Earlier this year, President Obama called on colleges to return America to the world leader in graduate rates, an increase from our current position as 12th.
Recently, the White House hosted a high-profile summit to explore how community colleges can prepare graduates for the 21st century workforce even better and be a main driver in hitting graduation rate goals. The summit focused on improving the success rate of students, including the current 50% drop out rate. Many long-term issues need to be addressed, but Congress can act quickly to reduce dropout rates in the short-term with three simple initiatives to make two-year programs more affordable.
While community colleges have relatively low tuition, associated costs such as transportation, textbooks and housing add up quickly. Taken together, these expenses can act as a significant barrier to students juggling tight budgets, multiple jobs and outside responsibilities leading to higher dropout rates. Easing the overall financial burden that students face at community colleges will give students more breathing room for personal and family costs, allow them to work less hours and study more, and ultimately provide them with a better chance of reaching graduation.
First, textbook prices have spiraled out of control. Students spend an average of $900 per year for books, and prices have been rising more than four times the rate of inflation. According to the GAO, textbooks are comparable to 72% of tuition for the average community college student. Skyrocketing prices are a consequence of a marketplace where only a few publishers exist and students have no purchasing power. Congress took an important first step with a provision in the Higher Education Opportunity Act requiring publishers to disclose their prices to faculty. Their next step should be to create a competitive grant program to fuel the growth of more affordable options like open-textbooks, which are high-quality college textbooks offered online under a license that allows free digital access and low-cost print options. Open textbooks can reduce costs by 80%, according to a recent PIRG study, which could save students hundreds per year while also creating competition and choice in the textbook market.
Second, stabilizing and increasing federal aid to students will also help keep folks in school. The landmark student aid bill passed earlier this Fall made a $36 billion investment to the Pell grant program. However, the program is straining with increased demand from students turning to community colleges during the current economic climate. Congress should fill in the over $5.5 billion Pell grant shortfall before the next session.
Finally, Congress should fix and extend the American Opportunity Tax Credit beyond 2010. The current tax credit covers up to $2,500 in tuition, fees, and for the first time textbooks and supplies for over 8 million students and their families. However, Pell grants are first applied to these specific expenses, which can eliminate a student's eligibility to the tax credit even if there is an additional unmet financial need. An estimated 1 million Pell grant recipients with additional financial need will not receive any benefit from this tax credit. The vast majority of students affected attend community college. Congress can enact legislation, such as pending reform measures from Representative Danny Davis of Illinois, that will make grant aid first apply to expenses not covered under the tax credit when calculating eligibility. Both fixing and extending the American Opportunity Tax Credit beyond 2010 will provide needed resources to help students stay in school.