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According to Trends in College Pricing 2006, released on October 24th by The College Board, the cost of a postsecondary education is on the rise. For the current school year of 2006-'07, average total tuition and fees at four-year public colleges and universities are $5,836, up 6.3 percent, or $344, from last year’s figure. Similar increases were reported at two-year public (4.1%) and four-year private colleges and universities (5.9%). Since 1986-’87, tuition and fees at four-year public colleges and universities have increased an astounding 122%. Average total tuition and fees at four-year private colleges and universities have increased nearly 80% during the same two decades.

 

The College Board’s 2006 Trends report attributes this rise in net price to “reductions in revenue from sources other than tuition, particularly state and local appropriations in the public sector.” Though state and local government subsidizes public colleges and universities, providing nearly $60 billion each year, federal grants and loans have failed to keep up with rising costs at colleges and universities across the nation. As a result, students have turned to private loans in order to pay for their education. These private loans have increased from a mere five percent of what federal loans provided in 1994-’95 to twenty-five percent in 2005-’06. Regardless of the inability of federal aid to keep up with rising tuition costs, total student aid has increased ninety-five percent in the past decade.

 

The Pell Grants, constituting 68 percent of all federal grants, have undergone dramatic cuts in the past two years. In 2004-‘05, $13.6 billion was expended for Pell Grants by the federal government, while in 2005-’06, its budget decreased by seven percent to $12.7 billion. Between the same two academic years, the average grant per recipient dropped by $120 from $2,474 in 2004-’05 to $2,354 in 2005-’06. Alterations in the application for Pell Grants are responsible for this decline, says The College Board’s most recent Trends in Student Aid. According to the House of Representatives’ Fiscal Year 2006 Labor, Health and Human Services, Education Appropriations Bill, federal spending on the Pell Grants will increase to $13.8 billion, and the maximum award will increase to $4,100 from a previous $4,050. Because of shortfalls in the Pell Grant program last year, an additional $4.3 billion will also be provided.

 

Education Secretary Margaret Spellings, nominated in 2004 after President Bush’s re-election, created in September of 2005 the Commission for the Future of Higher Education in order to assess the current situation in postsecondary education. After a year of examining “the challenges facing higher education,” the commission laid out its conclusions in a final report, published on September 19th, 2006. “Our higher education financing system is increasingly dysfunctional,” the report concluded. “State subsidies are declining; tuition is rising; and cost per student is increasing faster than inflation or family income. Affordability is directly affected by a financing system that provides limited incentives for colleges and universities to take aggressive steps to improve institutional efficiency and productivity. Public concern about rising costs may ultimately contribute to the erosion of public confidence in higher education.”

 

Its findings echoed much of what The College Board’s Trends in College Pricing reports have pointed out for many years in regards to decreasing federal aid. On this note, the report commented, “We found that our financial aid system is confusing, complex, inefficient, duplicative, and frequently does not direct aid to students who truly need it . . . For the typical household, the Free Application for Federal Student Aid, or FAFSA, is longer and more complicated than the federal tax return. Moreover, the simplest IRS tax form, the 1040EZ, already collects most of the key pieces of data that could determine federal aid eligibility.” The report urged Secretary Spellings and the federal government to “replace the current federal aid form [FAFSA] with a much shorter and simpler application form” and also to “significantly” increase need-based student aid. The report concluded with its belief that “it is imperative that the nation give urgent attention to improving its system of higher education.”

 

At the National Press Club in Washington, Secretary Spellings held a speech on September 26th to discuss her plans for reform. “There is an urgent need for change in America’s higher education system,” she said. “We know higher education is the key to our children’s future and the American dream, yet it is becoming more unaffordable and less attainable. While our universities are known as the best in the world, ninety-percent of the fastest-growing jobs require post-secondary education and only one-third of Americans have a degree. Over the years, we've invested tens of billions of dollars in taxpayer money and just hoped for the best—we deserve better. To remain competitive in the 21st Century global economy, we must act now and continue the national dialogue and work together to find the right solutions.”

 

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