Des Moines Register
04-15-07
Basu: College costs shutting doors
By REKHA BASU
REGISTER COLUMNIST
We're coming up on graduation season, and high school seniors are making hard
choices about where to go this fall. But more than ever, those choices are
complicated by tough questions about how to pay.
The fact that it's gotten harder than ever to pay for college has caused a
disturbing change in the demographics of incoming college students. Today's are
about 60 percent richer in household income than the population average,
according to a new study. That means the gap between those who can and can't
afford college is growing. And it means that income inequality is bound to
intensify since college graduates earn on average 60 percent more than those
without a degree.
I was recently among a group of parents, counselors, graduates and admissions
officers to speak at a local high school panel on planning for college. We all had
good stories to share. Our kids had done well; they were happy with where they
ended up. The admissions officers had sound advice on how to get into a good
school. But then there was the elephant in the room: Cost.
The median parental income is $73,400 for students at public universities and
$83,500 at private ones. The median household income in Iowa and nationally is
around $46,000.
In the last five years, tuition and fees at private colleges rose between 4 and 6
percent. Iowa's highest-ranked private college, Grinnell, this year announced a
12.6 percent hike over four years, to $33,000. Tuition at four-year public
universities jumped 40 percent between 2000 and 2005, according to the
nonprofit College Board. In Iowa, tuition and fees top $6,000 a year.
At the same time, college aid has fallen. The number of grants as a proportion of
student aid has declined each year since 2001, with states also allocating less
money to higher education since then.
That leaves students taking on major debt. Grinnell students typically leave with
$16,744 in loans to pay back; it's nearly double that much at Iowa State
University.
Federal policy changes have also upset the balance, benefiting upper-income
families at the expense of lower-income ones; 43 percent of the education tax
credits and about 70 percent of the benefits of the federal tuition tax deduction go
to taxpayers with incomes of $50,000 or more.
In 2006, Congress cut $12.7 billion from federal student aid programs over five
years, the largest single federal cut to student aid, in a deficit-reduction package.
Federal lawmakers also raised interests rates on federal Stafford loans, to 6.8
percent from a variable rate that fell as low as 4.7 percent, and on so-called
PLUS Loans (Parent Loans for Undergraduate Students) to 8.5 percent from a
variable set at 6.1 percent.
Iowa Gov. Chet Culver is looking in the right direction with plans to increase state
spending on scholarships at public colleges under the new All-Iowa Opportunity
program. But the damage done at the federal level will have to be undone.
Everyone on the panel I was on recently said not to let college costs stand in the
way of a good education for your children - leaving me to interject the one
sobering note.
Of course it shouldn't stand in the way, I said, but that's easier said than done.
My son's college costs 45 grand a year, and few of us have that kind of money to
spend. You do what you have to - beg or borrow - because it's a priority. But let's
face it, it's a big hit.
And not just for individual families. As a nation, we're in grave danger of
intensifying the gap between the wealthy and those just making it, when the one
reliable means to equality - a higher education - sits so high out of reach.
REKHA BASU can be reached at rbasu@dmreg.com or (515) 284-8584.