Report: Rising College Costs Outstripping Student AidNovember 18, 2004 |
Report: Rising College Costs Outstripping Student Aid
By M.H. Miller
To pay for community college these days, the average student still has to cobble together funds — through Pell Grants and other government, institutional and possibly family support, while often holding down one or more jobs, according to new reports by the College Board on college costs and student aid.
In 2002-2003, as in other years, Pell Grants comprised by far the largest federal student-aid program for two-year students, accounting for about 35 percent of the total distribution of federal and campus-based aid to such students, compared with 6 percent for Stafford subsidized loans, 5 percent for Stafford unsubsidized loans and 9 percent for campus-based programs.
But according to the College Board, “The purchasing power of the Pell Grant … has declined considerably over the long-term. … In 2003-2004, the average Pell Grant covered 32 percent of the total charges at the average two-year public institution” and 23 percent of total charges at the average public four-year school. In 1980-1981, Pell covered 35 percent of total costs at four-year schools.
The College Board’s report, “Trends in College Pricing 2004,” released last month with two other reports making up its 2004 “Trends in Higher Education Series,” says average tuition and fees for full-time students at two-year schools increased by 9 percent during the 2004-2005 school year from the year before. That works out to about $170 per student.
Meanwhile, according to “Trends in Student Aid 2004,” the average Pell Grant rose by 1.2 percent in 2003-2004 from the previous year, to $2,466 per student — more than enough to cover tuition and fees at the average two-year college.
However, the College Board also calculated the average total cost of attending a two-year college full time — including tuition, fees, room and board, and after accounting for grants and education tax benefits. In 2003-2004, that cost was estimated at $5,500 per full-time student — up from $5,300 in 1993-1994.
According to Gov. Gaston Caperton, president of the College Board and former governor of West Virginia, “We need to increase need-based student-aid programs; we need to remove the barriers to college for low-income students.”
At the same time, the report showed that while all types of student aid are rapidly increasing, for the second year in a row federal loans outpaced grants: in 2003-2004, grant dollars increased by 6 percent, while federal loan volume went up 13 percent. This trend is a reversal of what happened between 1996 and 2001, when grants surpassed loans.
As a result, Dr. Sandy Baum, a senior policy analyst at the College Board and a professor of economics at Skidmore College, recommended that prospective college-aid consumers be educated about the benefits of taking out a student loan: “Loans yield benefits,” Baum said, as was illustrated in the board’s new report on the long-term benefits of higher education.
This report, “Education Pays: The Benefits of Higher Education for Individuals and Society,” puts the lifetime earnings of a four-year college graduate at about $1 million more than those of a high-school graduate, regardless of race, ethnic group and gender. When the costs of tuition and college fees are accounted for, a typical graduate of an average four-year public college who matriculated at 18 will begin to recoup those costs — as well as lost earnings during college years — by age 33. By age 45, the graduate will have already made a total of about $100,000 more than his or her peer who has only a high-school degree.
These benefits apply to students in two-year colleges as well — especially to those who obtain an associate’s degree. The College Board calculated that the average lifetime earnings of those with associate’s degrees are 23 percent higher than those with only high-school degrees, and about 6 percent higher than those with some college experience but no degree.
The annual median gross earnings for full-time workers ages 25 and older with associate’s degrees, at $37,600, are 22 percent — or about $7,000 — higher than for those with only a high-school diploma and about $2,000 higher than for those with some college but no degree. (It’s important to note that the earnings advantage associated here with education level involves other factors, too, including parents’ socioeconomic status.)
Society’s gains from an individual’s higher education — higher tax revenues, lower demands on social support programs, lower incarceration rates, higher levels of civic participation, a greater likelihood for the children of college graduates to go to college themselves — are well-known. In the board’s report on long-term benefits, these advantages are striking.
For instance, those with more education tend to be less affected by unemployment, across all races and ethnicities, although the report does show variations within each race and ethnic group. For example, in 2003 the 8 percent unemployment rate for Black workers with an associate’s degree or some college experience was 6 percent lower than it was for Black workers without a high-school degree.
A better-educated population also is healthier, the report found. For those with annual incomes of $35,000 to $54,999, 73 percent of individuals with a bachelor’s degree or higher report excellent or very good health, compared to those in the same income bracket with only a high-school degree, 62 percent of whom report excellent or very good health. (High-school graduates are likely to be older than college graduates in this income bracket.)
In addition to calling for greater equality in student access to college aid, the College Board urged greater equality in the distribution of information about student aid because, as Dr. Judith Shapiro, the president of Barnard College, pointed out, “Many students don’t have access to this information.”
© Copyright 2005 by DiverseEducation.com