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    Making college affordable Making college affordable Presentation Transcript

    • Making College Affordable 597C Platform Skills April 6, 2010 Sung Youn Kwon suk225@psu.edu
    • Purpose Making College AffordableTuition rise beyond Tuition rise within inflation inflation1. Mandate a limit on tuition raise2. Mandate 1 as a required qualification for federal aids At the Level of Federal Government
    • ContentI. BackgroundII. Cause and EffectIII. Recent PoliciesIV. ProposalV. Strategy for Implementation
    • “College tuition is up sharply amid recession”In 2009, tuition rise in public college 6.5%, private 4.4%, consumer prices -2.1% Sources : http://www.collegeboard.com/press/releases/208962.html
    • Cumulative Percentage Increases from 1990-1 to 2006-7140%120%100% Tuition and Fees80% Consumer Prices60%40% Median Household Income20% 0% 1990-91 1995-96 2000-01 2006-7 Sources: Tuition and fees are from the Department of Education, consumer price index from the Bureau of Labor Statistics, median household incomes are from the U.S. Census Bureau.
    • Student Aid and Loans from 1998-9 to 2008-990,00080,00070,00060,000 Federal Loan50,00040,000 Federal Grant30,000 Nonfederal Loan20,00010,000 - 98-9 00-01 02-03 04-05 06-07 08-09 Sources: College Board, Trends in Student Aid 2009
    • Why?
    • What is the Major Cause?Decline of StateAppropriation
    • What is the Major Cause?Growth in Staff  For recent 2 decades, support staff doubled - Student enrollment increased 40% Sources: Center for College Affordability and Productivity, 1987 to 2007Constructions  Buildings, library, convention center, gym…. - “Gym is a top priority for parents and prospective students” Sources: The New York Times, April 21, 2009, Freakonomics
    • What is the True & Major Cause?Pursuit of High Ranking  Pursuit of “slack money”  Pursuit of high ranking in the US News & World Report (the “gold standard”) - Reputation 25%, Faculty resources 20% (Faculty compensation 35%) - Student selectivity 15%, Financial resourses 10% More money, Higher ranking
    • “Virtuous circle” – Martin Trow (1984) Higher Compensation High Distinguished compensation Faculty Higher ReputationHigher FinancialResources More Higher Money Ranking Higher More Student Selectivity Students
    • What is the Effect?Power Shift  Market Characteristic - Oligopoly, supply leads demand - Higher competition, higher price  High-tuition/High-aid Policy - High tuition does not guarantee high aid Power shifts from consumer to enterprise
    • College Affordability “Financial Barriers will prevent at least 4.4 million high school graduates from attending four-year public colleges over the next decade, and prevent another two million high school graduates from attending any colleges at all.” (The Congressional Advisory Committee on Student Financial Assistance, 2006)
    • College Affordability “By 2020, United States once again will have the highest proportion of higher education graduates in the world.” (Obama, 2009)
    • Who Should Pay?
    • Recent Policies (Federal)The Higher Education Opportunity Act 0f 2008  Pressure to high tuition by making the list public - Colleges of highest 5% & lowest 10% tuitions & fees (exemption : increase is less than $600 for 3 years) Obligation to disclose for federal funding - tuition and fees for recent 3 years - annual % , $ change for recent 3 years  Incentive grants - lowest 20% of annual increase, lowest quartile (public), less than $600
    • ProposalPut a limit on Tuition IncreaseIn the Higher Education Opportunity Act  Do not increase tuition beyond average inflation rate of recent 3 years  If not, the college will be disqualified for all federal funds for following 5 years - Exemption : increase less than $600 or tuition less than $6,000 * 24% students attending in 4-year colleges with below $6,000 a year (Sources : College Board, 2009)
    • Comparison with Current Act Higher Education Opportunity Act Proposal No limit on tuition increase Limit on tuition increase for federal aid for federal aid• Highest 5% and lowest 10% list of tuition & fees All college information• 3 years’ tuition & fees of on tuition & fees in 10 years all participators in Title IV•Highest 5% of tuition increase list in 3 years (%) All college information• 3 years’ tuition increase of on tuition increase in 10 years (%, $) all participators in Title IV (%, $)Incentive grant to lowest 20%, + Penalty to colleges not meet thelowest quartile of public college, less limit : can not apply for federal aid &than $600 in annual increase fund program for 5 years
    • Howard P.Mckeon’s ProposalHoward P. (Buck) Mckeon’s Proposal  Original (Mar., 2003) : colleges increasing tuition by twice (or more) the rate of inflation for two years will lose eligibility for all federal student-aid programs immediately  Revised (Oct., 2003) : “alert system” of 3 steps before losing eligibility for campus-based federal aid programs  Dropped (Mar., 2004) : “I’m delighted to send a strong message to colleges”
    • Howard P.Mckeon’s ProposalFactors of His Fail (The Chronicle, 2004)  Succumbed to the lobbying from colleges and universities  Failed to build political support even from some Republicans.  Bush administration did not back the bill Did you know about the Mckeon’s proposal?
    • Strategy for Implementation President Obama’s Determination People’s Colleges & Universities’Awareness & Support Agreement
    • Why the Federal Government ? Total Funds Used to Finance Postsecondary Education private and nonfederal loans employer grants 6% 7%institutional grants total 17% federal aids (grants, loans & work- study, tax benefits) 65% state grants 5% Sources: College Board, Trends in Student Aid 2009
    • Thank you !