College Students Strain to Cover Rising Tuition at Public Institutions
The image of the affordable, accessible four-year state university is taking a beating these days, battered by reports of spiraling costs and looming debts that confront students and their families at every turn.
In study after study, a new portrait of the average undergraduate at public institutions is emerging. Students from low- and middle-income homes are seeing a larger-than-ever percentage of their families' incomes swallowed by tuition costs at public universities, the research suggests.
Those students who commit to higher education, experts say, are more likely than ever to end up taking out loans—which have to be repaid—instead of grants, which do not. And to try to stay out of debt, a majority of today's undergraduates will work while in school, some in full-time jobs, data suggest.
"I felt the burn last year. This year will be a lot harder," said Mayrose Wegmann, 21, a sophomore at the University of Iowa, who works full time and has taken out about $8,000 in loans so far. "There's not enough time to work and get your schoolwork done."
But students and families also have proved to be a determined lot, higher education researchers say. Despite rising costs, many still find college affordable enough to attend, even if it means borrowing more money.
Enrollment at public four-year universities has risen, and will continue to climb, according to recent figures and projections from the U.S. Department of Education.
"The concern about college becoming less affordable is absolutely right. It's not a sustainable trend," said Jane Wellman, a senior associate at the Institute for Higher Education Policy, a Washington-based think tank. "But it's also true that students are figuring out how to pay for college."
Next academic year, a record number of college students—an estimated 4.4 million—are expected to receive Pell Grants, the nation's largest financial-aid program for low-income students.
And 8.4 million students and families will get some kind of grants, loans, or work-study assistance next year, according to the fiscal 2003 budget proposal for the Education Department.
But for students like Ms. Wegmann, keeping up with costs means spending more time away from school.
She works 40 hours a week at a Hy-Vee grocery store, earning $7 an hour, while maintaining a full course load. She used to have an on-campus job, but gave it up because it was a limited number of hours.
Despite her efforts, the money is flowing out faster than she can bring it in. Last year, the university raised tuition by 7.8 percent, to $3,116 annually for in-state students. Next year, it's slated to go up 18.5 percent, to $3,692. Room, board, and fees will rise from $5,286 to $6,054 next year, according to the school's financial aid office. That's an increase of 14.5 percent.
And so Ms. Wegmann chose a path many students take: She went into debt. Her freshman year, she said, she took out $2,000 in student loans. She predicts that her total borrowing will reach $12,000.
"I know many students here are going through it," Ms. Wegmann said recently. "They don't have the energy after working. They're either dropping out or going into debt with student loans or credit cards."
The rising costs can be seen nationwide, not just at the University of Iowa, which is located in Iowa City. From 1992 through 2001, tuition at four-year public colleges and universities rose faster than family income in 41 states, according to a study released this month by the National Center for Public Policy and Higher Education.
At two-year community and technical colleges, traditionally the most affordable pathway into higher education, tuition climbed faster than family income in 34 states, the study by the nonpartisan center in San Jose, Calif., found.
Mark S. Warner, the University of Iowa's financial-aid director, agrees that students are borrowing more, but he also notes that about 38 percent of the school's undergraduates finished without any kind of debt for the spring of 2001. Only 3 percent ended up defaulting on their federal Stafford loans in 1999, the most recent year recorded, he said. "We don't like to see the costs go up, but we think it continues to be an affordable education for our students," Mr. Warner said.
Boom and Bust
Roughly three-quarters of four-year college students today work, and about one-quarter of them hold down full-time jobs, according to "Access and Persistence," a study released this month by the American Council on Education, a Washington policy organization representing about 1,800 colleges and universities.
Working up to 15 hours a week could help students stay focused in school, but spending more time than that could detract from studies, said Jacqueline E. King, the director of the center for policy analysis at the ACE.
"We don't know if the number of students working has gone up, but the average amount they're working probably is," Ms. King said.
And the obstacles for low-income students have become more daunting, several studies suggest.
In 1979, the maximum Pell Grant covered 77 percent of a student's costs for tuition and room and board at a public, four-year institution; this year, the top award paid 40 percent of those costs, according to the Education Department.
In April, Congress called for an increase in the maximum Pell Grant award, from $4,000 to as much as $4,500. The White House countered by telling Congress to find the money to make up for the current year's funding gap first, which would result in a maximum grant to students of only $3,600.
But in a weak economy and the absence of recent budget surpluses, federal officials have struggled to find the money. A White House proposal to make up the Pell Grant shortfall by ending students' options for consolidating loans at fixed-interest rates was quickly withdrawn after objections from Congress.
Last week, House Republicans indicated that they supported a $1 billion supplemental appropriation for Pell Grants for the current year, a sign that the GOP has retreated from what was a politically unpopular stance.
Still, Bush administration officials note that there are still plenty of options to pay for a postsecondary education. Student loans are more affordable and accessible than ever, Deputy Secretary of Education William Hansen told Congressional officials recently, especially with today's low interest rates.
"Over 10.2 million students and parents will be eligible for these low-interest rate loans in 2003 under the president's budget—over a million more recipients than when the president took office," Mr. Hansen told the Senate Health, Education, Labor, and Pensions Committee this month.
But Mr. Hansen also said the nation's colleges and universities need to work harder to contain their costs.
The National Center for Public Policy and Higher Education also makes that point, concluding in its recent report that states and public universities need much better financial planning.
From 1980 to 1998, state support for public universities was steady, rising by 13 percent, the study found. But tuitions rose by about 41 percent during that same period.
When the economy is thriving, as in the late 1990s, states tend to spend generously on higher education, according to the study, "Losing Ground: A National Status Report on the Affordability of American Higher Education." States expand university programs with little regard for their long-term costs, it contends, while keeping tuition increases to a minimum.
But when harder economic times come around, as they have recently, states end up cutting money for those same programs. Public colleges and universities scramble to recover the lost money through big tuition increases, the study concluded.
That boom-and-bust cycle repeats itself time and again, hurting students the most during recessions, said Joni E. Finney, the policy center's vice president.
States and universities need to think twice before creating expensive new research and graduate programs, or new campuses that likely won't have big enrollments, she said. They also should raise tuition more gradually, in good and bad economic times, linking those hikes with increases in average family income, Ms. Finney argued.
"In the late 1990s, so much money poured into higher education," she said. "There's no reason we couldn't have leveraged that. Now schools are suffering."
Vol. 21, Issue 38, Page 6Published in Print: May 29, 2002, as College Students Strain to Cover Rising Tuition at Public Institutions