The California
Legislative Analyst has a recent report on higher education that clarifies many
issues concerning the state of financial aid in the UC system. One of the key
findings is that while tuition is being covered by state, federal, and
institutional aid for many students, these different sources of support are not
keeping up with the other expenses college students encounter: “Living
expenses, including food and housing, transportation, and personal expenses,
make up the majority of undergraduate student budgets . . . These costs are
relatively high in California—about 20 percent higher than the national
averages.” One of the effects of
this high cost of living in California is that even though UC has kept tuition
flat for the last two years, students continue to graduate with high levels of
debt, and while in school, many students are forced to work long hours to pay
for their living expenses.
As I have pointed
out before, most politicians and higher ed officials only talk about the cost
of tuition when they discuss student debt, but the biggest reason for student
indebtedness is not tuition. For
example, Tennessee, Mississippi, and Oregon have received a lot of press
coverage for proposing that community college should be free; however, this
proposal would in reality increase student debt for low- and middle-income
student as it would funnel money to wealthier students. Since most of the lower-income students
are already paying no tuition because of need-based institutional and federal
aid, it is only the wealthier students who will be the major benefactors of
eliminating tuition; meanwhile, the money spent on giving free tuition to
wealthy students will prevent the state from giving aid to the lower income
students to pay for books, room, board, and other living expenses. Not only will the low-income students
have to borrow more money to stay in school, but they will also have to work
more to support their education, and this combination of increased debt and
increased student work is a recipe for students dropping out of higher
education. So if we want to stop a generation of students from being plagued by
life-crippling debt, and if we want to increase our graduation rates, we need
to find a way to pay for the total cost of attendance.
I have recently
updated my calculation of how much it would cost to pay for the total cost of
attendance for each undergraduate student at a public university and college in
America. In 2011-12, there
were 6.7 million full-time-equivalent undergraduate students enrolled in public universities and 4.2 million enrolled in community colleges. Since the average cost of tuition, room, board, books, and living expenses for undergraduates at public four-year institutions was $20,612, and at two-year public colleges, it was $13,237, the total cost was $195 billion.
Of course $195
billion is a lot of money, but if we look at how much the U.S. spent in 2011 on
financial aid and higher ed tax breaks, we come up with $201 billion:
$35 Billion
Pell Grants
$10 Billion
State Financial Aid
$27 Billion
Student Loan Subsidization
$40 Billion
Federal Tax Breaks
$12 billion Veteran
Higher Ed Benefits
@$17 Billion
529 College Savings Plans
@$10 Billion
State Tax Breaks (estimated)
@$40 Billion
Institutional Aid and Tuition Discounting
@$10
Billion Federal and State Work Study Funding
We are therefore
spending enough to make public undergraduate higher education free; however, we
are not allocating these resources in an organized and coherent manner.
For example, the federal government is currently spending $25 billion on
low-performing for-profit colleges that have very low graduation rates and
generate high student loan default rates. Moreover, colleges and
universities inflate their tuition price in order to pay for financial aid at
the same time more schools are moving from need-based aid to merit-based aid,
which privileges the wealthiest students.
It should be clear
that we need a national solution to a national problem, and his would entail a
new compact among schools, state governments, and the federal government.
While some may say that this is a new role for the federal government, we must
remember that the government already has strict requirements related to
research grants and financial aid; what we need to do now is to tie aid to the
institutions and force them to make the right decisions regarding access,
affordability, and quality.
