College tuition rises; financial aid can’t keep up

College tuition rises; financial aid can’t keep up

By Alex Swanson

A University professor recently published a study that found college is becoming less affordable and financial aid is falling short of tuition costs.

Jennifer Delaney, assistant professor of education, examined three major components that feed into college affordability: tuition, family income and financial aid.

Tuition has risen significantly over past decades, and Delaney said the increase is a direct result of decreased state funding.

“Higher (education) is very often one of the first places to be cut when the states face financial difficulties,” Delaney said. “And part of that is that institutions of higher ed can raise tuition, and there is another revenue stream coming in.”

She said states often cut higher education funds because universities are able to raise funds through tuition, independent of state money.

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According to Delaney, higher education fluctuates greatly with the state’s economic situation.

“States increase higher education funding at a faster rate than spending in other state budget categories during good budget times. In economic downturns, the reverse is true — states cut higher education appropriations more deeply and at a faster rate than spending in other budget categories,” Delaney said in her study titled “The Role of State Policy in Promoting College Affordability.”

Because tuition for many colleges has been on the rise, it has taken a financial toll on many middle- and low-income families. In recent years, the cost of sending a child to college has increasingly used a higher percentage of income for median-income households. In 2011, a median-income household spent 33.5 percent of its income to pay university attendance costs.

Through her research, Delaney found family income has stagnated in recent years, though tuition has risen drastically. 

Dr. James Applegate, executive director of the Illinois Board of Higher Education, said rising tuition costs have become a serious concern for Illinois families.

“We’ve got to address it,” Applegate said. “It’s becoming a real challenge, particularly for our middle and low-income families to be able to afford a two and four-year college in Illinois.”

Mark F. Smith, senior policy analyst for higher education at the National Education Association, said families are paying more than ever to send

their kids to college.

“The share that students and their families pay, which is largely tuition and fees, has gone way up,” Smith said. “And, the share that the state is contributing to the budget has gone straight down.”

Dan Mann, the University financial aid director, said financial aid no longer keeps up with college costs.

“Although there have been increases in financial aid funding over the years, these increases have not always kept pace with costs,” Mann said in an email. “Low-income students are generally able to receive grants and loan funding to help make college affordable. Middle-income students often struggle the most to make college affordable and accessible as their family income and resources may make them ineligible for grant aid but not high enough to support the college costs.”

Illinois’s primary undergraduate need-based financial aid system is the Monetary Award Program. Lynne Baker, managing director of communications at the Illinois Student Assistance Commission, said the program is covering less of the average student’s tuition.

“In 2002, MAP was able to meet the needs of all eligible applicants and fully covered average public university or community college tuition and fees,” Baker said in an email. “Today, with current MAP funding and the average grant award at about $2,600, MAP serves only about half the applicants who are eligible and covers less than half of tuition and fees at a public university in this state.”

In her study, Delaney also investigated the implications of the 2009 American Recovery and Reinvestment Act, or stimulus package, in relation to state funding for financial aid.

The act inhibited states from cutting higher education funding further than the appropriation level from either fiscal year 2008 or 2009, whichever was higher, if the states wanted to receive the stimulus money.

She studied all 50 states for three years before and after the stimulus money came into states. She also examined general appropriation funds and state spending on financial aid.

While most states followed the act’s regulations, they also cut financial aid budgets significantly, according to Delaney’s study. 

“The story changes when you look at state investment into financial aid,” Delaney said. “I found that states did significantly cut after the American Recovery and Reinvestment Act went in.”

Delaney estimates for every federal stimulus dollar the states received, the states cut about 12 cents out of student financial aid budgets. This problem, Delaney feels, could have been avoided with increased collaboration between departments that set regulations for appropriations and departments that deal with financial aid.

“This is my one recommendation,” she said. “We might have better policy outcomes overall for higher education if everything is talked about in the same negotiation.”

Alex can be reached at [email protected].