Report: Fed aid drives up college costs

Federal student aid hasn’t helped lower-income students go to college, concludes a report by the Center for College Affordability and Productivity. Instead, federal aid has enabled colleges to raise tuition.

Pell aid goes up, but so does tuition

The near-doubling of Pell Grant funding hasn’t decreased borrowing by low-income students, who are supposed to be the beneficiaries. States have cut funding and colleges have raised tuition using federal aid to make up the difference.

Why college costs so much

What’s Behind America’s Soaring College Costs? Private college tuition tripled over the past 40 years in real dollars, writes  Ronan Keenan in The Atlantic. “In the last decade the increase was a staggering 25 percent.”

Federal student aid more than doubled from 2002 to 2012, he writes. That enabled colleges to raise tuition. Lenders bear no risk because student loans are guaranteed by the government.

Colleges have effectively been guaranteed an income stream and have used that certainty to partake in an arms race against each other by constructing lavish facilities and inflating administrative processes. The pursuit of education has turned into a vicious circle in which students need bigger loans to pay for higher costs, and colleges charge higher costs because students are getting bigger loans.

University presidents are paid lavishly, like CEOs of big companies.

Professors are teaching less. Only 43.6 percent of full-time faculty members spent nine hours or more teaching, according to a 2011 survey by the Higher Education Research Institute. That’s down from 63.4 percent in 1991. Hours spent preparing to teach also fell. 

The only way to control tuition costs is to reduce government support, writes Keenan. If student loans weren’t backed by the government, lenders would be reluctant to loan large amounts to humanities majors with low earnings prospects and to unprepared students who are unlikely to graduate.

Both colleges and employers must embrace three-year bachelors degrees; the traditional four years is an arbitrary number that just extends the time in education. Institutions can also reduce costs by adapting to the modern age and offer more online learning. But they will only do this is if the government limits the ability of students to pay the prevailing high tuition costs.

The current model enriches the universities while “graduates drown in debt,” Keenan concludes. 

His proposal would cut access to higher education — and it would force colleges to cut costs. Is it worth it?

Fixing federal aid: What’s feasible?

Federal student aid is driving up tuition, encouraging students to go slowly and costing taxpayers a bundle, says an economist. He proposes directing aid to low-income students and linking eligibility to academic progress.

California: Low fees, waivers starve colleges

Californians pay only $1,380 a year to attend community college — less than half the national average — and at least 40 percent pay nothing. The board may limit fee waivers by requiring a C average.

You don’t get what you don’t pay for. Raising fees and limiting waivers would enable colleges to add high-demand courses and cut wait lists.

Obama: Link student aid to college value

President Obama proposes rating colleges on tuition, student loan debt, graduation rates and graduates’ earnings so students can shop for the best value. Eventually, Congress will be asked to reward higher-performing colleges with larger Pell Grants and lower-cost loans for their students.

College costs will continue to rise, predicts an economist.

Obama vows college cost controls

President Obama vowed to “shake up” higher education and “tackle rising costs,” in a speech on the economy that stressed college affordability for middle-class families.

A bipartisan student loan bill that will lower interest rates – at least for now — has passed the Senate and is expected to become law. The compromise ties interest rates to the government’s cost of borrowing.

Parents are spending less of their income on their children’s college costs and relying more on grants, scholarships, financial aid — and frugality — Sallie Mae reports.

No community college, no future

Without a community college, Erie, Pennsylvania keeps losing jobs and laid-off workers can’t afford to retrain. Industry is disinvesting.

Student aid fuels tuition inflation.

Free college! 24 years to pay!

Under Oregon’s Pay It Forward, Pay It Back plan, students would pay no tuition at state universities – if they agree to pay the state 3 percent of their earnings for 24 years. It’s a gamble for students and taxpayers, say critics. Students who plan careers in medicine, law, business and engineering will do much better paying the tuition up front, leaving Pay It Forward for students who don’t anticipate earning very much.

Is online learning for steerage?

Is online learning for steerage passengers, while only the elite actually meet their professors? MOOC madness is raising questions.

 App Academy‘s nine-week course in software coding is free — till students graduate and find a job. Then the for-profit takes 15 percent of their first year’s base pay,

an average of $12,000 per graduate. Graduates who aren’t hired within a year pay nothing.