There is wide bipartisan agreement that the skyrocketing cost of a higher education has grown far too high. New York Gov. Andrew Cuomo and President Donald Trump have each proposed major steps forward, but more is needed.
Cuomo recently advanced a proposal to make tuition at public colleges and universities in New York free for students with family incomes of less than $125,000 a year. While this is certainly a plus, it doesn’t solve the problem of students needing money for fees, books, and room and board. At State University of New York campuses, tuition is only about a third of the cost of attendance for students living away from home.
According to the College Board, before financial aid is awarded, the average annual cost for tuition, fees and room and board around the nation at a public four-year college for an in-state student was close to $20,000 in the 2015-16 school year. At nonprofit private schools, the average cost was almost $44,000.
In another move to help students deal with the high costs of college, Trump advanced his own plan in October: “Students should not be asked to pay more on their loans than they can afford,” Trump said. “The debt should not be an albatross around their necks for the rest of their lives.”
Trump proposed that for borrowers who have stayed current on their debt, their student loan balance should be forgiven after 15 years and there should be a 12.5 percent cap on the amount of a graduate’s income that would go to servicing student loans. With his goal of privatizing these loans, the subsidies would have to be substantial.
Some 42 million Americans now owe $1.3 trillion in student loan debt. The average student debt at college graduation grew from $10,000 in 1993 to more than $35,000 in 2016. Some students owe tens of thousands of dollars more. It is no wonder that students are increasingly making decisions on where to enroll not on the basis of the best academic fit but on the basis of affordability.
An important additional step Trump could take that is consistent with his goal of making college more affordable would be to increase federal Pell Grants for students with the greatest financial need. These grants went to 8.2 million students in the 2014-15 academic year, amounting to more than 40 percent of the nation’s undergraduates. Most recipients come from families with annual incomes below $40,000.
A big plus of Pell Grants is that they go to students with financial need regardless of where they go to college. The Cuomo plan – like free-tuition plans advocated by Hillary Clinton and Bernie Sanders during their presidential campaigns – only applies to public colleges and universities. Yet many students enrolled in private institutions of higher education need and deserve government financial aid as well.
When compared to public institutions, the nearly 1,800 private nonprofit colleges and universities in our nation – serving more than 5 million students – have higher overall graduation rates, smaller class sizes, and tend to have more programs to help low-income, first-generation and minority students graduate. If we are to expand the number of people graduating from college, we need to help more students with financial need attend these schools.
The maximum Pell Grant today is $5,815 annually for a low-income college student. But while the maximum grant provided about 80 percent of the total cost of attending a four-year public college (including room and board) in the 1970s when the program began, the grant now covers just 30 percent of the total cost at a public college and 17 percent at a private school on average.
A Pell Institute for the Study of Opportunity in Higher Education study has proposed increasing the maximum Pell Grant to $13,557 a year, with half the funds coming from the federal government and half from the states. Nearly doubling that amount, to roughly $25,000, would bring the percentage of college costs back to where it was when the program started. Particularly for outstanding low-income students, this could be of enormous importance.
This investment in America’s future would not go to waste. A 1988 report by a congressional subcommittee found that every $1 in federal assistance used to pay for World War II veterans to go to college under the GI Bill generated at least $6.90 in increased tax revenue and economic growth for our nation just by 1952. That’s the kind of return any business person would crave.
At a time when manual labor jobs are being eliminated by automation or shipped to low-wage countries abroad, a college degree has become the admission ticket to a good job and the middle class. Increasing Pell Grants dramatically and enacting both the Trump and Cuomo plans would give many more students that ticket to financial success.
Follow Harold O. Levy on Twitter: www.twitter.com/TheJKCF
Former New York City Schools Chancellor Harold O. Levy is executive director of the Jack Kent Cooke Foundation, which has awarded more than $152 million in scholarships to nearly 2,200 high-achieving students from low-income families and more than $90 million in grants to organizations that serve such students.
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