College Planning & Management

AUG 2012

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and fees rise 2.6 percent per year above infl ation and now stand at an average of $28,500 per year. Add $9,000 to $10,000 per year for tu- ition and fees for room and board, and even the lowest four-year price tag — for in-state public colleges — approaches $70,000. Four years in a private nonprofi t institution now costs, on average, more than $150,000. State and Local Funding for Public Institutions State and local jurisdictions have tra- ditionally funded public institutions with an eye to keeping tuition and fees as low as possible for in-state students. The recession of 2001 and the Great Recession wrecked that goal. Last year, says SHEF, state and local funding support for public higher educa- tion totaled $87.5B — including $2.8B from the American Recovery and Reinvest- ment Act (ARRA). That total was higher than support provided in 2009 and 2010 but still below the $88.8B recorded in 2008, before the recession. Lest you think state and local support appears to be coming back after the reces- sion, SHEF calculates state and local support on a per-student basis. After adjusting for infl ation and growing student populations, support per student in 2010 was $6,532, which is $500 less than 2009. In 2011, sup- port per student fell once again, to $6,290. More students, higher costs, fewer dol- lars per student. A bad formula. Federal Loans Fighting back against declining state support, the federal government has made an enormous commitment to higher education in the past decade. Here are the numbers, as presented by "Trends in Stu- dent Aid, 2011" from the College Board. During the 2010-2011 school year, the federal government supported higher edu- cation to the tune of $169B through student loans, grants, tax benefi ts, and funding for work-study programs, up 164 percent since the 2000-2001 school year, when the federal contribution was $64B. Loans are the largest portion of federal support. In 2010-2011, federal loans totaled approximately $104B, about $70B went to public and private undergraduate stu- dents and $34B went to public and private graduate students, up 139 percent since the 2000-2001 year. Stafford loans accounted for $86B of 2010-2011 federal student loans made directly to undergraduate and graduate students. There are unsubsidized and subsidized Stafford loans. Federal direct loans also included about $17B in unsubsidized plus loans for parents of dependent students and graduate and professional students. Next came about $1B in Perkins loans for needy students. Several miscellaneous federal programs made about $131M in loans as well. Federal Grants According to "Trends in Student Aid, 2011," federal grant programs provided $49B in postsecondary funding for the 2010-2011 year, up 249 percent since 2000- 2001, when federal grants totaled just $14B. The federal government makes Pell Grants based on fi nancial need, usually to undergraduates. In 2010-2011, students with demonstrated need received $35B in Pell Grants, making this the largest federal grant category for higher education. Second largest was grants to veterans and the military, which totaled about $12.5B. In 2010-2012, Federal Supplemental Educational Opportunity Grants (FSEOGs) totaled $758M. These are grants to stu- dents with exceptional fi nancial needs. LEAP Grants totaling $64B in 2010-2011 went to states, which passed the funds through to colleges and universities that make the awards. Federal funding covers a $1B program called Federal Work-Study that provides part-time jobs for needy students. During the 2010-2011 school year, par- ents and students qualifi ed for about $15B in tax credits for educational expenses fi rst made available by the ARRA and since extended by Congress. Two more federal programs, Academic Competitiveness Grants and SMART grants, combined to provided about $1B to needy students in 2010-2011. Congress failed to re- authorize these programs for 2011-2012. Other federal programs totaling about $10B support programs that help prepare students to enroll in and complete college, fund institutional development for schools that enroll large numbers of minority and disadvantaged students, provide aid for schools serving Hispanic students, and help community colleges move graduating students into jobs. What's Next: The Presidential Campaign While economic and employment is- sues may headline this year's presidential campaign, the results will have signifi cant consequences for higher education funding. Democrats hope to preserve the current federal commitment and add a few innova- tions to help reduce costs. Testifying before the House of Repre- sentatives' Committee on Education and the Workforce, Secretary of Education Arne Duncan asked for a relatively modest net increase of $1.7B for higher education in fi s- cal year 2013. The request includes $1B for a higher-education "Race to the Top" program based on the successful K–12 model. The postsecondary "Race to the Top" pro- gram will make grants to public institutions developing the best programs to increase affordability, quality, and graduation rates. Another new program would use $55.5M to create a "First in the World" fund designed to help public and private post- secondary schools and nonprofi t organiza- tions develop strategies to improve college completion, lower costs, and increase qual- ity. "Awards could be used to support such activities as using technology to redesign coursework, improve early college prepara- tion to mitigate the need for remediation, and developing and implementing compe- tency-based instruction and assessment," AUGUST 2012 / COLLEGE PLANNING & MANAGEMENT 17

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