Making College Affordable SANDY BAUM THE URBAN INSTITUTE NCSL JUNE 2017
What is the price of college? Not just one year Sticker prices vs. net prices Tuition and fees? Books and supplies? Living expenses? Forgone wages?
Defining affordability No single measure such as annual tuition / median income Not just about how much money you have in your pocket Resources before, during, and after college A better question: Is it worth it? Urban Institute website: collegeaffordability.urban.org
Who will pay? Parents and students and/or Federal government: Pell Grants Loans State governments: Appropriations for public institutions Need- and merit-based aid Colleges and universities: Private sources General subsidies Need- and merit-based aid
Earnings distribution of full-time year-round workers age 35 to 44, by education level, 2015 SOURCE: The College Board, Education Pays 2016, Figure 2.3 For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
Breaking even after college $1,000,000 $800,000 $600,000 $400,000 $200,000 BA AA HS $0 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 -$200,000 Note: Assumes 5 years for BA, 3 years for AA; public or private nonprofit institution; average net price Source: Urban Institute, collegeaffordability.urban.org Age
Postsecondary enrollment rates of recent high school graduates by household income, 1985 to 2015 SOURCE: The College Board, Education Pays 2016, Figure 1.1 For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
Options A stronger economy: parental employment and incomes Tuition prices: institutional costs and state/local funding Net price (grant aid) Living expenses Variety of postsecondary options Time to completion
Policy directions Free community college? Covering student debt? Need-based grant aid Improving preparation for college
Free community college? Net tuition and fees by dependency status and family income, 2011-12 SOURCE: Trends in College Pricing 2015, Figure 14 For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
Average estimated full-time undergraduate budgets by sector, 2016-17 SOURCE: The College Board, Trends in College Pricing 2016, Figure 1 For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
Free community college? Completion rates: About 40% of students who enroll in community colleges complete any degree anywhere within years. Resources First dollar vs. last dollar
Student debt Paying off the debt for students Information about loans and repayment Supporting completion
Share of defaulters and 3-year federal student loan default rate, borrowers entering repayment in 2010-11, by loan balance SOURCE: The College Board, Trends in Student Aid 2016, Figure 12B For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
2-year federal student loan default rate, borrowers entering repayment in 2011-12 SOURCE: The College Board, Trends in Student Aid 2016, Figure 12A For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
Distribution of outstanding education debt by household income quartile, 2013 Note: Income quartiles are based on 2012 household income. The upper limits for the first three quartiles are $25,000, $48,000, and $90,000. Source: Baum et al., Trends in Student Aid 2015,The College Board, Figure 19A. Based on data from the Survey of Consumer Finances.
Need-based aid Lower tuition vs. merit award for all students. Grant aid a substitute for parental contributions Targeting limited funds Beyond Need and Merit, Brookings Institution 2012
State grant expenditures as a percentage of total state support for higher education, 2014-15 SOURCE: The College Board, Trends in Student Aid 2016, Figure 22B For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
Tuition prices and state grant aid $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Wyoming Florida Montana Utah New Mexico Nevada Idaho Alaska North Carolina Mississippi West Virginia New York Nebraska North Dakota Oklahoma South Dakota Arkansas Iowa Georgia Missouri Louisiana Kansas Wisconsin Indiana Washington California Maryland Tennessee Texas Nation Maine Oregon Kentucky Alabama Colorado Ohio Hawaii Minnesota Arizona Rhode Island Connecticut Delaware South Carolina Massachusetts Virginia Michigan Illinois New Jersey Pennsylvania Vermont New Hampshire 2016-17 In-State Tuition and Fees (000s) 2014-15 Grant Dollars / UG FTE Trends in College Pricing, 20126; NASSGAP 2016
State grant aid per full-time equivalent (FTE) undergraduate student, 2014-15 SOURCE: The College Board, Trends in Student Aid 2016, Figure 22A For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
Need-based state grant aid as a percentage of total undergraduate state grant, 2014-15 SOURCE: The College Board, Trends in Student Aid 2016, Figure 21B For detailed data, visit: trends.collegeboard.org. Trends in Student Aid 2016
Preparing for college Academic preparation Information about college, prices, financial aid, benefits of college Recognize social / cultural factors Context of pre-college inequality
Institutional resources vs. tuition prices It s not just the price. For students who do not complete, college frequently turns out not to have been affordable. Role of student support services Student services vs. prices (Deming 2017) Completion rates