Scholarships

High Cost Of Higher Education

Introduction

Parents in the US have been pushed to the corner; they know and appreciate the importance of a college education but affordability hinders most of them from meeting their children’s needs. In today’s competitive world, even simple jobs require bachelor’s degrees. Consequently, students end up attending colleges far from their hometowns, apply for scholarships or drop out altogether. Despite numerous scholarship offers, some students still miss quality education because they may not qualify for college education. Additionally, those students who attend colleges end up struggling to meet their daily expenses since their parents spend a substantial portion for their incomes on tuition alone. The research aims at looking at the causes and consequences of rising educational costs. Additionally, it seeks to offer a solution to this reeling problem. (Benassi, 2005)

Causes of rising higher education costs

Many politicians, District Education Boards and school administrators agree on the fact that declining state support is the main reason behind plummeting college costs. The state is responsible for covering tuition cots. However, tuition costs only take up thirty three percent of total educational costs in these institutions. Colleges and universities have to take care of these anomalies on their own. Most of them end up increasing tuition costs or reducing the number of programs on offer. This is eventually translated to the students who has to attend college regardless of their financial positions. The situation is further aggravated by competition among different sectors of the economy. The health sector has taken up a lot of government funding leaving little for education. Additionally, the state has to spend on lower income earners or on retirees leaving the public sector.

Another major reason for these rising cost is increasing competition among universities and colleges. Reports such as ‘US News and World Report’ usually rank universities and colleges in terms of the nature and availability of resources. Consequently, many institutions want to show that they are a force-to-reckon-with. Most of them employ very expensive and famous professors, build state of the art dormitories and expand their sporting facilities. Eventually, the student body has to meet these expenditures. It should be noted that an arms race among universities is common in the private rather than in public schools. However, the same behavior trickles down to public schools given the fact that they also want to secure good students or produce good results. (Lang, 2006)

Rising costs occur because universities and colleges feel that they have the mandate to do so. The demand for college or university education is constantly on the increasing estimates have shown that the graduating class this year will be the highest ever recorded. However, seating space and classrooms have remained as they were. This implies that universities and colleges are in charge; they know that Americans desperately need college education. One of the reasons for this high demand is that income gaps between degree and diploma holders keeps rinsing. Employers have reinforced this perception since they give priority to university-educated individuals. Universities keep increasing their prices because they are aware that this will not reduce their intake levels at all.

Extent and consequences of the problem

Between the years 2002 and 2007, higher education costs have increased by a whooping thirty percent. This was a report made by the College Board after making a number of adjustments. Statistics further indicate that tuition costs have risen faster than health insurance, consumer prices and even personal income. Between the years 2006 and 2007 public universities charge a 12, 796 dollars for tuition and boarding fees. Private universities are even more notorious; they charge a whooping 30, 367 dollars for the same. The following figures on tuition costs in public colleges indicate just how serious these rising costs are;

2006-2007                                  Change from 2005-2006

Alabama                              $4,915                                               5%

California                           $4,560                                               1%

District of Columbia             $3,210                                               27%

Hawaii                                 $4,257                                               22%

Illinois                                  $8,133                                               2%

North Carolina        $4,063                                               10%

Florida                                $3,336                                               4%

National avg.                       $5,836                                               6%

Source: College Board (2008): Report on university tuition costs, retrieved from http://www.collegeboard.com

As if rising tuition costs are not problematic enough, even federal aid has reduced over the past five years. Consequently, there are increasing numbers of college students who have to live on students loans. This means that they leave college with huge debts. Actually, reports indicate that students debts have doubled over the past decade. In the year 1993, students with debts had to repay only $9,250 yet debts stand at 19,200 dollars in the year 2007. These numbers have changed by fifty eight percent after including an adjustment for inflation over these years. Some stakeholders assert that increasing the amount of federal aid will only inflate tuition prices further because schools will always count on state backup.

Scholarships offered to most students only manage to cover about twenty percent of educational expenses. This means that students themselves have to cover the rest. Parents have been forced to use up their emergency savings accounts. Those who happen to have college savings funds are compelled to use up all of it. Despite collecting funds from all sources, students will still graduate from college with debts to the tune of fifty thousand dollars or more.

The rising costs make it very difficult for parents to plan well for their children’s education. Repeatedly, parents assert that they have had to add about two thousand dollars more each year their children attend college.  This makes it very difficult to budget as one cannot anticipate what their child’s college will demand from them in the next year. (Martin, 2008)

The state funding system was set up in order to accommodate and fund students from poor backgrounds. However, this has not been achieved effectively because the students who end up getting state funds are those ones who understand the application process and not the ones who need it the most. It is very difficult for parents to secure scholarship for their students given the fact that most acceptance lists come out in student’s final high school years. Consequently, those who decide on the colleges they would like to attend have to do so hurriedly. Most of them end up choosing the wrong institution or missing out on a scholarship altogether. It should be noted that most of the students who qualify for scholarships are those ones who come from relatively stable backgrounds. In order to be well informed, their parents have to be at a good financial position. Parents hailing from humble backgrounds may not know about the intricacies of application. These same poor families have to deal with the rising education costs. Consequently, such groups have to squeeze their budgets even more.

Possible solutions

Congress has attempted to curb these soaring prices. For instance in 2007, they made a proposal to reduce interest rates on student loans. However, such an approach may not necessarily be the way forward. Reducing interest rates cannot ensure controlled college costs. Legislations must take the problem head on. Policies need to curb the inflated prices and not just interests on student loans.

The state could increase the amounts they offer in grant systems. This means that there will be more funds available for students both in public and private schools. Additionally, the state could improve their loan repayment options. The field of education is crucial to the US economy and should be given some special privileges over and above what other sectors receive. Besides these, the state could assess the system they use for selecting students who qualify for sponsorship. The government should aim at regulating fees from rich schools into poor schools. In this case, poor schools refer to those universities or colleges with high numbers of low income students. The government should avoid making legislations that increase the burden of payment on parents. Such legislations include scraping student loan consolidation. In 2004, Congress had proposed such a measure claiming that these allocations were costing the government huge sums. Such policies could spell doom for parents and should be discouraged at all costs. (Strauss and Wagner, 2008)

The federal government needs to step up their actions against universities or colleges that take advantage of their students. For instance, the state could set a price cap for increasing tuition fees for public universities and private institutions too. They could pass a law that penalizes universities that exceed this amount. The most appropriate penalty in this case is eliminating federal state funds for such universities or colleges. These price caps could be revised annually to make them in tune with economic conditions.

Additionally, the state could offer some special financial packages for students who perform well in school. The packages could be made automatic and could be tailored to needy students. Federal governments are already doing this in certain states and more states can adopt these measures too. Georgia already has a program known as Hope scholarship that operates on such a principle. New Jersey also has a similar program for residents who attend colleges within the state. Others should adopt similar measures. (Martin, 2008)

The government need not be the only party that can cause changes in the higher education sector. Universities and colleges themselves can do the same. They can make individual arrangements to reduce these rising costs. A case in point is the University of Virginia. The institution decided to introduce scholarships amounting to 16million dollars. These scholarships were meant for poor students and replaced student loans. Another notable university is Princeton; they created a different loan system based on needs rather than grants. The rest of the student population was given a total of 14, 520 dollar cap on tuition. All these changes occurred in the year 2001. Other universities that followed suit include;

• Harvard
• University of North Carolina

Harvard decided to reduce the amount of contributions coming from parents who earn less than forty thousand dollars annually. Additionally, they also reduced contributions to be made by parents who earn less than sixty thousand dollars annually. (Lederman, 2008)

The University of North Carolina opted to increase the number of full time grants to students who work for the university at between ten to twelve hours. Such an initiative goes a long way in cushioning students against rising tuition costs.

Conclusion

Rising higher education costs squeeze family budgets and may hinder promising students from joining the good colleges or universities. The government can do a lot to curb this problem; they could introduce price caps for private and public institutions in order to minimize these fluctuations. Additionally, they could introduce direct sponsorship program for needy yet promising students. The government should avoid legislations that reduce state funding. Universities can also do their part by reducing contributions made by low income parents and by increasing full time grants.

Reference:

Lang, S. (2006): How competition for the best students, faculties and facilities sends tuition soaring, retrieved from http://www.news.cornell.edu accessed on 11th July

Benassi, F. (2005): Growing Over Rising Cost of Higher Education, retrieved from www.standardandpoors.com/ringsdirec accessed on 11th July

Valerie Strauss and John Wagner (2008): Md. Keeps a Lid on Tuition, retrieved from http://www.washigntonpots.com accessed on 11th July

Lederman, D. (2008): A College-Friendly Take on Rising Prices, retrieved from http://www.insidehighered.com accessed on 11th July

Martin, T. (2008): Rising tuition threatens Michigan education goals, The Associated Press