Borrowing for college: The new angst

Just as prospective students need to get smarter about their options, federal, state and institutional policymakers must do their part to ensure those options contribute to our long-term socioeconomic goals.

Instead of fighting in Washington about ways to reduce spending on the federal Pell Grant program, Congress should look elsewhere for cost savings. Two options: eliminate tax benefits for those building private, nonprofit educational facilities; or lower the income caps for higher education tax credits taken by families that earn up to $180,000 per year and could afford to send their kids to college without them.

State governments must fulfill their promise of public higher education by reducing state institutions’ need to generate revenues through tuition hikes. State disinvestment in higher education has a direct impact on the costs facing students and families. Because of declines in state funding, tuition covers more than half the cost of public research universities today, up from 38 percent just 10 years ago. Nowhere is this more urgent than in California, where a $650 million cut to the state university system’s budget prompted a 23 percent tuition increase, and a recent proposal to slash the state Cal Grant program threatens to hurt low-income and middle-income students.

Finally, colleges must do a better job of controlling the net cost for low-income students. In the 1990s, public four-year institutions invested twice as much grant aid on their low-income students as they did on the more affluent. Today, spending on both groups is about equal. Meanwhile, private colleges now spend nearly twice as much on the wealthiest students as on the neediest.

Two things are clear: Inaction is not an option, and we are running out of time. Almost half the students in our K-12 schools are from low-income families. Unless we figure out how to make college affordable for everyone, we will fall far short of our national educational attainment and economic competitiveness goals. And we will fail to deliver on America’s twin promises of opportunity and social mobility for all who work hard and play by the rules.

Cruz is vice president for higher education policy and practice at The Education Trust, a national educational policy, research and advocacy organization.


