Contemplating the Cost of College – Time for a System Adjustment?

In the midst of commencement season, there is good news from the America’s Promise Alliance regarding high school graduation rates in the United States. In 2014, the rate hit a record high of 82.3 percent, with a reduction in the number of schools with low graduation rates. According to the Bureau of Labor Statistics, approximately 69 percent of new high school graduates continue their education at a college or university. Unfortunately, the cost of attending public two-and-four year colleges continues to increase, while state funding for these institutions remains below pre-recession levels.

A May 2016 brief from the Center on Budget and Policy Priorities explores how the cuts to higher education funding have resulted in these ever-increasing costs being passed on to students and families. Twenty states have cut funding by 20 percent or more since the recession. In Pennsylvania, per-student funding is 33 percent less than it was during 2007-08, even as tuition has increased.

Nationally, tuition increased nearly 30 percent from 2007-08 to 2014-15, while the median income decreased by 6.5 percent during that same time period.  Tuition alone for an incoming student at my (private 4-year) alma mater increased 348 percent since my own freshman year (total inflation between January of that year January 2016 calculated to be 86 percent).  Not surprisingly, the amount of debt that students graduate from public four-year colleges with has increased by 18 percent since 2007-08. To put this in perspective, the authors point out that in the 6 years prior to the recession the average amount of student debt increased just one percent.

A concern raised in this brief, Funding Down, Tuition Up State Cuts to Higher Education Threaten Quality and Affordability at Public Colleges, is that while tuition and fees have increased, faculty positions have been reduced or replaced by part-time instructors, classes have been cut, services for the student body have been scaled back, and some campuses have closed altogether. Students and families are taking on more debt to meet the increased costs but appear to be getting less.

Analyses and opinions vary on what has led to the jump in the cost of higher education and on any possible remedies. Perhaps it is time to adjust a system that has been in place for too long – before another bubble situation (similar to mortgages).  Perhaps student success outcomes should be tied to funding? There are no easy answers. Yet, although anecdotal, there seems to be a swath of the population that make too much for their academically successful teenager to receive aid, but too little to not require high 5-figure loans to off set the expense of a bachelor’s degree.  Is this the new normal?

Study Identifies Patterns in Rural Grants

A study from the U.S. Department of Agriculture Economic Research Service suggests that grants to rural-based organizations are on the decline.  The report, Foundation Grants to Rural Areas from 2005 to 2010: Trends and Patterns by John Pender, examined data on grants from the Foundation Center (of at least $10,000 awarded by the largest private and community U.S. foundations between 2005-2010), the National Center for Charitable Statistics, the Census Bureau, and USDA’s Economic Research Service to identify patterns grant distribution to rural communities in the United States.

Although 19 percent of the country’s population is located in rural areas, Pender concludes that grant funding “to rural-based organizations accounted for 5.5 percent of the real value of domestic grants by large foundations during 2005 to 2010, with a slight downward trend (based on Foundation Center data on grants by the largest 1,200 to 1,400 foundations).”  A random sample of large foundations found that 6.3 percent of the total value of grants awarded in 2010 went to organizations in rural areas. Analysis using a sample of small foundations found the rural share of total grant value went from 7.5 percent in 2005 to 7 percent in 2010. During this time period the majority of grants to rural communities came from independent foundations.

Other findings from the study:

  • The average dollar value per person of grants from large foundations to rural organizations was $88, versus $192 per person in metro counties.
  • Counties with more college-educated residents (even when grants to universities and students were removed from the sample) received more grants per person.
  • Rural organizations received more grants related to higher education, environment, and recreation/leisure than their urban counterparts.



Report Citation:  Pender, John L. Foundation Grants to Rural Areas Frrom 2005 to 2010: Trends and Patterns, EIB-141, U.S. Department of Agriculture, Economic Research Service, June 2015.

Ensuring an Education for Confined Juveniles

Earlier this week, the heads of the U.S. Department of Justice and Department of Education appeared at the Northern Virginia Juvenile Detention Center School for the joint release of a guidance package aimed at improving the quality of education for youths in juvenile justice facilities.  The package lays out best practices for the provision of educational programming to confined juveniles, and includes

  • guiding principles for education in secure juvenile facilities,
  • a clarification letter on agency obligations around providing an appropriate education to youths with disabilities who are confined in juvenile justice facilities,
  • a clarification letter on how federal civil right laws apply to educational services in juvenile justice facilities, and
  • an explanation of federal student aid that may be available for eligible youth in the juvenile justice system.

Research supports the link between higher education and a reduced risk of recidivism, so ensuring that the right of an education extends to youths in the juvenile justice system (and with it the possibility of a post-secondary education) may result in lower criminal justice system costs in the future.  The 2014 report Just Learning: The Imperative to Transform Juvenile Justice Systems into Effective Educational Systems from the Southern Education Foundation suggests that juvenile justice initiatives that work to prevent youth from re-offending could save society at least $2 million – and as much as $3.8 million – per youth over a decade.

You can read more about the costs and outcomes of the juvenile justice system in a 2011 post on juvenile incarceration.

Heading to College? Take Along the Basics of Personal Money Management

For many families, the month of August is all about shopping for and packing with their college-bound offspring, many of whom are living away from home for the first time. Parents and students are likely also discussing topics related to this exciting transition – living with roommates, choosing a major, time management, student-parent communication boundaries, and staying healthy. In all of this activity, the issue of personal financial management may be overlooked; or is assumed to be understood by the student, even though knowing what a budget is and living by one are two very different things. Some level of skill around money management is a critical aspect of living independently and should accompany every incoming freshman.

The National Foundation for Credit Counseling (NFCC), the country’s largest financial counseling nonprofit organization, released a checklist that covers the basic knowledge a young person should have in order to develop good fiscal habits. Some highlights:

  • Before they leave for college, plan and document a realistic monthly budget with your child. They should be responsible for tracking their own spending (there are apps for that!) as well as recording or monitoring all bank (including prepaid debit card) transactions.
  • Explain the real-life impacts of accruing credit card debt, especially on top of any student loan debt, from paying interest on a monthly basis when charges are not paid off to a poor credit report following them long after graduation.
  • Discuss the risk of identity theft and its fiscal implications, particularly related to information posted on social media, sharing passwords, and security issues with the use of public computers or unsecured Wi-Fi for financial transactions.

The Personal Finance 101 checklist and other resources are available at the NFCC’s website.