Dreams detoured | When high college costs hit home, the pain is often palable (part 2)

For nearly a half-century, most Americans have taken something else for granted: They’ve shared the premise that anyone motivated to enroll in college should have the opportunity to do so. Yet very few Americans are able to shell out money upfront to pay for it. According to policy-makers and college administrators, today’s typical family is more likely to have an SUV in the driveway or a plasma-screen television in the living room than a single cent socked away in a college savings plan for their children.

At $150 a credit hour, Indiana University-Purdue University at Indianapolis (IUPUI) is considered a bargain for urban students seeking a quality, affordable education. Even so, a daily stream of students passes through the office of Barbara Browning, IUPUI’s director of student services, searching for the grant, the low-interest loan or any other means to help them stay in school. Browning has occupied that office for 11 years. Not once during that span can she recall meeting a student who had put away money for tuition and fees. “They haven’t even saved their book money,” she said.

Officials at Northern Iowa encounter the same phenomenon. “It’s almost to the point where families look at financial aid as an entitlement,” said Dennis Hendrickson, associate director of admissions at UNI. “The average family doesn’t save enough, and a lot of families don’t save anything at all. They look to the states and the federal government to bail them out.”

Students and families are exploring every avenue

When governments and institutions don’t follow through as expected, students and their families are forced to scramble to finance a college education. As the following stories from students Kristin Valentine, Harvey Brown and Laura Meyer demonstrate, there is no longer a clear formula for financing a college education. Rather, it’s whatever works.

Both of Kristin Valentine’s parents have college degrees, as do various aunts and cousins. Her brother, Todd Anthony, is enrolled at Indiana State University (an education temporarily suspended by U.S. Army Reserve duty in Texas). From the time she was old enough to remember, Kristin knew that her education would not end with a high school diploma. “I didn’t know you couldn’t go to college,” said Kristin, who graduated from Indianapolis’ Arsenal Technical High School in June with a 4.0 grade point average.

Like Ashley Stockdale in Iowa Falls, Iowa, Kristin selected a school during her sophomore year in high school. Kristin’s choice was Atlanta’s Spelman College. Small (2,100 students) and one of the nation’s more than 100 Historically Black Colleges and Universities, Spelman met all of Kristin’s criteria.

With a selection of a college easily settled, one major obstacle remained for Kristin: how she would pay for it. One thing was certain: The $24,000 for tuition, room, board and fees — in addition to an estimated $4,000 for books, transportation and other living expenses — would not be coming from her parents. Robert Valentine often works up to three jobs to support his family; and, as her daughter’s senior year began, Tamara Valentine faced the possibility of losing her job as a personnel administrator (she was laid off in March). “Let’s just say we’ve been through a bad financial time,” Mrs. Valentine said.

Kristin, a bright, articulate and motivated math and computer science major who seeks a career in actuarial science, knows what she wants and knows how to get it. In the Darwinian world of financing an education, that means working harder than the thousands of other kids looking for a way to pay for college. Kristin became, in the words of her high school guidance counselor, a “scholarship hustler.” By day she sifted through the various scholarship brochures and applications in the school’s guidance office; at night she combed the Internet.

“It was like a school assignment, Scholarship 101,” she said. Her intensity grew right along with the stakes. Some weeks she’d download or fill out five applications or more. Each was meticulously reviewed before submission. For those requiring an essay, Kristin would write a rough draft at night, have her mother or a friend edit it the following day and then rewrite the piece that night. Each had a common theme: “You have to say things from the heart, and you have to articulate very effectively,” she said.

Her mission tapped into what is arguably the most overlooked and underused sector of college financing: private scholarships. Jamie P. Merisotis, president of the Institute for Higher Education Policy, grew up poor. “I shook the trees to find money” for college, he recalled. Today, he can’t understand why more students aren’t doing the same thing Kristin has done.

The source of Merisotis’ concern is evident in a 2005 Institute report that found only 7 percent of undergraduates received private scholarship aid in 2003-04. The Private Scholarships Count study said between $3.1 and $3.3 billion in private grants was distributed in 2003-04, with the typical undergraduate receiving $1,982. The study estimated that as much as $100 million in scholarship money was left on the table, unclaimed by undergrads, graduate students and students at proprietary schools.

Merisotis said private scholarships are often a student’s third — and thus easily ignored — option after institution-generated financial aid and student loans. Moreover, there is a tendency to market private aid toward middle- and upper-middle-class students rather than the students most in need.

“The reality is that the majority of money is not targeted for students at the bottom end, which is another thing that distinguishes it from the government,” said Merisotis. “We make the point that, while a lot of the time scholarship programs are marketed as access programs, they are, in fact, often choice programs. They are not the difference between whether a student goes or doesn’t go to college — although there are some dramatic instances where that is true. More often it’s the difference between whether they’ll be going to a four-year or community college.”

In March, Kristin got her first passing grade in “Scholarship 101” — a $250 check from a scholarship established by the Harvard Black Law Students. Although not a significant sum, it was still enough to cover all but $50 of the Spelman housing deposit.

That first check kicked open an imaginary door. As her high school commencement approached, more and more money flowed through, $14,000 in scholarships and another $2,800 in Pell Grants. The totals ranged from $250 from the local chapter of a national sorority to the $2,500 per year promised Kristin by a scholarship fund set up by National Basketball Association star Dale Davis.

Unfortunately, the numbers didn’t add up. About $10,000 short of what she’ll need for books, transportation to and from Indianapolis and other expenses, she had no choice but to fill the gap with the “dreaded four-letter word.” To get through her first year at Spelman — and probably the three years that follow — Kristin will secure a loan.

Harvey Brown attended the same Indianapolis high school as Kristin Valentine — Arsenal Technical, or “Tech,” as the locals call it. He was advised by the same guidance counselor and harbored the same ambitions as his classmate. With a goal of becoming a doctor, Harvey set his sights on the college that sends more African-Americans to medical school than any other — Xavier University of Louisiana. By his own admission, Harvey’s early years in high school were less than stellar academically. In his junior year, he buckled down. His eventual grade-point average, 3.2, was good enough to gain acceptance to Xavier, but the financial aid package he was offered came nowhere near what he needed to attend school on the New Orleans campus.

Nearly $10,000 short of what was required to cover the cost of attending Xavier — approximately $20,000 a year, excluding transportation and other costs — Harvey began applying for scholarships. He received one from his church — a $5,000 grant spread over four years. The Dale Davis Foundation promised him another $1,125 per semester. After that, the well ran dry.

“Scholarships go to the smart kids,” he concluded, “and there’s not a lot of money left for us mediocre kids.”

At the end of May, as graduation approached, Harvey gave up on Xavier and submitted a late application to IUPUI, 10 minutes from his home. Slumped in a living room chair, the 6-foot, 4-inch college freshman said it all with his body language: IUPUI is not where he wanted to be this fall.

The scholarship money, coupled with a grant from the Twenty-first Century Scholars program (which benefits low-income Indiana students who remain in-state for their education), will pay all of IUPUI’s $7,000 annual tuition and fees not covered by the Pell Grant he hopes to receive. With an eye on medical school — and the expense he knows it will entail, Harvey is reluctant to secure loans for the first four years of college.

Two states west of where Kristin Valentine and Harvey Brown are taking divergent financial paths to college, Laura Meyer is attempting to get through school the old-fashioned way: by paying for it herself. Her penalty for making that attempt has been an undergraduate career far longer than she ever imagined when she got her high school diploma eight years ago.

By this time, Laura expected to be in the workforce or, at the very least, finishing up graduate school. Instead, she has two years remaining at the University of Northern Iowa. Her ultimate objective, to become a clinical psychologist, is constantly overshadowed by immediate financial considerations.

Laura’s postsecondary odyssey began in 1997 at the University of Dubuque, a private institution in her hometown. Determined to get through college without assistance, Laura requested that she be declared financially independent of her parents. The request was denied, forcing Laura to drop out of Dubuque at the end of her freshman year. “I liked the school. I liked everything about it. But I felt let down by the system,” she said.

Over the next five years, Laura traveled and worked at various jobs. When she had saved enough for tuition, she enrolled in the occasional community college class. In 2004, she landed at Northern Iowa determined to finish what she’d started seven years earlier. Her motivation was simple: “If you’re 24 without a college education, it’s hard to stay ahead of the game.”

Free and, at last, legally independent of her parents, Laura has financed her education with a Pell Grant, state tuition grants, loans that already have exceeded $15,000 and what amounts to a full-time job as a waitress and restaurant manager.

“If I didn’t have to worry about money, if I’d been lucky enough to have parents fund my education, I’d be done with school already,” she said. “My life would be different right now.” As it stands, money — or, more precisely, the lack of it — dominates every aspect of her college experience. Two years from graduation, Laura is already wondering how she’ll finance her postgraduate education. “I guess I should probably think about it more,” she said. “But right now I need to think about how I’m going to fix my car. It’s those little things that hit you when you’re 25 and not making your career money yet.”

Policy change is a vital piece of the affordability puzzle

Laura and most other students are focused on their own day-to-day financial realities. So it is left to higher education advocates, policy analysts, administrators and legislators to do the long-term thinking about the costs of higher education. In general, they are as uncertain about what lies ahead as Laura is about where she’ll come up with the money for car repairs. Postsecondary education is susceptible to the same cycles that drive every other segment of the economy, and no one can accurately predict where the cycle is headed next. One thing is likely, however, at least for the immediate future: The trend of reduced state appropriations seems destined to continue.

“For state policy in general, it isn’t easy today to make long-term decisions on anything,” said NCSL’s Julie Bell. “The demands of politics, the pressures, the compromises, the bargains, the constant changes in (legislative) membership with new folks always coming in — all of this has created the fractured, short-term decision-making process that you see everywhere.” Still, SHEEO’s Lingenfelter isn’t prepared to sound the death knell for state support of public colleges and universities. “It’s an exaggeration and a dangerously self-fulfilling prophecy to say that states are walking away from higher education,” he said.

George R. Boggs, president and CEO of the American Association of Community Colleges, is one of many voices that maintain higher education needs to strengthen the case for itself in Washington and n state capitals.

“We need to make a better case with state and federal policy-makers — primarily with state lawmakers because that’s where most of the funding comes from — that education is a societal benefit,” said Boggs. “If any one of us gets more education, then we all benefit from that, and we can see that as an investment.”

In looking for solutions, analysts warn institutions — and, especially, students — not to count on Washington to champion the cause of higher education anytime soon. The optimists say the Higher Education Reauthorization Act, mired in congressional committees for more than two years, will pass this year, in one form or another. Outside Congress, suffice it to say, there aren’t many optimists.

Even if it passes, however, the bill is not expected to significantly change the federal government’s role in or its contributions to higher education. “I don’t have any hope that reauthorization will do anything but stir up dust,” said the University of Virginia’s David Breneman.

Analysts expect the biggest dust storm to erupt from the $7 billion in mandatory cuts that Congress must make from the reauthorization bill. The money, they say, will almost surely be taken from the Stafford and Perkins student loan programs. The good news, said Kennedy staffer Jane Oates, is that the bill probably won’t reduce — and may even slightly increase — the caps on undergraduate loans, which now stand at $2,625 for the first year, $3,500 the second year and $5,500 for each of last two years of college.

Ultimately, analysts foresee public colleges and universities increasing the push for private fund-raising to counter reduced government contributions. Many are already doing so. “We are getting to the point where we are a private university on public ground,” said Northern Iowa’s Schellhardt.

The emerging privatization of public colleges and universities could drastically alter the standard economic formula for higher education. Though experts predict that privatization won’t significantly harm the more elite private schools, they say the impact on small, less well-endowed liberal arts colleges could be profound.

“My guess is that, because public colleges and universities have relatively low tuition, they will see surges in enrollment,” said Terry W. Hartle, senior vice president of the American Council on Education (ACE). “And high-quality, private and well-known private colleges and universities will continue to do very well because demand so dramatically outstrips the supply of available seats. It’s the small, non-selective private colleges that will be in trouble.”

Whether they take the privatization route or not, public colleges and universities cannot close the affordability gap on their own, said David A. Longanecker, executive director of the Western Interstate Commission for Higher Education. He says more states need to follow the example of Colorado and Illinois in introducing innovative programs to keep costs down. Colorado this year implemented a higher education voucher system that provides students attending state institutions up to $2,400 apiece.

Students enrolling in state colleges and universities in Illinois receive an automatic “Truth in Tuition” guarantee that freezes their tuition and fees for four years.Longanecker would like to see states go a step further and integrate their tuition-setting, appropriations and financial aid policies into one coordinated process. In many states that process is fragmented, he said, and decisions on financial aid are made far too late in the game.

“Financial aid is the poor stepchild of the budget process,” he said. “It’s all about guilt when it ought to be an integral part of the funding.”

As a leading authority on higher education policy, ACE’s Hartle is often summoned to provide perspective on issues in postsecondary education. In general, he likes what he sees. “If you were to go back and look at the 10 largest businesses in America in 1900, I don’t think you’d find too many that are still in business today,” he said. “If you were to look at the 10 largest colleges and universities in the U.S. in 1900, every one of them is still in business and, frankly, doing a hell of a lot better than they were in 1900. Everybody says that universities are badly run, that they don’t know what they’re doing. But they don’t close. They always manage to work their way through difficult times.”

Although the observation could certainly apply, Hartle wasn’t specifically addressing the rebirth of the University of Northern Iowa. The proof of higher education’s resiliency also resides in Harvey Brown, Ashley Stockdale, Brenda Liddle, Kristin Valentine and Laura Meyer. The system may not have met all of their expectations, but it didn’t fail them, either. All five are enrolled in college this fall.

Al Hays, director of the University of Northern Iowa’s graduate program in public policy, says higher education is justified in celebrating whatever success Ashley, Harvey, Brenda, Laura and Kristin achieve. At the same time, he says the system has an obligation to those who are less fortunate or less savvy — those who are unable to take advantage of community college, the wealth of private scholarships, burgeoning urban campuses such as IUPUI, and the network of available grants and loans that make college possible.

“It’s the students we don’t see who are most affected,” Hays said. “We know about the ones who have walked through the door. But what about those who don’t?”

Experts agree there are tens of thousands of such students each year — students who are qualified to attend college but are denied the opportunity because of cost. In fact, as far back as 2002, a report by the Advisory Committee on Student Financial Assistance estimated that more than 400,000 college-qualified students were unable to afford a four-year school, and nearly 170,000 were unable even to afford community college tuition.

As college costs continue to rise, so too must the number of students who fail to reach their educational potential. Each of them will be a casualty in a war this nation can’t afford to lose.