federal efforts during the past
decade or so to address rising tuition have done little to help low-income families. Both the Clinton and the George W. Bush
Administrations promoted tax breaks and saving incentives encouraging families to set aside money for college. These programs
largely benefited middle- and upper-income families, who have both taxable income and resources to save. With the Higher Education
Act up for renewal this year, Congress should focus on aiding those students unlikely to complete—or attend—college
without greater financial support, and should encourage universities to do the same. To begin with, it should restore the
purchasing power of Pell Grants by raising the maximum award from the current $4,050 to $8,000. Many will argue that the cost—roughly
$15 billion in additional annual spending—is unrealistic. Historically, however, our nation's investments in expanding
access to higher education have paid off many times over. And the money required, according to a new Century Foundation publication,
is roughly equivalent to the annual revenue lost to the Treasury from tax and savings benefits that currently help those higher
on the income ladder. To relieve the extraordinary debt burden that many students face, Congress should also put the college-loan
system under federal administration, and let every student consolidate loans and pay them off on an income-contingent basis,
as one federal loan program already allows.
Broadening access to higher education has never been the answer to inequality, but it is the way to ensure
that every young person has a chance to move upward in society. Either we can continue to ignore the persistent disparities
in post-secondary training and rely increasingly on foreign students to fill our graduate-level science and engineering programs,
or we can renew our commitment to educating the young people who are already here.