Making college affordable
- 1. Making College Affordable 597C Platform Skills April 6, 2010 Sung Youn Kwon suk225@psu.edu
- 2. Purpose Making College Affordable Tuition rise beyond Tuition rise within inflation inflation 1. Mandate a limit on tuition raise 2. Mandate 1 as a required qualification for federal aids At the Level of Federal Government
- 3. Content I. Background II. Cause and Effect III. Recent Policies IV. Proposal V. Strategy for Implementation
- 4. “College tuition isup 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
- 5. Cumulative Percentage Increases from 1990-1 to 2006-7 140% 120% 100% Tuition and Fees 80% Consumer Prices 60% 40% Median Household Income 20% 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.
- 6. Student Aid andLoans from 1998-9 to 2008-9 90,000 80,000 70,000 60,000 Federal Loan 50,000 40,000 Federal Grant 30,000 Nonfederal Loan 20,000 10,000 - 98-9 00-01 02-03 04-05 06-07 08-09 Sources: College Board, Trends in Student Aid 2009
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- 8. What is theMajor Cause? Decline of State Appropriation
- 9. What is theMajor Cause? Growth in Staff For recent 2 decades, support staff doubled - Student enrollment increased 40% Sources: Center for College Affordability and Productivity, 1987 to 2007 Constructions Buildings, library, convention center, gym…. - “Gym is a top priority for parents and prospective students” Sources: The New York Times, April 21, 2009, Freakonomics
- 10. What is theTrue & 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
- 11. “Virtuous circle” –Martin Trow (1984) Higher Compensation High Distinguished compensation Faculty Higher Reputation Higher Financial Resources More Higher Money Ranking Higher More Student Selectivity Students
- 12. What is theEffect? 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
- 13. College Affordability “FinancialBarriers 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)
- 14. College Affordability “By2020, United States once again will have the highest proportion of higher education graduates in the world.” (Obama, 2009)
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- 16. Recent Policies (Federal) TheHigher 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
- 17. Proposal Put a limiton Tuition Increase In 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)
- 18. Comparison with CurrentAct 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 the lowest quartile of public college, less limit : can not apply for federal aid & than $600 in annual increase fund program for 5 years
- 19. Howard P.Mckeon’s Proposal HowardP. (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”
- 20. Howard P.Mckeon’s Proposal Factorsof 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?
- 21. Strategy for Implementation President Obama’s Determination People’s Colleges & Universities’ Awareness & Support Agreement
- 22. Why the FederalGovernment ? 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
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