Category: financial aid

The Conversation about Free College Continues

This NPR piece does a pretty good job of getting on the table the tangle of issues that surrounds the cost of education question.

  • If education makes people economically better off, shouldn’t they pay for it? 
  • Does financial aid create an economic bubble? Are college costs un-disciplined by the market? 
  • Is there a public obligation or public interest in paying for higher education? To make a better democracy? To ensure a meritocratic society? 
  • Do elite universities merely reproduce privilege? 
  • If employers provide education benefits, is there a danger that the US makes the same mistake with education that it made with health care? 
  • Or is there a danger that industry will then define what education is? 
  • Does “free college” make sense? If it does, what happens to the private non-profit education sector? If MOOCs were/are not the answer, is there something else in the technology realm that is? 
  • Are answers possible when so many different powerful actors have so many different interests and ideologies? 

Free College For All: Dream, Promise Or Fantasy?

by ANYA KAMENETZ
June 19, 2014

 “Free” is a word with a powerful appeal. And right now it’s being tossed around a lot, followed by another word: “college.”

A new nonprofit, Redeeming America’s Promise, announced this week that it will seek federal support to make public colleges tuition-free. That effort is inspired by “Hope” and “Promise” programs like the one in Kalamazoo, Mich., which pays up to 100 percent of college tuition at state colleges and universities for graduates of the city’s public high schools.

Starbucks announced a tuition benefit for its employees that will cover classes taken online from Arizona State University.

And we wrote last week about a Tulsa, Okla., program that pays for two years of community college for county residents.

In reality there’s no free college, just as there’s no free lunch. The real policy discussion is about how to best distribute the burden of paying for it — between individual families and the public at large — and, secondly, how to hold down the cost of providing it. All while leveraging the power of “free” responsibly.

Proposal: Two Years of Free College for All

A recent paper by Sara Goldrick-Rab and Nancy Kendall suggests the actual policy goals of federal financial aid might be better met by redirecting it away from private institutions and toward support of two years of free education at state institutions. 

The authors argue (among other things) that private institutions are subsidized but actively resist accountability measures to which public institutions are subject and even with current subsidies the privates enroll a very small portion of low resource students (be sure to read pp 24ff). 

It is a provocative plan by smart scholars of higher education; ideas like this should engage us both for their social justice implications and for their implications to our institutions’ financial models.

Executive Summary

For almost fifty years, the federal government has tried to make the American Dream universally accessible by using need-based financial aid to lower the price of attending college. The effectiveness of this approach to expanding opportunity and investing in America’s future has diminished because of declines in real family income, increases in demand for college enrollment, poor regulation of state funding and institutional costs, insufficient funding for and targeting of grant aid, and a political movement that places the needs of private businesses and banks over those of students and families. The results have undermined the national ideal of equal opportunity to succeed and equal rewards for hard work. Talented students are forgoing college because of the costs, students who start college are unable to complete because they cannot afford to continue, and even students who finish degrees may not realize all of the expected returns because of sizable debt burdens. All but the wealthiest families must borrow or pay an amount equal to or exceeding one-quarter of their annual income in order to finance attending a public 4-year college or university.
Fortunately, financial aid is not the only way to make college affordable. We argue that it is time for the federal government to partner with states, public colleges and universities, and localities and businesses to offer two years of college for free. This paper outlines a Free Two Year College Option (F2CO) that can be funded with existing resources, developed to overcome the problems in previous efforts to make college more affordable, and designed to ensure that wider access occurs without reductions in educational quality. The effort begins with a simple message to every American interested in pursuing education after high school: If you complete a high school degree, you can obtain a 13th and 14th year of education for free in exchange for a modest amount of work while attending school. Key aspects of the F2CO plan include:
  • All eligible students can attend any public college or university (2-year or 4-year) for free for the first two years
  • Through a redirection of current federal financial aid funding, the federal government pays tuition for all students, and provides additional performance-based top-up funding for institutions that serve low-income students. We estimate that per-student funding will be higher than the average tuition currently charged by community colleges, and only slightly lower than the average tuition charged by four-year colleges
  • Participating institutions cannot charge tuition or additional fees to students
  • State funding for higher education will be redirected to cover books and supplies for all students
  • Student living expenses will be covered through a state and local stipend equal to fifteen hours a week of living wage employment in the area, federal work-study in an amount equal to fifteen hours a week of living wage employment in the area, and access to federal loans equaling up to five hours a week of living wage employment in the area
We believe that such a policy is long overdue, and will significantly expand the quality, efficiency, and effectiveness of our collective investments in postsecondary education and in a shared and secure future.

NPR Airs "Paying for College" Series

NPR aired a piece by Eric Westervelt on 25 March titled “Decoding College Financial Aid” (8:18) in their “Paying for College” series.

Many high school seniors are hearing from colleges about admissions and financial aid. Scott Juedes, director of Student Financial Services at Wellesley College, gives tips on decoding aid offers.

A companion text piece “Some Common Misconceptions About Paying For College” lays out some useful information the reporter learned while doing the story:

In reporting on students navigating the maze of college costs and financial aid, I kept running into misconceptions about paying for a degree. Here are some of the most common ones: 

Low-income students get most of their college financial aid needs met and rich kids don’t have to worry, so it’s mainly the middle class that gets squeezed. 

It’s a common misperception and “it’s simply not true,” says Lauren Asher, president of The Institute for College Access and Success, an independent, nonprofit research and advocacy group. Take Pell Grants, which go to low- and moderate-income families. A majority of Pell recipients are families with incomes under $50,000 a year. Those students “are much more likely to have loans and to owe more when they graduate from a four-year school than all other students,” she says.

Related Stories on Financial Aid and Cost of College

Experimenting with Price Cuts in Higher Education

I’ve long been an advocate of cutting tuition and getting away from the wrong-headed “luxury-price signals quality product” logic so common in lower and middle tier higher education. There are many reasons not to “just do it,” but more than a few things in favor of the idea should at least motivate serious discussion:
  • honesty in pricing might better reflect institutional values;
  • some prospective students never consider a school, knowing sticker price is out of their reach; the current system discriminates against such “humble realists”;
  • institutions should grapple with the fact that full-pay families might not be willing to participate in the institution’s redistribution scheme if they thought (knew) about it;
  • it is not clear there is any dis-interested, scientifically valid research on the implications;
  • revenue models rarely take into account the cost of administering Byzantine financial aid schemes;
  • some institutions are unfairly labeled “elitist” based on sticker price alienating people to whom their mission otherwise would appeal;
  • tuition discounting is one of many opacity practices that undermine administrators’, board members’, and faculty members’ capacity to effectively monitor the economics of their institutions.

See also