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HIGHER ED COMES AT A HIGH COST

WITHOUT FINANCIAL AID, STUDENTS ARE BEING PRICED OUT OF GETTING A DEGREE

Story compiled by Mary Ann Cooper

There was a time when people took great pride in saying, “I worked my way through college.” Unfortunately, that time has passed. The explosion of tuition, fees, residence costs and books has made it impossible for students to earn enough money to earn a degree without securing grants, scholarships or loans.  

higher education comes at a high cost

The Department of Education’s National Center for Education Statistics updated its sources of financial aid in its report The Condition of Education 2016. They compared academic years 2008-09 with 2013-14. The startling truth is the financial situation in higher education gets worse with every passing year as students have to take on more and more debt to get a college education. 

First, let’s examine the various ways students finance their higher education that were included in this report. As described in The Condition of Education 2016 report, “Grants and loans are the major forms of federal financial aid for degree/certificate-seeking undergraduate students. The largest federal grant program available to undergraduate students is the Pell Grant program. In order to qualify for a Pell Grant, a student must demonstrate financial need. Federal loans, on the other hand, are available to all students. In addition to federal financial aid, there are also grants from state and local governments, institutions, and private sources, as well as private loans. In this report, student loans include only loans made directly to students; they do not include Parent Loans for Undergraduate Students (PLUS) and other loans made directly to parents.”

The raw numbers reveal that both in community colleges and four-year institutions more students are receiving financial aid today than in 2008-09 or any previous time. Although this would seem to be a positive thing, it is a direct result of exploding costs, not an improvement in outreach or marketing to these same students. 

According to the report, “The percentage of first-time, full-time degree/certificate-seeking undergraduate students at four-year degree-granting postsecondary institutions receiving any financial aid was higher in 2013–14 (85 percent) than in 2008–09 (82 percent). The percentages of students receiving aid at the different four-year institutions were also higher in 2013–14 than in 2008–09. In 2013–14, the percentages of students receiving aid at four-year public institutions (83 percent), four-year private nonprofit institutions (89 percent), and four-year private for-profit institutions (89 percent) were higher than they were in 2008–09 (79 percent at public institutions, 87 percent at private nonprofit institutions, and 85 percent at private for-profit institutions).”

While community college was once considered a financial bargain, now financial aid is considered a necessity for anywhere from 77 percent to 92 percent of students (depending upon whether they attend a nonprofit, profit, public or private institution). According to the report, “For two-year degree-granting postsecondary institutions, the percentage of first-time, full-time degree/certificate-seeking undergraduate students receiving any financial aid increased from 71 percent in 2009 to 78 percent in 2014. During this time, the percentage of students receiving aid at two-year public institutions increased from 66 to 77 percent. For students at both two-year private nonprofit and two-year private for-profit institutions, the percentage of students receiving aid was also higher in 2014 than in 2009. In 2014, the percentages of students receiving aid at two-year private nonprofit institutions (92 percent) and two-year private for-profit institutions (86 percent) were higher than they were in 2009 (87 percent at private nonprofit institutions and 85 percent at private for-profit institutions).”

In terms of federal grants and funding, students who attend public institutions are at a breathtaking disadvantage compared to private nonprofit and profit institutions. In fact, nearly three-fourths of private for-profit school students receive federal grants compared to little more than one third of public institutions. The report reveals, “In 2014, the percentage of first-time, full-time degree/certificate-seeking undergraduate students receiving federal grants at four-year institutions was higher at private for-profit institutions (72 percent) than at public institutions (38 percent) and private nonprofit institutions (33 percent). The percentage of students at four-year institutions receiving state or local grants was higher at public institutions (37 percent) than at private nonprofit institutions (26 percent) and private for-profit institutions (11 percent). The percentage of students receiving institutional grants was higher at four-year private nonprofit institutions (82 percent) than at four-year public institutions (45 percent) and four-year private for-profit institutions (34 percent). The percentage of students at four-year institutions receiving student loan aid was 78 percent at private for-profit institutions, 61 percent at private nonprofit institutions, and 50 percent at public institutions.” 

It’s a mixed picture for two-year institutions students receiving federal, state and local grants. While the playing field is a bit more level for all three types of institutions (with private for-profit institutions still holding close to a twenty point advantage over public schools), public institution students received 30 percent more state and local grants than private for-profit institution students. According to the report, “For first-time, full-time degree/certificate-seeking undergraduate students at two-year institutions in 2013–14, the percentage of students receiving federal grants was higher at private for-profit institutions (73 percent) and private nonprofit institutions (71 percent) than at public institutions (56 percent). A higher percentage of students at two-year public institutions (37 percent) received state or local grants than students at two-year private nonprofit institutions (27 percent) and two-year private for-profit institutions (seven percent). About 49 percent of students at two-year private nonprofit institutions received institutional grants, compared with 14 percent of students at two-year private for-profit institutions and 12 percent of students at two-year public institutions. The percentage of students at two-year institutions receiving student loan aid was higher at private for-profit institutions (70 percent) and private nonprofit institutions (66 percent) than at public institutions (24 percent).”

On an individual level, students attending four-year schools saw relatively similar monies in the average amounts of federal, state/local and institutional aid in 2014, but grants from individual institutions varied widely. According to the report, “The average federal grant was $4,788 for first-time, full-time students at private nonprofit institutions, $4,661 at private for-profit institutions, and $4,629 at public institutions (reported in constant 2014–15 dollars). The average state or local grant was $3,792 at private nonprofit institutions, $3,752 at public institutions, and $3,045 at private for-profit institutions. There were larger differences by institution control in the average institutional grant awards. The average institutional grant award was higher at private nonprofit institutions ($17,088) than at public institutions ($5,476) and private for-profit institutions ($3,104). The average student loan amount was higher at private for-profit ($8,648) and private nonprofit ($8,128) institutions than at public institutions ($6,701).” •