(This article was originally published February 2012; it has been updated with more recent college cost information.)
For my thirteen year old son’s birthday, I decided to stare into the abyss and calculate the future cost of college upon his graduation from high school in 2019. Of all people, I should know better. Now I’m sick. Using a multiplier I calculated that the annual comprehensive cost of our state’s flagship public university will be $36,783 when he is ready to enroll (in the original publication of this article the cost was $32,650). The cost for his 10 year old brother coming up behind him will be $42,547, in 2022. If they choose to enroll at the private liberal arts college their mom attended, the comprehensive cost will be $64,998 for the oldest and $75,184 for the youngest. Assuming they each graduate in 4 years, we could be looking at covering costs, one way or another, somewhere in the range of $317,000 - $560,000 to receive an undergraduate degree.
Did I mention that I’m not feeling well!?
The higher education system and financial aid programs designed to provide access to students are caught in an endless cycle of cat and mouse. Federal and state policy leaders, intent on helping their constituency access higher education, design elaborate and expensive grant programs to mitigate the ever-increasing costs of tuition and fees. Higher education institutions, intent on providing quality education, must deal with diminishing state and private funding and search for ways to compensate for critical resources. According to a recent report by the State Higher Education Executive Officers (SHEEO), between 2007-2012 state funding for higher education in the U.S declined by 23% (Tennessee declined 31.5%). Unfortunately, this often results in tuition increases to offset expenses with students and families assuming the greater expense.
Institutions calculate their tuition increases partly based on a financial analysis of their student demographics and any scholarship and grant dollars available. One possible result of this is that originally designed grant and scholarship programs do not have the hoped for intended effect - or at least not a sustainable effect. The effect, quite often, ends up being that initially the direct expense to the student drops slightly, then levels out and begins to increase over time, while the out-of-pocket expenses, such as books and supplies, continue to rise due to inflation. The comprehensive costs rise and the grant programs cannot keep pace.
This is a basic explanation of the higher education tuition increases that have been happening in our society ever since the G.I. Bill made higher education affordable to the masses after World War II. Fuel was added to the fire with President Johnson’s 1965 Higher Education Act and its reauthorization in 1972 which expanded federal aid programs including the Pell Grant, student loan programs, and Supplemental Educational Opportunity Grant (SEOG). Since the late 1970’s, costs at colleges and universities have been ever increasing, in part, due to the availability of grant and loan aid for students. It is what has made our higher education system the envy of the world as well as what makes it so expensive. Here is a chart (Horn, 2011) showing college tuition costs with future projections to 2025.
Prestigious colleges offer free tuition options or loan caps for families making under a certain income, but this serves a sliver of the population and is not an option for colleges with endowments less than a couple of billion. Community colleges and online options hold part of the solution. Community colleges have not increased at the rate of undergraduate institutions and online options do not have nearly the overhead. However, the impact of online education is still in the infancy stages while, like all of higher education, community colleges have been asked to do more with less. Investments in both academic and non-academic essential support services will be necessary in order to improve retention and graduation rates.
Low-income students depend on the federal Pell Grant (as I type this currently valued at $5,730) to cover higher education costs. What is concerning is that the value of the Pell grant has declined over time and fewer students are eligible for a maximum award. In 1980, a maximum Pell grant would nearly cover the cost of a public higher education institution. In 2011, a maximum Pell award only covered 34% of college costs at an undergraduate institution. Even though fewer students are eligible for a maximum Pell grant, it continues to be one of the greatest tools for providing access to higher education for students from needy families.
Middle-income students have even less to rely on and tend to end up with extraordinary debt from student loans. In fact, according to the College Board, middle-income students are graduating with the highest debt levels of any income group, currently 64% of all middle income students (incomes of $60,000 - $99,999) are graduating with over $30,500 in debt.
An educated society is essential for our future and higher education attainment is a critical indicator. But, to truly invest in increased access and opportunity that will improve our nation and economy, we must stop the cat-and-mouse game and come up with a new approach.
Bob Obrohta is the executive director of the Tennessee College Access and Success Network. He has a bachelor’s degree in political science from the University of St. Francis (Joliet, IL) and a master’s degree in higher education administration from Teachers College, Columbia University (New York, NY).