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Vocapedia > USA > Education > Higher education


College costs, Tuition rates, Student debt





by Garry Trudeau


June 10, 2012








































































































































































You Are Not a Loan        The Intercept        25 January 2021





You Are Not a Loan        Video        The Intercept        25 January 2021


Right before Covid-19 disrupted our lives,

I assembled a group of activists and academics

to discuss the crisis of higher education

and what was next for the growing movement to cancel student debt

and make college and university tuition free.


The 45-minute film “You Are Not a Loan”

is a record of this encounter,

which took place on February 7, 2020.






















At the Midland School in Los Olivos, Calif.,

$49,900 buys a school year’s room and board

and a shot at Stanford and Harvard,

just as a fee in the mid-five figures

would at Andover or Exeter.










college affordability










cost of college / college costs / college education costs
































skyrocketing cost of college










cartoons > Cagle > College costs        2011










NPR > podcasts > Special series > Paying For College

















for-profit colleges / for-profit education































non-profit colleges


the-nonprofit-college-that-spends-more-on-marketing-than-financial-aid - January 12, 2022















pay for college










fees > tuition, room, board











women's college > Northampton, Massachusetts. Smith College > fees


Smith College

is an elite 145-year-old liberal arts college,

where tuition, room and board top $78,000 a year

and where the employees who keep the school running

often come from working-class neigbhorhoods.











college tuition fees



















tuition rates




























free college

















colleges > endowments















affirmative action














school vouchers / voucher program











school vouchers > Indiana's statewide voucher program > Choice Scholarship






















qualify for a scholarship















Federal student aid


Free Application for Federal Student Aid    FAFSA






federal college grants






Pell Grant recipients






free college education / free college


















USA > student loans / student loan debt / student debt        UK / USA



































































































student loan debt collectors







student loans > pay off








student debt forgiveness






federal student loans > student loan bill        2013








burdened with debt






take out loans to go to college






Student debt:

'College education

brings you the American hell' - video        UK        2012


In America,

a good education costs money

– but at what price?


In the first

of our primary election video series

Answer the Question,

Suzanne Goldenberg

goes on the campaign trail in Iowa

to ask Republican presidential candidates

how they plan on helping graduates

who are struggling to pay off

cripplingly large student loans

when there are no jobs
























poor student










low-income students












first-generation college students







homeless students






rescue failing students











Corpus of news articles


USA > Education > Higher education




Top Colleges,

Largely for the Elite


May 24, 2011

The New York Times



The last four presidents of the United States each attended a highly selective college. All nine Supreme Court justices did, too, as did the chief executives of General Electric (Dartmouth), Goldman Sachs (Harvard), Wal-Mart (Georgia Tech), Exxon Mobil (Texas) and Google (Michigan).

Like it or not, these colleges have outsize influence on American society. So their admissions policies don’t matter just to high school seniors; they’re a matter of national interest.

More than seven years ago, a 44-year-old political scientist named Anthony Marx became the president of Amherst College, in western Massachusetts, and set out to change its admissions policies. Mr. Marx argued that elite colleges were neither as good nor as meritocratic as they could be, because they mostly overlooked lower-income students.

For all of the other ways that top colleges had become diverse, their student bodies remained shockingly affluent. At the University of Michigan, more entering freshmen in 2003 came from families earning at least $200,000 a year than came from the entire bottom half of the income distribution. At some private colleges, the numbers were even more extreme.

In his 2003 inaugural address, Mr. Marx — quoting from a speech President John F. Kennedy had given at Amherst — asked, “What good is a private college unless it is serving a great national purpose?”

On Sunday, Mr. Marx presided over his final Amherst graduation. This summer, he will become head of the New York Public Library. And he can point to some impressive successes at Amherst.

More than 22 percent of students now receive federal Pell Grants (a rough approximation of how many are in the bottom half of the nation’s income distribution). In 2005, only 13 percent did. Over the same period, other elite colleges have also been doing more to recruit low- and middle-income students, and they have made some progress.

It is tempting, then, to point to all these changes and proclaim that elite higher education is at long last a meritocracy. But Mr. Marx doesn’t buy it. If anything, he worries, the progress has the potential to distract people from how troubling the situation remains.

When we spoke recently, he mentioned a Georgetown University study of the class of 2010 at the country’s 193 most selective colleges. As entering freshmen, only 15 percent of students came from the bottom half of the income distribution. Sixty-seven percent came from the highest-earning fourth of the distribution. These statistics mean that on many campuses affluent students outnumber middle-class students.

“We claim to be part of the American dream and of a system based on merit and opportunity and talent,” Mr. Marx says. “Yet if at the top places, two-thirds of the students come from the top quartile and only 5 percent come from the bottom quartile, then we are actually part of the problem of the growing economic divide rather than part of the solution.”

I think Amherst has created a model for attracting talented low- and middle-income students that other colleges can copy. It borrows, in part, from the University of California, which is by far the most economically diverse top university system in the country. But before we get to the details, I want to address a question that often comes up in this discussion:

Does more economic diversity necessarily mean lower admissions standards?

No, it does not.

The truth is that many of the most capable low- and middle-income students attend community colleges or less selective four-year colleges close to their home. Doing so makes them less likely to graduate from college at all, research has shown. Incredibly, only 44 percent of low-income high school seniors with high standardized test scores enroll in a four-year college, according to a Century Foundation report — compared with about 50 percent of high-income seniors who have average test scores.

“The extent of wasted human capital,” wrote the report’s authors, Anthony P. Carnevale and Jeff Strohl, “is phenomenal.”

This comparison understates the problem, too, because SAT scores are hardly a pure measure of merit. Well-off students often receive SAT coaching and take the test more than once, Mr. Marx notes, and top colleges reward them for doing both. Colleges also reward students for overseas travel and elaborate community service projects. “Colleges don’t recognize, in the same way, if you work at the neighborhood 7-Eleven to support your family,” he adds.

Several years ago, William Bowen, a former president of Princeton, and two other researchers found that top colleges gave no admissions advantage to low-income students, despite claims to the contrary. Children of alumni received an advantage. Minorities (except Asians) and athletes received an even bigger advantage. But all else equal, a low-income applicant was no more likely to get in than a high-income applicant with the same SAT score. It’s pretty hard to call that meritocracy.

Amherst has shown that building a better meritocracy is possible, by doing, as Mr. Marx says, “everything we can think of.”

The effort starts with financial aid. The college has devoted more of its resources to aid, even if the dining halls don’t end up being as fancy as those at rival colleges. Outright grants have replaced most loans, not just for poor students but for middle-class ones. The college has started a scholarship for low-income foreign students, who don’t qualify for Pell Grants. And Amherst officials visit high schools they had never visited before to spread the word.

The college has also started using its transfer program mostly to admit community college students. This step may be the single easiest way for a college to become more meritocratic. It’s one reason the University of California campuses in Berkeley, Los Angeles and San Diego are so much more diverse than other top colleges.

Many community colleges have horrifically high dropout rates, but the students who succeed there are often inspiring. They include war veterans, single parents and immigrants who have managed to overcome the odds. At Amherst this year, 62 percent of transfer students came from a community college.

Finally, Mr. Marx says Amherst does put a thumb on the scale to give poor students more credit for a given SAT score. Not everyone will love that policy. “Spots at these places are precious,” he notes. But I find it tough to argue that a 1,300 score for most graduates of Phillips Exeter Academy — or most children of Amherst alumni — is as impressive as a 1,250 for someone from McDowell County, W.Va., or the South Bronx.

The result of these changes is that Amherst has a much higher share of low-income students than almost any other elite college. By itself, of course, Amherst is not big enough to influence the American economy. But its policies could affect the economy if more colleges adopted them.

The United States no longer leads the world in educational attainment, partly because so few low-income students — and surprisingly few middle-income students — graduate from four-year colleges. Getting more of these students into the best colleges would make a difference. Many higher-income students would still graduate from college, even if they went to a less elite one. A more educated population, in turn, would probably lift economic growth.

The Amherst model does cost money. And it would be difficult to maintain if Congress cuts the Pell budget, as some members have proposed. But when you add everything up, I think the model isn’t only the fairest one and the right one for the economy. It’s also the best one for the colleges themselves. Attracting the best of the best — not just the best of the affluent — and letting them learn from one another is the whole point of a place like Amherst.

“We did this for educational reasons,” Mr. Marx says. “We aim to be the most diverse college in the country — and the most selective.”

Top Colleges, Largely for the Elite,






Is Going to an Elite College

Worth the Cost?


December 17, 2010

The New York Times



AS hundreds of thousands of students rush to fill out college applications to meet end-of-the-year deadlines, it might be worth asking them: Is where you spend the next four years of your life that important?

The sluggish economy and rising costs of college have only intensified questions about whether expensive, prestigious colleges make any difference. Do their graduates make more money? Get into better professional programs? Make better connections? And are they more satisfied with their lives, or at least with their work?

Many college guidance counselors will say, find your own rainbow. But that can sound like pablum to even the most laid-back parent and student.

Answers to such questions cannot be found, typically, in the sort of data churned out annually in the U.S. News and World Report rankings, which tend to focus on inputs like average SAT scores or college rejection rates. Handicappers shy away from collating such information partly because it can be hard to measure something like alumni satisfaction 5 to 10 years out. Moreover, in taking a yardstick to someone’s success, or quality of life, how much can be attributed to one’s alma mater, versus someone’s aptitude, intelligence and doggedness?

But economists and sociologists have tried to tackle these questions. Their research, however hedged, does suggest that elite schools can make a difference in income and graduate school placement. But happiness in life? That’s a question for another day.

Among the most cited research on the subject — a paper by economists from the RAND Corporation and Brigham Young and Cornell Universities — found that “strong evidence emerges of a significant economic return to attending an elite private institution, and some evidence suggests this premium has increased over time.”

Grouping colleges by the same tiers of selectivity used in a popular college guidebook, Barron’s, the researchers found that alumni of the most selective colleges earned, on average, 40 percent more a year than those who graduated from the least selective public universities, as calculated 10 years after they graduated from high school.

Those same researchers found in a separate paper that “attendance at an elite private college significantly increases the probability of attending graduate school, and more specifically graduate school at a major research university.”

One major caveat: these studies, which tracked more than 5,000 college graduates, some for more than a decade, are themselves now more than a decade old. Over that period, of course, the full sticker price for elite private colleges has far outstripped the pace of inflation, to say nothing of the cost of many of their public school peers (even accounting for the soaring prices of some public universities, especially in California, suffering under state budget crises).

For example, full tuition and fees at Princeton this year is more than $50,000, while Rutgers, the state university just up the New Jersey Turnpike, costs state residents less than half that. The figures are similar for the University of Pennsylvania and Pennsylvania State University. (For the sake of this exercise, set aside those students at elite colleges whose financial aid packages cover most, if not all, of their education.)

Despite the lingering gap in pricing between public and private schools, Eric R. Eide, one of the authors of that paper on the earnings of blue-chip college graduates, said he had seen no evidence that would persuade him to revise, in 2010, the conclusion he reached in 1998.

“Education is a long-run investment,” said Professor Eide, chairman of the economics department at Brigham Young, “It may be more painful to finance right now. People may be more hesitant to go into debt because of the recession. In my opinion, they should be looking over the long run of their child’s life.”

He added, “I don’t think the costs of college are going up faster than the returns on graduating from an elite private college.”

Still, one flaw in such research has always been that it can be hard to disentangle the impact of the institution from the inherent abilities and personal qualities of the individual graduate. In other words, if someone had been accepted at an elite college, but chose to go to a more pedestrian one, would his earnings over the long term be the same?

In 1999, economists from Princeton and the Andrew W. Mellon Foundation looked at some of the same data Professor Eide and his colleagues had used, but crunched them in a different way: they compared students at more selective colleges to others of “seemingly comparable ability,” based on their SAT scores and class rank, who had attended less selective schools, either by choice or because a top college rejected them.

The earnings of graduates in the two groups were about the same — perhaps shifting the ledger in favor of the less expensive, less prestigious route. (The one exception was that children from “disadvantaged family backgrounds” appeared to earn more over time if they attended more selective colleges. The authors, Stacy Berg Dale and Alan B. Krueger, do not speculate why, but conclude, “These students appear to benefit most from attending a more elite college.”)

Earnings, of course, and even graduate school attendance, are but two of many measurements of graduates’ success post-college.

Earlier this year, two labor and education professors from Penn State, along with a sociologist from Claremont Graduate University in California, sought to examine whether graduates from elite colleges were, in general, more satisfied in their work than those who attended less prestigious institutions.

Writing in April in the Journal of Labor Research, the three researchers argued that “an exclusive focus on the economic outcomes of college graduation, and from prestigious colleges in particular, neglects a host of other employment features.”

Mining a sample of nearly 5,000 recipients of bachelor’s degrees in 1992 and 1993, who were then tracked for nearly a decade, the authors concluded that “job satisfaction decreases slightly as college selectivity moves up.” One hypothesis by the authors was that the expectations of elite college graduates — especially when it came to earnings — might have been higher, and thus more subject to disappointment, than the expectations of those who graduated from less competitive colleges.

Still, one of those authors, Scott L. Thomas, a sociologist who is a professor of educational studies at Claremont, said high school students and their parents should take any attempt to apply broad generalizations to such personal choices with a grain of salt.

“Prestige does pay,” Mr. Thomas said in an interview. “But prestige costs, too. The question is, is the cost less than the added return?”

His answer was one he said he knew families would find maddening: “It depends.”

For example, someone who knew he needed to earn a reliable salary immediately after graduation, and as a result chose to study something practical like business or engineering, might find the cost-benefit analysis tilted in favor of a state school, he said.

“Students from less affluent backgrounds are going to find themselves in situations where college is less about ‘finding themselves,’ and more about skills acquisition and making contacts that will lead straight into the labor market,” Mr. Thomas said. For such a student, he said, a state university, particularly a big one, may also have a large, passionate alumni body. It, in turn, may play a disproportionate role in deciding who gets which jobs in a state in a variety of fields — an old-boy (and increasingly old-girl) network that may be less impressed with a job applicant’s Ivy league pedigree.

“If you’ve attended a big state school with a tremendous football program,” Mr. Thomas said, “there’s tremendous affinity and good will — whether or not you had anything to do with the football program.”

In the end, some researchers echo that tried-and-perhaps-even-true wisdom of guidance counselors: the extent to which one takes advantage of the educational offerings of an institution may be more important, in the long run, than how prominently and proudly that institution’s name is being displayed on the back windows of cars in the nation’s wealthiest enclaves.

In this analysis, one’s major — and how it aligns with the departmental strengths of a university — may be more significant than the place in the academic pecking order awarded to that college by the statisticians at U.S. News.

“Everything we know from studying college student experiences and outcomes tells us that there is more variability within schools than between them,” said Alexander C. McCormick, a former admissions officer at his alma mater, Dartmouth College, and now an associate professor of education at Indiana University at Bloomington.

“This is the irony, given the dominance of the rankings mentality of who’s No. 5 or No. 50,” Professor McCormick added. “The quality of that biology major offered at School No. 50? It may exceed that at School No. 5.”



This article has been revised

to reflect the following correction:

Correction: December 17, 2010

An earlier version of this article referred incorrectly

to the RAND organization as a foundation.

Is Going to an Elite College Worth the Cost?,






College May Become Unaffordable

for Most in U.S.


December 3, 2008

The New York Times



The rising cost of college — even before the recession — threatens to put higher education out of reach for most Americans, according to the biennial report from the National Center for Public Policy and Higher Education.

Over all, the report found, published college tuition and fees increased 439 percent from 1982 to 2007 while median family income rose 147 percent. Student borrowing has more than doubled in the last decade, and students from lower-income families, on average, get smaller grants from the colleges they attend than students from more affluent families.

“If we go on this way for another 25 years, we won’t have an affordable system of higher education,” said Patrick M. Callan, president of the center, a nonpartisan organization that promotes access to higher education.

“When we come out of the recession,” Mr. Callan added, “we’re really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we’re one of the few countries where 25- to 34-year-olds are less educated than older workers.”

Although college enrollment has continued to rise in recent years, Mr. Callan said, it is not clear how long that can continue.

“The middle class has been financing it through debt,” he said. “The scenario has been that families that have a history of sending kids to college will do whatever if takes, even if that means a huge amount of debt.”

But low-income students, he said, will be less able to afford college. Already, he said, the strains are clear.

The report, “Measuring Up 2008,” is one of the few to compare net college costs — that is, a year’s tuition, fees, room and board, minus financial aid — against median family income. Those findings are stark. Last year, the net cost at a four-year public university amounted to 28 percent of the median family income, while a four-year private university cost 76 percent of the median family income.

The share of income required to pay for college, even with financial aid, has been growing especially fast for lower-income families, the report found.

Among the poorest families — those with incomes in the lowest 20 percent — the net cost of a year at a public university was 55 percent of median income, up from 39 percent in 1999-2000. At community colleges, long seen as a safety net, that cost was 49 percent of the poorest families’ median income last year, up from 40 percent in 1999-2000.

The likelihood of large tuition increases next year is especially worrying, Mr. Callan said. “Most governors’ budgets don’t come out until January, but what we’re seeing so far is Florida talking about a 15 percent increase, Washington State talking about a 20 percent increase, and California with a mixture of budget cuts and enrollment cuts,” he said.

In a separate report released this week by the National Association of State Universities and Land-Grant Colleges, the public universities acknowledged the looming crisis, but painted a different picture.

That report emphasized that families have many higher-education choices, from community colleges, where tuition and fees averaged about $3,200, to private research universities, where they cost more than $33,000.

“We think public higher education is affordable right now, but we’re concerned that it won’t be, if the changes we’re seeing continue, and family income doesn’t go up,” said David Shulenburger, the group’s vice president for academic affairs and co-author of the report. “The public conversation is very often in terms of a $35,000 price tag, but what you get at major public research university is, for the most part, still affordable at 6,000 bucks a year.”

While tuition has risen at public universities, his report said, that has largely been to make up for declining state appropriations. The report offered its own cost projections, not including room and board.

“Projecting out to 2036, tuition would go from 11 percent of the family budget to 24 percent of the family budget, and that’s pretty huge,” Mr. Shulenburger said. “We only looked at tuition and fees because those are the only things we can control.”

Looking at total costs, as families must, he said, his group shared Mr. Callan’s concerns.

Mr. Shulenburger’s report suggested that public universities explore a variety of approaches to lower costs — distance learning, better use of senior year in high school, perhaps even shortening college from four years.

“There’s an awful lot of experimentation going on right now, and that needs to go on,” he said. “If you teach a course by distance with 1,000 students, does that affect learning? Till we know the answer, it’s difficult to control costs in ways that don’t affect quality.”

Mr. Callan, for his part, urged a reversal in states’ approach to higher-education financing.

“When the economy is good, and state universities are somewhat better funded, we raise tuition as little as possible,” he said. “When the economy is bad, we raise tuition and sock it to families, when people can least afford it. That’s exactly the opposite of what we need.”



This article has been revised to reflect the following correction:

Correction: December 4, 2008
Because of an editing error, an article on Wednesday about the increasing cost of higher education gave an incorrect context for two figures: the 439 percent increase in college tuition and fees and the 147 percent increase in median family income since 1982. Those figures were not adjusted for inflation. The error was repeated for the data in an accompanying chart. A corrected chart appears at nytimes.com/national.

The article also described incorrectly the report for the National Center for Public Policy and Higher Education that cited the figures. It is produced every other year, not annually.

    College May Become Unaffordable for Most in U.S., NYT, 3.12.2008,






Tough Times

Strain Colleges Rich and Poor


November 8, 2008

The New York Times



Arizona State University, anticipating at least $25 million in budget cuts this fiscal year — on top of the $30 million already cut — is ending its contracts with as many as 200 adjunct instructors.

Boston University, Cornell and Brown have announced selective hiring freezes.

And Tufts University, which for the last two years has, proudly, been one of the few colleges in the nation that could afford to be need-blind — that is, to admit the best-qualified applicants and meet their full financial need — may not be able to maintain that generosity for next year’s incoming class. This fall, Tufts suspended new capital projects and budgeted more for financial aid. But with the market downturn, and the likelihood that more applicants will need bigger aid packages, need-blind admissions may go by the wayside.

“The target of being need-blind is our highest priority,” said Lawrence S. Bacow, president of Tufts. “But with what’s happening in the larger economy, we expect that the incoming class is going to be needier. That’s the real uncertainty.”

Tough economic times have come to public and private universities alike, and rich or poor, they are figuring out how to respond. Many are announcing hiring freezes, postponing construction projects or putting off planned capital campaigns.

With endowment values and charitable gifts likely to decline, the process of setting next year’s tuition low enough to keep students coming, but high enough to support operations, is trickier than ever.

Dozens of college presidents, especially at wealthy institutions, have sent letters and e-mail to students and their families describing their financial situation and belt-tightening plans.

At Williams College, for example, President Morton Owen Schapiro wrote that with last year’s negative return on the endowment and the worsening situation since June, some renovation and facilities spending would be reduced and nonessential openings left unfilled.

Many students, increasingly conscious of costs, are flocking to their state universities; at Binghamton University, part of the New York State university system, applications were up 50 percent this fall. But with this year’s state budget problems, tuition increases at public universities may be especially steep. Some public universities have already announced midyear tuition increases.

With endowment values shrinking, variable-rate debt costs rising and states cutting their financing, colleges face challenges on multiple fronts, said Molly Corbett Broad, president of the American Council on Education.

“There’s no evidence of a complete meltdown,” Ms. Broad said, “but the problems are serious enough that higher education is going to need help from the government.”

And as in other sectors, she said, some financially shaky institutions will most likely be seeking mergers.

Nationwide, retrenchment announcements are coming fast and furious, as state after state reduces education financing.

The University of Florida, which eliminated 430 faculty and staff positions this year, was told recently to cut next year’s budget by 10 percent, probably requiring more layoffs. Financing for the University of Massachusetts system was cut $24.6 million for the current fiscal year.

On Thursday, Gov. Arnold Schwarzenegger of California proposed a midyear budget cut of $65.5 million for the University of California system — on top of the $48 million reduction already in the budget.

“Budget cuts mean that campuses won’t be able to fill faculty vacancies, that the student-faculty ratio rises, that students have lecturers instead of tenured professors,” said Mark G. Yudof, president of the California system. “Higher education is very labor intensive. We may be getting to the point where there will have to be some basic change in the model.”

Private colleges, too, are tightening their belts — turning down thermostats, scrapping plans for new gardens or quads, reducing faculty raises.

But many are also increasing their pool of financial aid.

Vassar College will give out $1 million more in financial aid this year than originally budgeted, even though the endowment, which provides a third of its operating budget, dropped to $765 million at the end of September, down $80 million from late June. President Catharine Bond Hill of Vassar said the college would reduce its operating costs, but remain need-blind.

Many institutions with small endowments, however, will probably become more need-sensitive than usual this year, quietly offering places to fewer students who need large aid packages.

At Dickinson College in Pennsylvania, Robert J. Massa, the vice president for enrollment and student life, said that about 200 applicants last year might have been accepted if they had not needed so much financial help, but that that number might rise to 250 this year.

Dickinson’s endowment was $280 million in mid-October, Mr. Massa said, down from $350 million in June. And while more than three quarters of the college’s operating budget comes from student fees, some endowment revenue will have to be replaced.

“Here’s the rub,” Mr. Massa said. “I really don’t think that colleges can afford to increase their tuition price at higher than inflation this year. I don’t think the public will stand for it. What we’ve done in higher education is let our dreams and aspirations dictate our cost structure.”

Most colleges will have a better sense next month of how many students are struggling, when second-semester tuition bills come due.

Paola Aguilar, a sophomore at Shenandoah University in Winchester, Va., is worrying about whether she can afford to return next year.

“My mom became a Realtor last year to try to earn more money, but that didn’t help,” Ms. Aguilar said. “I’ve talked to the people here, and they’ve helped me out a little more for next semester, but as of right now, if I don’t get more help, I’ll have to leave next year and go somewhere cheaper, near home.”

Tracy Fitzsimmons, Shenandoah’s president, said she began hearing about students’ financial anxieties in mid-September.

“They’d tell me they were thinking they might have to move off campus next semester and stay three to a bedroom, or give up the meal plan and just eat one meal a day,” Ms. Fitzsimmons said.

Shenandoah has started an emergency grant fund for students, increased its loan program and prepared to stretch out spring tuition payments for hard-pressed families.

Economic uncertainty touches every facet of higher education.

“We are planning to begin a capital campaign of $150-185 million,” said Karen R. Lawrence, president of Sarah Lawrence College. “We will still do that. We’re not compromising our ambitions, but the timing will be a little bit deferred.”

At the wealthiest institutions, endowment revenue usually covers about a third of operating costs, and most colleges and universities spend a percentage of their endowment, based on its average value over the previous three years, helping to smooth out economic ups and downs.

In recent years, with tuition rising faster than inflation, college affordability has become a significant issue. And with the sharp growth of endowments in recent years — Harvard’s hit $36.9 billion this summer — some politicians, notably Senator Charles E. Grassley, Republican of Iowa, have pushed for a requirement that colleges spend 5 percent of their endowments. Many of the wealthiest institutions responded by expanding financial aid last year, with dozens of them replacing loans with grants.

This fall, more universities are taking steps to increase affordability. Benedictine University, a Roman Catholic institution in Illinois, is freezing tuition; Vanderbilt University will replace loans with grants; Boston University has expanded scholarships for students who graduated from Boston public schools; and the University of Toledo announced free tuition for needy, high-performing graduates of Ohio’s six largest public school systems.

Presidents of many expensive private colleges are wondering how much more tuition pressure families can bear.

“I wouldn’t deny that a tuition freeze has occurred to me, but we can’t afford heroic gestures,” said Sandy Ungar, president of Goucher College in Baltimore.

Given the current climate, some say, colleges need to re-examine all of their economic assumptions.

“Several years ago, we started thinking about sustainability in environmental terms,” said Dick Celeste, the president of Colorado College. “Now we need to be thinking about sustainability in economic terms.”

    Tough Times Strain Colleges Rich and Poor, NYT, 8.11.2008,






U.S. colleges

punished by financial crisis


Thu Oct 30, 2008
9:20am EDT
By Andrew Stern


CHICAGO (Reuters) - Higher education has been a growth industry in the United States, evidenced by swelling enrollments, expanding campuses and growing endowments. But the global economic crisis has caught colleges and universities in a vice.

With their endowments shrinking along with stock markets, some schools may raise tuition more than usual, even as students complain it is already too expensive and struggle to get loans.

"This will definitely test many schools," said Ronald Watts, the finance chief of Oberlin College, an elite private school in Ohio whose endowment of nearly $750 million has shrunk by about 15 percent in the past four months.

To be sure, schools have proven resilient in past recessions, helped by rising student enrollment as people seek a leg-up in a bleak job market.

"It's not going to be as drastic as what corporations are doing," Watts said. "You don't just eliminate people and lay off faculty and expect not to destroy your academic program."

Nevertheless, a few schools have already announced fresh tuition hikes, and school officials said they were keeping a close eye on their finances. And, with schools under financial pressure, local economies all over the country are likely to suffer.

Tuition increases have outpaced inflation for years. Tuition and fees at public universities have risen 175 percent since 1992, while the consumer price index rose 48 percent.

At the University of Wisconsin in Madison, the school's $1.8 billion endowment has shrunk by 18 percent since the start of the year, Sandy Wilcox of the University of Wisconsin Foundation said. Dipping into the endowment to make a promised contribution to the school's budget only shrinks it further.

Wisconsin, like many schools with substantial endowments -- 400 have endowments over $100 million and 76 above $1 billion -- use a three-year averaging system to smooth out how much they pay out from earnings.


The wealthiest schools have come to rely on endowments and there has been growing pressure from Congress to boost payouts, threatening to take away their nonprofit, tax-free status if they don't comply.

For most other schools, small endowments serve as a "rainy day fund" that can disappear quickly in tough times, said John Griswold of Commonfund, which manages money for nonprofits.

"Schools we're most concerned about are smaller, less well-endowed private colleges," said Roger Goodman, vice president at Moody's Investors Service, which assigns credit ratings to 500 schools. He said endowment balances have likely plummeted by 30 percent or more.

"You still need a college degree to be a full participant in the work force," he said. "What we may see is a shifting (of applicants) from the higher-priced, small, private colleges, to a lower-priced four-year university, and from the four-year universities to community colleges for a couple of years."

A survey of 2,500 prospective students by MeritAid.com found 57 percent were now considering less-expensive colleges due to the economic downturn.

Many prospective students encounter sticker shock when confronted by the $50,000 price tag at schools like Oberlin, Boston University and Bennington College in Vermont.

But financial aid and federal loans remain available, and families whose assets have declined qualify for more aid.

Boosting access to college is one plank of Democratic presidential hopeful Barack Obama's platform. This may add pressure on publicly-funded universities to boost enrollment, which has already climbed 10 percent since 2002.

Sticker prices at private colleges are usually much higher than pubic schools, but students rarely pay full price.

"Sometimes a small, liberal arts college will actually be better for a student and more affordable than in-state (public schools)," said Ken Himmelman, Bennington's dean of admissions.

Public universities, which educate roughly 75 percent of the 17.5 million U.S. students, are anticipating cuts in state appropriations, which cover a substantial chunk of their costs.

State tax receipts have declined due to the economic slowdown and the bursting of the housing bubble.

"They'll look to the university to cut. They don't want to cut prisons, or roads," Wisconsin's Wilcox said.


Massachusetts' public universities have cut budgets by 5 percent as their part in covering a state-wide shortfall.

Some public and private schools have declared hiring freezes and made efforts to reduce expenses because of shrunken endowments, and actual or expected declines in gifts and government support.

The state of Arizona cut its contribution to the state university system by 4 percent this year and 5 percent next year -- with another mid-year cut possible, Its more than 118,000 university students may have to absorb a tuition hike next year of 10 percent or more.

Hawaii lowered its contribution 2 percent, though enrollment rose 6 percent. Pennsylvania's public universities will raise tuition 4 percent next year ahead of state cuts.

California sliced 1 percent off its $3 billion contribution to universities but more cuts are expected as tax revenues lag projections. This spring, New York reduced its contribution and warned another 30 percent cut may be in the offing.

The bursting of the housing bubble has dried up home equity loans many families have used to pay tuition. And the stock market drop has shrunk some families' savings for education.

Often, much of the media's focus is on wealthy private schools with multibillion-dollar endowments like Harvard and Yale, which have promised to cover costs for many of those fortunate enough to gain admission.

But at less well-heeled private schools, which make up most of the United States' unrivaled roster of 4,300 nonprofit institutions of higher learning, significant tuition increases may be unavoidable.

"If history repeats itself, you're going to have falling state support on a per-student basis, rising enrollments, and probably rises in tuition," said Paul Lingenfelter, president of State Higher Education Executive Officers.

Some schools may try to wring more out of their campuses. Professors may have to teach more courses, schools may rent out underutilized campus buildings, or even sell dormitories to hoteliers and lease them back, suggested Richard Vedder, who heads the Center for College Affordability and Productivity.

"Schools normally rely on tuition increases" to offset falls in government and donor support, Vedder said. "But as economic conditions worsen, students are going to be resistant, plus there is political pressure not to raise tuition. In dollar terms, budgets may be equal to last year, and some may be forced into some sort of austerity mode."

    U.S. colleges punished by financial crisis, R, 30.10.2008,






Op-Ed Contributor

Ivy-League Letdown

January 22, 2008

The New York Times




LAST month, Harvard reached into its deep pockets — its endowment is $35 billion — and changed the way it calculates student financial aid. The aim, its press release says, is “to make Harvard College more affordable for families across the income spectrum.” Last week, Yale, whose $22.5 billion endowment is growing even faster than Harvard’s, followed suit. Yale’s president, Richard Levin, said he didn’t want students to have to choose “between Yale and Harvard based on cost.”

Who will benefit? Mostly the people Harvard calls “middle- and upper-middle income families,” by which it means those earning $120,000 to $180,000 each year. Yale stretches its new plan to include families earning $200,000. (The median family income in the United States is around $50,000.)

Next year, each of these institutions will add more than $20 million to what they now spend on financial aid, reducing the cost of a college year for families earning $180,000 to $18,000, from $30,000. That’s good news for students at Harvard or Yale. But it’s bad news for many hoping to attend other private four-year colleges — and for the nation in general.

The problem is that most colleges will feel compelled to follow Harvard and Yale’s lead in price-discounting. Yet few have enough money to give more aid to relatively wealthy students without taking it away from relatively poor ones.

Most colleges already tend to favor the affluent because their budgets require it. More than 90 percent of America’s private colleges have endowments less than 1 percent the size of Harvard’s. Giving an upper-middle-class applicant even a generous partial scholarship puts less strain on their budgets than giving a full scholarship to a student whose family can afford to pay nothing.

In 2004, Lawrence Summers, then Harvard’s president, pointed out that three-fourths of the students at selective colleges come from the top income quartile and only 9 percent from the bottom two quartiles combined. And as Donald Heller, a professor of education at Pennsylvania State University, has shown in a number of studies, colleges are increasingly awarding grant money in the form of so-called merit scholarships not based on financial need. More of this assistance is going to students in the top income quartile than to any other income group.

It is understandable that Harvard and Yale want to make themselves more affordable. But the way they’re going about it sets an example that is likely to make it even harder for low-income students to attend the best college for which they are qualified. Harvard’s stated motive is to stop prospective students from “voting with their feet” by choosing public universities or other private colleges. But surely this is not a very serious problem for a university that each year turns away hundreds of high school valedictorians and whose yield (the percentage of admitted applicants who enroll) is around 80 percent.

At Yale, Mr. Levin has acknowledged that another motive for the new policy is to blunt the growing pressure on wealthy universities to spend more income from their endowments. But is supporting upper-middle-class students the wisest way to dispense the additional money?

In fact, the new policy represents a step backward from the leadership that some elite colleges previously exerted. During the Summers presidency, Harvard focused on the problems of needy students by combining increased financial aid and recruitment in low-income areas, raising its percentage of students eligible for federal Pell grants to 11.9 percent in 2006, from 9.4 percent in 2004. Harvard demonstrated to other colleges that there is undiscovered talent in the two bottom income quartiles.

In a society that claims to believe in equal opportunity, our top universities should lead by example. The scandalous fact is that between 2004 and 2006 — an era of enormous private wealth accumulation — 27 of the 30 top-ranked American universities and 26 of the top 30 liberal arts colleges saw a decline in the percentage of low-income (Pell-grant-eligible) students. The problem Mr. Summers described is only growing worse. While some upper-middle-class families have to sacrifice in order to pay for college and may deserve more financial help, most of their children find a way to attend college. Low-income students earn bachelor’s degrees at less than one-third the rate of high-income students.

Only a few colleges can afford to make tuition affordable for both the poor and the affluent. For every college to become accessible to talented students regardless of income, the federal government must create enhanced grant programs, progressive tax incentives and programs that reduce the debt of graduates who spend time in public service. Otherwise, America will be the loser, no matter who wins the Harvard-Yale game.

Roger Lehecka, a former dean of students at Columbia,

consults for scholarship programs for needy students.

Andrew Delbanco is the director of American studies

at Columbia.

Ivy-League Letdown,










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