Winter 2011

50th Anniversary State of Education Series
WHY COLLEGE FEELS SO UNAFFORDABLE

Krista Logelin’s family knows firsthand just how difficult it is to afford a college education. Her father passed away after a year-long battle with lung cancer when she was 10 years old, and as a single parent, Krista’s mother knew it would be extremely difficult to afford college for her two children. Yet she was determined to send them to good schools. But when Krista’s mother was laid off from her job in 2008, she grew increasingly worried that she wouldn’t be able to help her daughter fulfill her dream of attending college, let alone send her to the school of her choice.

Stories like Krista’s are far too common today, as tuition costs escalate at virtually every postsecondary institution across the country. According to a 2010 Trends in College Pricing report by College Board, “Over the past 10 years, the published price of public four-year tuition and fees has increased by more than 5 percent annually above inflation. Comparatively, public two-year colleges saw a rise of nearly 3 percent and private four-year colleges also experienced a 3 percent increase.”

Research shows that parents, who once planned on paying the entire cost of tuition for their children, are now reluctantly telling their sons and daughters to take out student loans or attend more affordable institutions, either leaving them with tens of thousands of dollars in debt upon graduation, or preventing them from selecting the college that fits them best.

But some experts argue that families aren’t actually paying more for tuition, including Sandy Baum, Senior Associate for the Institute of Higher Education Policy (IHEP) and Professor Emerita of Economics at Skidmore College.

“On average, the sticker price has gone up much faster than the rate of inflation, but if you subtract grant aid and tax credits that families receive, families are actually paying less. The federal government has stepped in and dramatically increased subsidies, institutions are giving out more in financial aid, and states are giving more grants. So some people are paying more, but most families are not.”

But if that’s really the case, why does it feel like college costs more than ever?

“Because students aren’t just paying for tuition and fees,” Baum says. “While the amount that families are paying out of pocket for tuition and fees has stayed the same or even decreased over the last ten years, that is not true for living costs.”

Unless your son or daughter is living at home and commuting to college, they have to live in a dorm or apartment, buy food, and spend money on books and supplies. All of these things have gotten more expensive.

Another reason that families are struggling more, Baum says, is that household income levels are down. People have less money in savings, they’re making less, and they simply can’t afford tuition. “Even families that have had the foresight to save for their children’s education are seeing their savings depleted. Their dollars aren’t stretching as far as they once did. Money that once came from family income or savings is now coming from student loans.”

Tom Mortenson, Senior Scholar at the Pell Institute in Washington, D.C. and an independent higher education policy analyst, believes it’s more than just the combination of a weak economy and higher cost of living that is making college seem so expensive.

“Basically around 1980, decision makers started thinking that higher education was more of a private good rather than a public good and that students should pay for more of their education if they were going to receive a higher income as a result. The cost shifting occurred without sensitivity of students and families’ ability to pay, and state support started dramatically declining. When you cut state support, public institutions raise tuition to offset loss and the cost is shifted back to the student.”

Baum agrees that state funding toward public institutions has not kept up.

“Even though the total state funding toward public institutions has actually increased, it has not kept up with rising enrollment. Institutions are getting less per student from the state than they were ten years ago. As a result, public institutions have had to increase tuition and fees to make up for what they are not getting from the state,” she says.

So what can be done to offset this burden for families, and whose responsibility is it?

“Colleges and universities have to make sure they can lower their costs. States need to fund their institutions better. Federal government has a big role in providing student aid. And families have to make sacrifices and prioritize college tuition for their children,” says Baum.

Private scholarships are also essential to closing the gap between financial aid and what students and families have to pay out of pocket. Instead of foregoing college, Krista Logelin turned to Scholarship America. Krista received a $1,500 scholarship from her local Dollars for Scholars chapter; this scholarship, among others, relieved the burden on her family and allowed Krista to attend her dream college, Wellesley College.

SCHOLARSHIP RECIPIENT PAYS IT FORWARD IN TUCSON

Like all parents, Patty Gomez’s mother and father wanted to give their children the best possible life, which is why they emigrated from Mexico to Tucson, Arizona more than twenty years ago. Though they struggled to make ends meet for many years, they always knew that their two daughters would one day earn the college degrees that they had never had a chance to earn themselves.

Patty, the eldest of the Gomez sisters, now a senior at University of Arizona, reflected on this during her speech to Scholarship America’s board of trustees earlier this year.

“My parents instilled in me that there really is no better investment than one’s education. Coming from a first generation family, I feel like college is the key to opening up all these doors to opportunity—a better life for yourself and your future family, and for future generations,” she said.

Always knowing she wanted to attend the U of A, Patty worked extremely hard to achieve grades that could eventually earn her scholarships, as she knew that it would be a huge struggle for her parents to pay for education, and she didn’t want to be burdened with student loan debt.

Thanks to a generous scholarship from the University of Arizona, as well as a scholarship from her local Dollars for Scholars chapter in Tucson, Patty will be able to graduate with a Bachelor of Arts degree in Psychology this spring.

Growing up, Patty was fortunate to be surrounded by people who encouraged her to do her best and to one day go on to college. As a volunteer for the Early Academic Outreach program through the University, Patty facilitated a workshop for first and second graders, helping them with subjects like math and science, but also talking to the children and their parents about college.

“I can honestly say that given my experiences and the opportunities I have at the University of Arizona, I’ve truly been able to give back to my community,” said Patty.

A special note from Tucson: Scholarship America® is proud of Sunnyside Dollars for Scholars® scholarship recipient, Daniel Hernandez, for his involvement in helping save the life of Rep. Gabrielle Giffords during the tragic shooting this year in that city.

DR. IRVING FRADKIN: THE MAN WHO STARTED IT ALL

When Scholarship America® incorporated as a national organization in 1961, college tuition was a fraction of what it is today. But America saw a huge need for an educated citizenry, and for many middle class families, paying for college was simply not possible. As the number of jobs that required educated workers increased, so too did students’ desire for a college education, something that most parents hadn’t set aside money for and many just couldn’t afford.

Over fifty years ago, in Fall River, Mass., Dr. Irving Fradkin, a young optometrist with a new practice, was one of the first in the nation to do something about the discrepancy between a student’s desire to go to college and their family’s ability to pay for it. Read Dr. Fradkin's inspiring story here.

THE INSIDE VIEW: NOTES FROM SCHOLARSHIP AMERICA

• Dollars for Scholars Regional Conferences
  Launched fall 2010, our 50th Anniversary Regional Conferences are underway across America, where Dollars for Scholars volunteers are gathering to learn from expert speakers and network with other chapters in their area. Conferences are happening this spring in Iowa, California, Washington and
  Illinois.
  
  
• A Dollar a Day in May®
  This May, watch your email inbox for a special opportunity to give to Scholarship America in support of our 50th Anniversary – and an easy way to share your passion for supporting students’ educational dreams.
  
  
• Myscholarshipstory.org
  If you or someone you know received a scholarship from any of Scholarship America’s programs, including Dollars for Scholars®, Dreamkeepers, Families of Freedom®, or a scholarship managed by our Scholarship Management Services® division, don’t forget to submit your success story at myscholarshipstory.org, where we’re trying to gather as many student stories as we can to celebrate our 50th anniversary year.

SIX REASONS COLLEGE SEEMS SO EXPENSIVE

• College is worth more, so universities charge more
  The income gap between people who have college degrees and those who don’t has widened, making
  college degrees more valuable. Therefore, institutions can rationalize increasing their fees. (Source)
  
  
• The cost of high-end labor has increased
  Colleges rely on a highly educated workforce, which has become more expensive since the 1970s. (Source)
  
  
• Colleges don’t compete on price – they compete on academic reputation
  Hiring a “star professor” costs a lot of money, as do better amenities, which have become increasingly important to prospective students. (Source)
  
  
• Decline in state financing for education
  Between 1980 and 2010, state investment in higher education declined by 41 percent.
  
  
• The cost of running a university is rising faster than the consumer price index
  Scholarly journals have gone up in price by 200 percent over the last 20 years. Technology must also be updated continuously to keep up with the competition. (Source)
  
  
• Labor productivity in basic manufacturing has soared, but higher education remains an
  artisanal industry
  In other industries, like basic manufacturing, technological advances have greatly improved labor productivity. This doesn’t do a university any good when students interacting directly with professors and other students in small groups remain a benchmark of quality in education.