Breaking the Bank to Go to College; Financial Aid and Household Income Aren't Keeping Pace with Rising Tuition Costs, Leaving Many Students to Borrow More Money Than They Reasonably Can Afford. (Nation: Financial Aid)

By Hickey, Jennifer G. | Insight on the News, September 9, 2002 | Go to article overview

Breaking the Bank to Go to College; Financial Aid and Household Income Aren't Keeping Pace with Rising Tuition Costs, Leaving Many Students to Borrow More Money Than They Reasonably Can Afford. (Nation: Financial Aid)


Hickey, Jennifer G., Insight on the News


On Oct. 8, 1956, New York Yankees pitcher Don Larsen retired one Brooklyn Dodger after another for nine straight innings until a final called strike distinguished his performance as the only perfect game in World Series history. As stunning as his final pitch was in closing the door on perfection, the ball itself now may be used to open doors for Larsen's grandchildren. Concerned about the rising cost of college education, Larsen is auctioning that last pitched ball, as well as the glove he wore on that day 46 years ago, to try to pay for the education of his grandchildren.

This decision reflects the choices tens of thousands of families make each year as the cost of postsecondary education continues to rise at a rate faster than inflation. According to the National Center for Education Statistics, by 1995-96 nearly 50 percent of undergraduate students were receiving financial aid and, among full-time students, 68 percent received federal or state financial aid.

In 1970, financial aid to all students was equivalent to $11.15 billion in constant 1998 dollars, but that figure increased dramatically as more students began enrolling in two- and four-year colleges and universities. By 1998-99, the total amount of financial aid available to students had reached $61.8 billion. A year later, 56 percent of all undergraduates were receiving it.

In addition, the nature of aid underwent a change as well. Although evenly split at the beginning of the 1990s, by the 1999-2000 school year aid in the form of loans (59 percent) had surpassed federal and state grants (40 percent).

Despite the rising costs, college enrollment during the 1990s continued its rise from 60 percent of high-school graduates to 63 percent, according to the Institute for Higher Education Policy (IHEP).

Deputy Education Secretary William Hansen looks at the flip side of that statistic as a cause for concern. Addressing the Student Financial Assistance Spring 2002 conference in March, Hansen underscored the long-term importance of earning a degree. "Forty percent of our high-school graduates do not enroll in postsecondary education. That is a startling statistic when you consider that 80 percent of the jobs that are growing and providing self-supporting salaries in our economy require some postsecondary education and training," he said.

A confluence of economic and demographic factors, as well as a failure of financial aid and household income to keep pace with rising tuitions, has resulted in troubling trends relating to the affordability of a college education. More worrisome is that the trend seems likely to continue.

In its analysis, Losing Ground: A National Status Report on the Affordability of American Higher Education, analysts from the nonpartisan National Center for Public Policy and Higher Education (NCPPHE) found students face "relatively stable tuition in good times, have enjoyed tuition freezes and even reductions in the most prosperous times and have suffered steep price increases during recessions." In a time of political sensitivity, "many states find cuts are easier to make in higher education than in health care or other social services."

According to IHEP President Jamie Merisotis, "When you look at the tuition levels and the net price, which is basically the tuition minus any grantage, the net price is increasing faster in public institutions for both the low-income and middle-income students. It's a more complicated picture in the private institutions.... Part of the reason for this is because they pour more of their own money back into financial aid and scholarships."

Thus, in many private institutions, students paying full price are subsidizing the education of lower-income students whom the educators court for diversity purposes. In fact, Merisotis says, the largest single expenditure at private institutions in the last decade was on need-based financial aid. …

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