Majoring in debt - financing higher education

Progressive, The, Jan, 2004 by Adolph L. Reed, Jr.

Higher education is a basic social good. As such, it should be available to all, without cost, who meet admission standards. The federal government, as the guarantor of social rights, should bear primary responsibility for providing free college for all.

This proposal isn't prohibitively costly; the total bill for all students currently enrolled in public institutions is under $27 billion, less than one-third of what George W. Bush is spending on Iraq this year. Closing recently opened corporate tax loopholes would also more than meet the program's cost, even if enrollments doubled as a result of eliminating tuition as a constraint.

Moreover, this program isn't pie in the sky. It has a clear precedent in living memory. The GI Bill paid full tuition and fees, as well as a living-wage stipend, for nearly eight million returning World War II veterans. We've done it before, we can do it again, and this time for everyone.

The crisis in public education is intensifying. As almost every state reels from the effects of recession and tax cuts, legislatures slash funding for higher education, the largest discretionary item in most state budgets. Colleges respond with hefty tuition increases, reduced financial assistance, and new fees. These measures put an extra burden on the average family, whose net worth has declined over the last two years for the first time in half a century.

Increased tuition, coupled with dwindling financial aid, is a significant problem for millions of families. According to the College Board, over the last decade, average tuition and fees at public four-year colleges increased 40 percent, and last year alone it increased by 14 percent. Community colleges increased tuition by a similar percentage last year.

Financial aid is not picking up the slack. Three decades ago, the financial aid system, with Pell grants as the backbone, guaranteed access to public colleges for primarily low- and moderate-income students. Millions of Americans earned college degrees as a result, In 1975, the maximum Pell grant covered 84 percent of costs at a four-year public college. Now, the grant covers only 42 percent of costs at four-year public colleges and only 16 percent of costs at four-year private colleges.

Meanwhile, colleges are shifting away from grants and toward loans. A decade ago, 50 percent of student aid was in the form of grants and 47 percent was in the form of loans. Today, grants are down to 39 percent of total aid; loans have increased to 54 percent.

What's worse, many of these loans are irrespective of need. In 1992, Washington decided to further help out the wealthier by making unsubsidized loans available to all students, changing the definition of need, and increasing the limits for subsidized loans. Now unsubsidized loans, although the most expensive, account for more than half of all federal loan monies.

In a bureaucratic maneuver, the Bush Administration recently changed the federal needs formula that determines how much of a family's income is really discretionary--and therefore fair game for covering college costs. A report by the Congressional Research Service states that the new financial formula will reduce Pell grants by $270 million, disqualify 84,000 students from receiving any Pell grants, and reduce the amount of Pell grants for hundreds of thousands more students.

Skyrocketing tuition and reliance on interest-carrying loans force some students to forgo college altogether, while others drop out or delay graduation.

By reducing tuition subsidies, public colleges violate their mandates to individuals and to society to provide a quality education to all who qualify. Many universities are retreating from their commitments to provide low-cost education for state residents, as they shift the balance of admissions more toward out-of-state applicants who pay substantially higher tuition. State schools have traditionally been the ladders to good jobs for students from working families. Soon, only the wealthiest will be able to afford the best public colleges and universities.

In fact, the Congressional Advisory Committee on Student Financial Assistance reports that by the end of this decade as many as 4.4 million college-qualified high school graduates will be unable to enroll in a four-year college, and two million will not go to college at all because they can't afford it.

Many students who do go to college have to work long hours, which adversely affects their education. A whopping 53 percent of low income freshmen who work more than thirty-five hours per week drop out and do not receive a degree. Contrast this with low income freshmen who work fewer hours: Of those who work one-to-fourteen hours per week, only 20 percent do not receive a degree, according to the Congressional Advisory Committee on Student Financial Assistance.

Those who graduate carry an enormous debt. The majority of students (64 percent) graduate with an average debt of almost $17,000, up significantly from $8,200 in 1989. Faced with repaying huge loans, students often reconsider their career plans. Our society suffers if students abandon lower paying occupations in teaching, social services, and health care in order to seek courses of study that lead to higher income jobs that speed loan repayment.