Sixty-seven thousand, five hundred and eighty dollars. This is the cost of tuition, fees, room, and board for a year at Harvard College, up nearly $2,000 from just last year. Many students and families squeeze their pocketbooks and scrape for financial aid or loans, while others must simply walk away. Even as a college education becomes increasingly necessary for success in the modern economy, it has been spiraling out of reach for students all over the country.
“Tuition and fees have skyrocketed enormously over the past three decades,” Mamie Voight, vice president of policy research at the Institute for Higher Education Policy, told the HPR. “They’ve actually increased at almost five times the rate of inflation, four times faster than family income, and even twice as fast as health-care costs.” For families across the country, this is very much a kitchen-table issue. “They are rising in a way that’s placing a really substantial burden on students and their families in terms of trying to access college and succeed in college,” Voight said.
As state governments have retreated from their role in funding higher education, students have picked up the bill. In particular, low-income students face the largest barriers to attending college. Technology has the potential to lower the costs of college, but the affordability crisis will not resolve itself. The government must restore and bolster its commitment to funding affordable higher education and prepare the next generation for a competitive economy.
Low-Income Affordability Still Matters
Low-income Americans remain decisively shut out of the country’s higher education system. “Less than 15 percent of low-income students get a four-year college degree, but more than six in 10 wealthy students do, and that’s a gap that we should be working to close,” Voight said. In impoverished communities around the country, college degrees are essential for improving low-income students’ economic prospects. The College Board reported that the median earnings of bachelor’s degree recipients are 67 percent higher than those of high school graduates, and many middle-skill jobs are now excluding workers who lack a degree. Without access to the rewards of higher education, low-income people fall further behind in the U.S. economy. “Right now the system is really failing low-income students,” Voight added. “College should really be a ladder out of poverty.”
If students could afford it, college would absolutely serve as this “ladder” to economic success. However, financial aid continues to lag behind tuition growth, and it has a very long way to go before closing the affordability gap. “Low-income students today have to devote an amount equivalent to more than 150 percent of their family’s annual income towards college costs, and that’s after accounting for all of the grants and scholarships that they receive,” Voight said. On the other hand, “high-income students only have to contribute about 14 percent of their family income to go to college.”
With such a large financial barrier to college attendance, students become largely shut out from the higher education system. “High-income students … can afford to attend about 90 percent of colleges across the country,” she explained, but “low-income students and middle-income students can only afford between 1 and 5 percent of colleges.” As it stands, financial aid is only just beginning to equalize Americans’ educational opportunities. “The picture is dramatically different depending on what financial resources a student brings to the table,” Voight concluded.
Nevertheless, need-based financial aid faces steep competition for funding. Its chief competitor is merit-based aid, which offers tuition relief to high-achieving students of all backgrounds. However, this practice leaves schools with less money to spend supporting low-income students. “Need-based aid can actually make a difference in students’ ability to attend a college and succeed once they get there,” Voight argued, “whereas non-need-based aid is pulling resources directly away from the students who most need that financial support.”
We’re Not in Cambridge Anymore
Prestigious colleges have made strides toward growing their financial aid programs, yet only a lucky few of America’s low-income teenagers are awarded such opportunities. Harvard offers free tuition to any family earning less than $65,000 a year, but most universities do not have a $39 billion endowment to assist scores of students with financial aid. “Elite colleges … have a very particular role to play” in championing college affordability, Voight said, but notably, children “in the top 1 percent of family incomes are 77 times more likely to attend an elite college compared to children from low-income families.”
Serving a small minority of students, elite private colleges will never be at the heart of the affordability crisis. Regardless, private school tuition is “leveling off,” said Martin Der Werf, associate director of postsecondary policy at Georgetown University’s Center on Education and the Workforce, in an interview with the HPR. “We had a situation in this country where tuition price equated quality, and so if you were too inexpensive, the market signal that you sent was that you weren’t very good, and that really got pretty carried away for awhile.”
Fortunately, reciprocal tuition hikes cannot continue forever. “We’re at a point from an economic standpoint where there’s got to be some shaking out in the marketplace,” according to Van Der Werf. “Especially for middle-tier private liberal arts colleges, unless they’ve really got something that can allow them to compete, I think we’re going to see some closings in the industry” — an indicator that private college tuition is unsustainably high.
The most important fights over college affordability are waged at public colleges and universities, which three-quarters of the nation’s college students attend. These schools have much more room for price hikes, and their long-term tuition outlook is bleak. “On the public side, I see tuition continuing to rise at a rate higher than inflation, and I think that’s going to continue for a while,” Van Der Werf predicted. This trend will impact not only out-of-state public tuition rates, but also the discounted in-state rates that are essential to college access and affordability. “I think that public colleges are trying to raise their out-of-state tuition more than their in-state tuition, but at some point they’re going to reach the point of diminishing returns.”
Where Did Government Go?
State governments are primarily responsible for funding public colleges, but “there’s been a real disinvestment in higher education on the part of state governments and legislatures,” Van Der Werf said. “And so to make up for that, public colleges have increased tuition. I think that’s been a huge factor on the public side.”
The funding cuts to higher education date back more than a decade. “Beginning with the recession of ‘08, everything had to get cut, and higher education probably didn’t have as much political power as it once had, and so in many cases colleges and universities took bigger cuts than other state agencies did,” Van Der Werf explained. “They started cutting funding to higher education. They didn’t stop. And it’s been very slow to come back to its previous levels.” Reaching far beyond college administrators, the issue has fallen on politicians in state legislatures across the country. “That’s a political fight that’s going to continue to play out.”
Students have witnessed the direct impact of inadequate state funding on tuition rates. “Several decades ago, we saw that states were covering the majority of tuition costs for students,” Voight said. “State support covered about 70 percent of college costs for students to attend public college, but today it’s declined to only about half for each student.” With fewer state resources, public colleges have forced students to bear the costs. “Students and families are left to pick up the other side of that equation and to invest more in their education out of their own pockets in order to access college.”
Many higher education activists will not be satisfied by merely slowing or reversing tuition growth. Morley Winograd, president of the Campaign for Free College Tuition, is one of them. “Pretty much everybody thought we were crazy,” Winograd told the HPR about the 2013 beginnings of the movement, which is known for Sen. Bernie Sanders’ (I-Vt.) backing. Focusing on state-level reform, it has since developed a broad base of support, garnering impressive majorities of favorability in public polling. “We’re kind of pushing on an open door because the idea is so popular with constituents of all types,” added Winograd.
“The real challenge for us in the states is finding a champion and finding the money, Winograd said, “and if you have those two things you get free college tuition.” More than 10 states — both Democratic and Republican — have now begun offering free two-year community college, though some programs maintain income eligibility restrictions. Hoping not to lag behind the European economy, they are following in the footsteps of Germany, France, Sweden, Denmark, Norway, Finland, and Iceland, which are among the countries that provide free or nearly free college tuition. In New York, four-year public college is now free for families earning up to $125,000.
These developments are reviving the century-old cause of the movement for free high school. “Community colleges in short will be the high schools of the 21st century in terms of their relationship to the communities they’re in,” Winograd said. Politically, states are ripe for such an assertion of higher education’s place in American society, especially given the country’s economic momentum. “Right now, many states do have the money thanks to the expansive economy,” he added. Legislators must be prompt and decisive in affirming that college affordability is a worthwhile expense.
The Changing Faces of Higher Education
As higher education becomes ever more embedded in the American economy, colleges will have to serve an evolving market of students. “They still are primarily focused on being an industry that’s educating recent high school graduates … It’s all built around 18 year olds,” Van Der Werf said. “The higher education industry needs to understand that that’s really only about a quarter of their market.” Many more adults have been returning to school in recent years, but they often struggle to afford it.
“These are people who typically are coming back to college as a way of retooling themselves or brushing up their skills,” Van Der Werf explained. “These people tend not to be folks with a lot of disposable income.” Simply lowering tuition at residential, four-year colleges is not the solution for these students. “The affordability crisis is really going to have to force colleges to figure out ways to serve these people differently,” he said. “They need credentials, they need things that they can get quickly, and they frankly can’t be all that high-priced.”
Many students turn to online education to find this flexibility and affordability. “We are reimagining education,” Anant Agarwal told the HPR. Agarwal is the CEO of edX, a non-profit created by Harvard and MIT that serves 14 million people with 1,900 online courses. “We are trying to reduce the cost of education while at the same time improving its quality and increasing access to learners.”
In addition to offering low-cost certificate and degree programs, edX also allows anyone to watch its courses for free. Likewise, because “employers increasingly value online education,” according to Agarwal, edX partners with major corporations to synchronize its curriculum with the workplace and coordinate students’ eventual employment. “Technology has transformed virtually every field known to mankind, and technology has a very important role to play in education.”
Nonresidential learners will not be the only students impacted by the development of online education. “Frankly, I think the days of 100 percent in-person education are numbered,” Agarwal said. “It will evolve to blended education, where at least some online education is intermingled with in-person education.” Constantly using online resources and streaming lectures, today’s undergraduates are already familiar with how the internet can shape their learning experience.
“We have to be really careful that we also be cognizant of quality of education,” Agarwal warned, but “I’m really optimistic that in the future we should be able to make inroads into undergraduate education … that is both very high quality and also with significantly lower costs than education today.”
Bolstered by technology, the United States has the toolbox it needs to tackle the mounting college affordability crisis. Modern higher education is evolving, but government support has failed to keep pace. With an emphasis on the low-income students who need it most, state governments have an obligation to restore and build on their role in funding college. Without affordable higher education, the next generation is destined to fall tragically short of its economic potential.
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