Nov/Dec 2009

State News: August 2009



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Students, Families Caught in Squeeze of Higher Education Affordability

By Bill Voit, CSG Senior Project Director
There’s a new phenomenon in higher education. An August 2008 Policy Alert from the National Center for Public Policy and Higher Education says while Americans think college is becoming critical to succeeding in life, there’s an increasing fear that access to higher education is slipping out of reach for many qualified and motivated students.
“This feeling of being caught in a squeeze play between growing importance and declining opportunity is driven, in large part, by the public’s reaction to the escalating price tag for a college education,” according to the center.
According to the Education Commission of the States, the average cost of college tuition rose by 110 percent over the last two decades, while median family income rose by only 27 percent. State and federal support for financial aid has also increased over the past decade, but has not kept pace with tuition increases.
In fact, the average cost of public, four-year, in-state universities (tuition, fees and room and board) is $14,333 for the 2008-2009 school year, The College Board reports. The average out-of-state cost for four-year, public universities is $25,200. Although some of that cost is offset by grants—according to The College Board, full-time students at public four-year colleges and universities receive an estimated average of $3,700 in grants from different sources—affordability is still an issue.
Families nationwide must now devote 28.5 percent of their annual income for public four-year colleges. The average loan per student, according to the commission, is $3,344 per year.
States offer a variety of ways to help pay college tuition and fees. Prepaid Tuition Plans and College Savings Plans are two examples. However, the federal government and at least a few states recently addressed tuition increases.
The federal Higher Education Opportunity Act established a Low Tuition program that awards grants to public colleges and universities to keep tuition and fee increases low. The act also calls for bonus amounts to public institutions as well as private colleges and universities that guarantee increases will not exceed a percentage under a specific formula, according to the Congressional Research Service.
A 2008 Louisiana law limits how much schools can increase tuition rates. Schools with in-state tuition at least 90 percent of the regional average of similar institutions can only increase their tuition by 3 percent a year, while schools that are between 80 percent and 90 percent of the regional average tuition can increase tuition by 4 percent. Schools with less costly tuitions below this level can increase their tuition by up to 5 percent each year.
In Oklahoma, beginning with the 2008-2009 school year, a 2007 law requires all public higher education institutions in the state to offer in-state students an option to participate in a guaranteed tuition rate plan. The plan would lock in tuition rates for the student’s freshman year for up to four continuous years. Two-year colleges must do the same for two consecutive years.
Washington state allows tuition increases of no more than 7 percent over the previous year through the 2016-2017 school year for any public university. The law does allow the state legislature to reconsider allowable increases if state appropriations, combined with tuition and fee revenue, are insufficient to achieve the total per-student funding goals.
A student-led California group, Students & Families for Tuition Relief Now, is promoting a model law to freeze tuition for five years for resident undergraduate students at the University of California and California State University. Thereafter, the law would prevent any future tuition increases from exceeding the inflation rate. The group failed to get the model on the November 2008 ballot, but members vow to continue trying for future ballots.


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