News Release
August 13, 2004
Lumina Foundation launches initiative on college affordability
Lumina Foundation for Education has launched an initiative to create a national dialogue on the rising cost of college, an issue that threatens to close the doors of college opportunity to thousands of prospective students across America.The initiative begins with the release of a policy brief, Collision Course: Rising college costs threaten America's future (PDF) and require shared solutions. The brief outlines the problem and identifies 33 potential strategies for addressing it. Along with the report, the Foundation has issued a "Call for Solutions," (PDF) asking informed observers for constructive, cost-effective solutions based on evidence and experience.
The Foundation, whose mission is focused solely on improving access to and success in postsecondary education, is reaching out to the best minds in the academy, policy research, government and education reform to join in a collaborative process to identify and implement workable solutions.
Statistics from a variety of sources paint a clear picture: College is expensive — and, because of several factors, it's becoming more expensive.
According to the College Board's Trends in College Pricing 2003, average tuition and fees, in constant dollars, have climbed 175 percent since 1980 (using weighted enrollment figures). In the last decade alone, average tuition and fees have grown by 47 percent. Median income for those families most likely to have college-age children has grown only a fraction of those amounts during the same time periods.
And some schools are projecting another increase for the coming year — an average of 10 percent — according to a recent survey by the National Association of State Universities and Land Grant Colleges (NASULGC).
Federal tax incentives and increases in grant aid being offered by states, colleges and universities, and other scholarship funds have helped offset some of the "sticker shock" of recent hikes, particularly for middle- and upper-income families. But for many Americans, price hikes are very real, and they're coming right out of already-stretched family resources.
"No issue is more important than the issue of affordability in keeping open the doors of college opportunity, particularly for students from families with modest means," said Martha D. Lamkin, president and CEO of Lumina Foundation. "Over the past several years, dramatic increases in college costs have raised the issue's importance and, left unchecked, threaten America's future."
According to the author of the report, Robert C. Dickeson, senior vice president for policy at Lumina Foundation, a combination of forces has created the problem: an increased demand for postsecondary education, diminished capacity at some of our nation's higher education institutions, state budget shortfalls and increased calls for accountability.
"The college cost issue is complex, with no single cause and no single solution," said Dickeson. "Solutions will require shared responsibility among all stakeholders: secondary and postsecondary institutions, state and federal governments, the private sector, and students and families."
While the report includes 33 potential strategies that stakeholder groups might consider in addressing the issue, these strategies are simply intended as a starting point for elevated discourse on this issue, according to Dickeson.
The best solutions will be those based on evidence and experience, and those that can be achieved cost effectively. Lumina Foundation will publish the best of the solutions and will support one or more national summits to encourage further thought and discussion among all stakeholders. The Foundation may also highlight best practices and consider supporting a test of promising ideas that flow from the debate.
More families at all income levels are borrowing — and borrowing more than ever — to pay for college. According to a report from the National Center for Education Statistics, 65 percent of graduates had federally subsidized student loans when they earned their four-year degrees in 2000. The average debt for these students was $19,300.
Also, because borrowing limits on low-interest federal loans haven't increased for a decade, more and more students and parents are turning to higher-interest private loans to cover the rising costs of college.
These rising costs hit poor families hardest. According to the College Board, the share of income required to cover the average cost at public four-year colleges for low-income families has leaped to 71 percent in 2003-04. For middle-income families, the share of family income required is 19 percent and for families in the highest income quintile the figure is 5 to 6 percent.
Data from the College Board also show that the purchasing power of Pell grants, the federal grant designed to aid low-income students, has declined significantly. Pell grants now cover less than half of the average tuition at four-year public institutions — down from 77 percent 20 years ago.
Finally, low-income families may not have enough income to qualify for federal tax breaks, and low-income students are less likely to benefit from merit-based aid programs.
So, while more affluent families can write the higher tuition checks, low-income families don't have that luxury. In a 2002 report, the Advisory Committee on Student Financial Assistance said that, by 2010, 4.4 million college-qualified low-income students will be unable to enroll in a four-year college; nearly half that number won't even be able to enroll in a two-year institution.
"That is a waste of human potential that this nation simply can't afford," said Lamkin. "We must work — and work together — to encourage qualified students by making college affordable."
"In the coming months, Lumina Foundation hopes to be a catalyst in bringing stakeholder groups together for civil discourse — to help forge shared solutions to the challenge of rising college costs," said Lamkin.
"We need such solutions, not merely to make tuition checks more manageable, but to make students' lives — and our nation's future — a lot brighter."
