Shrinking Financial Aid and College Admissions
http://thedianerehmshow.org/shows/2011-09-22/shrinking-financial-aid-and-college-admissions
Finding a way to pay for college is becoming harder at a time when earning a degree is essential to finding a good-paying job. Lower- and middle-class families are especially feeling the squeeze. The purchasing power of Pell grants is down and subsidies for student loans are being cut. Faced with decreased state funding and the pressure to raise their profiles, colleges are fundamentally changing their admissions processes. More enrollment officers say they are seeking out students who can foot the whole bill – some of whom have lower scores than needier applicants. Guest host, Steve Roberts and his guests discuss the implications of shrinking financial aid and college admissions.
Guests
Nina Marks
president of Collegiate Directions Inc.; principal of Marks Education.
Kim Clark
senior writer for "Money" magazine.
Brian Fitzgerald
CEO of Business Higher Education Forum
Victor Sanchez
president of U. S. Student Association. He is a recent graduate of the University of California, Santa Cruz.
Comments
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I would like to thank Monte for the prompt and accurate reference. To some extent
this reference addressed partly my request. I quote "Politifact further notes that
this level was for 2009 that the economy collapsed. It was only 40% in 2007 and for
2011 it is expected that 46.4%of households won’t have any income tax liability.
However, of this number, 28.3% will pay payroll taxes. Of the remaining 18.1% with
neither income nor payroll tax liability, 10.3% are elderly and 6.9% are not elderly
but have incomes lower than 20,000. In other words, all but a tiny sliver of Americans
without either income tax or payroll tax liability are either elderly or poor. Some
families who pay no federal income tax may be liable for state income taxes (and local
property taxes, sales taxes and the like)." It would be of interest to see the income
distribution of the 28.3% with no federal income tax but payroll tax. Are these really
milking the tax system?
Here is my take on fair taxation: Consider 2 families of 4 one with income 50k and the other with a million. Flat taxation will have the first pay 5k a year and the other 100k a year. In ten years, the net worth of the second will be approximately 10 million (depending on how well they leverage and invest their money) while that of the second possibly their furniture and the car they managed to pay-off, say 10,000. The federal government provides first of all security. Our soldiers are killed in Iraq-Afghanistan to secure the properties of both families. One pays 5,000 to secure property of 10,000 (a 50% premium of the value of insured property) while the other 100k to secure property of 10 million (1% premium). Similarly the services provided by the FCC, FAA, SEC for communication, transportation, investment (most government services) are taken advantage in proportion to total wealth rather than income. Using the condo analogy it appears fair that taxes be collected in proportion to total wealth (the way after all government funds were disbursed after 9/11). Progressive taxation, hence, should be viewed simply as a way to do so (rather than to redistribute income, class warfare etc). College financial aid is also another way of remedying this situation. The added benefit of an educated population is that, in the long run, it boosts all incomes. It is a pity to see that being reduced.
thefairtaxman: I agree. Well explained, and one certainly could go on. At its simplest and most obvious, wealth begets wealth (not to forget buys influence and facilitates gaming the system, in some cases immorally and/or illegally - and might land you in Buffett's shoes).
"The added benefit of an educated population is that, in the long run, it boosts all incomes. It is a pity to see that being reduced."
It is a shame to see these trends, and the human and economic potential wasted for lack of a basic opportunity. Like health care, it's civil and economic sense already in practice elsewhere.
Who needs education when you can have war and tax cuts!
Two things are wrong with higher education as a product and both involve structuring for lack of choice so that costs can be inflated to enhance institutional grosses.
1.Many times people want to acquire a specific knowledge or skill and are forced to enroll in a two or four year program when they could master the specific knowledge in as little as six weeks in an intensive participatory program. Part of the problem is the way certification and diploma earning are set up and part is because some vital knowledge is kept esoteric within a professional cadre.
2.What we call Liberal Arts has been gutted and replaced by Mickey Mouse vocational programs. For instance, college Economics has become a brainwashing program of curtailed content and radical right ideology that opposes any possibility of holistic community. Even when students do their little write-ups in Philosophy courses these days and earn an A in Ethics the syllabuses are so mundane and sterile that few critical thinking skills are gained. They do pick up vocabulary they misuse in a nihilistic and combative way to serve employers.
Besides the inflated costs and resultant debt load these are good reasons college is not worth the money or effort. When you add that there are few jobs for even the most narrowed and focused vocational grads you realize it is nothing but a gyp. I'd like to see more "open university" and on the job and radical activist education so people can get what they hunger for. They are not getting much from media or schools now. In fact, I think our educational system maims minds and leaves people repulsed by learning.
The damaged mind becomes addicted to entertainment while "Rome burns."
Even disaster is primarily for entertainment purposes now.
On Paul Krugman's blog of 21 Sep 2011 7:21 pm, there is current data from the Tax Policy Center regarding the distribution of average tax rates by income class. The distributions are given in percentiles and reflect income tax and pay roll deductions. You can access the blog at htt://krugman.blogs.nytimes.com
Our current congress forgets that the large cohort of babyboomers went to college because states had the money to support their colleges - and the federal government supported the landgrant universities. I read a few years ago that about 25% of the US population had at least a B.A. degree. Today, it is 30%, an improvement. However, the babyboomer cohort did not have to go into the level of debt that today's students find themselves in.
Out of the educated babyboomers came the engineers, scientists, philosophers, economists, theologians, etc. who enabled the US to be the leader in the world in creativity, production, and laws to create an enormous amount of wealth for corporations. The trajectory of poorly funded education for the middle and lower classes will take us out of a leadership role. The fact that the US is looking to change immigration law to allow foreign entreprenurial talent to start small business to stimulate job creation should be a clue of what has been happening to our poorly supported educational instituions for more than 2 decades. Creative genius/talent does not just come out of the wealthy class who can afford to educate their children - it comes out of a critical mass from all socioeconomic levels.
This class warfare nonsense is a tool of the democrats, the vilification of the so called rich in an effort to increase the size of government hurts everyone. Everyone is taxed too much at every level. Class warfare is simply a smoke screen to fool the people and hide the truth that government is wasteful and corrupt, if people would just focus in on it they would realize just how much of it they do not need or want. Warren Buffet and his friends are not helping anyone in their high minded efforts to tax the rich. In the end their billions will be just thrown away along with everyone else's money making the government even bigger and more demanding of everyone. These successful business men in every other aspect of their investment lives would recoil in disgust if corporations they invest in were run like the government is. I think this breed of ultra rich is suffering from quite simply a guilty conscience, they do not believe they deserve their fantastic wealth and this is their misguided way of giving it back. The electorate will not even take the time to honestly scrutinize the candidates they vote for, so of course they do not scrutinize government agencies that spend billions and never show any positive results.
If people could keep more of their money, the funding of a college education would not be so difficult. Does anyone ever consider that if there were not government subsidies for a college education that colleges an universities would be forced to lower their tuition!
monte-
The term class warfare was used exclusively by the Republicans until President Obama's response to their claim. Don't try to lay that on the Democrats.
Regarding university tuition, I don't see how reducing funding by governments could possibly lower tuition. Of course, if you want your children to be educated by those who can't get a job anywhere else, you could lower costs.
Good public schools deliver most bang for the buck, at least for in-state students.
Read more here on the return of investment:
http://brainmindinst.blogspot.com/2010/07/value-of-education-economicall...
OK, don't believe government subsidies increase cost. Check this out.
http://www.heritage.org/research/reports/2010/11/pell-grant-increase-wou...
Thank you, Steve. Excellent questions about real life issues families are facing.
accountant wrote:
monte-
"The term class warfare was used exclusively by the Republicans until President Obama's response to their claim. Don't try to lay that on the Democrats"
Please give me an example of republicans using class warfare as blatantly as democrats.
When my husband's IT position was eliminated when his job was sent off-shore, we had two children in college. Our son's college gave him very little financial aid while our daughter's college worked hard to help her with grants and even a zero percent loan if paid back within twelve months (this was when they realized that she needed 2 more courses to graduate). My husband and I could not afford to help our children as we needed all of our college and retirement savings to survive.
Our daughter finished college and our son left school for several years. After learning from a comparable top-ranked college program in a European country & finding the costs of tuition/room & board/and fees 75% less then in the US, our son elected to leave the US to finish his education. He is now fluent in a second language; meeting and learning about other cultures from an 'outsider' perspective; and networking with future leaders in his field.
My father grew up the youngest of five children during the 1920s and 1930s. His father left the family before he entered school and his mother worked three jobs to care for her children. Despite being poor, my father attended an affordable land grant college in the Southwest through a combination of affordable tuition and living & working on campus. After WWII he completed his college degree and a Doctorate with the GI Bill and his public employer paid for him to finish a Master's degree in a separate field. Because of affordable college and graduate school & outright grants by the government (GI Bill & Public Employer paying for his schooling in exchange for service), my father and this country gained from his education. My father and his colleagues were pioneers in developing the public health system in his state, the US and globally. His mind was not wasted because he could not afford to go to school. Our country is wasting our most precious assets, our people.
I really don’t want this to sound like class warfare but I believe there is plenty money available but it is being extracted from the economy by large banks and Wall Street. Dylan Radigan at MSNBC has been trying to get people to understand that nothing, including education in America, can survive let alone grow until this high-tech institutionalized theft is stopped.
I teach first year engineering students at the University of Virginia. We need to emphasize science and engineering skills in the secondary schools. Foreign students come here to study science and engineering, not the liberal arts. I come from a liberal arts background and it is a luxury to assume that a liberal arts background will ensure a job on graduation. Law schools and business schools continue to survive on the paradigm that their product is worth the investment - but it will remain the engineering and science disciplines that will propel the economy.
It will require the hottest magic from the second hour to excise Nina Marks' observation that students backed by an income of only $35K (more than the US average) are truly hopeless or college educator (and elite journalist)Steve Roberts misconception that the "poorest of the poor have it made in America."
There is the simpler truth that under raw capitalism that 90 to 95% of the population must live like farm animals so the rich elite and their selected retainers can flourish. That's the way it was 160 years ago. Only the intervention of popular will via government tempers this principle.
Beware college graduates in debt peonage who have not yet found a patron to serve: President Rick Perry will have you taken to a chamber where your mind will be repossessed if you don't pay up. Now that's T-party magic!
I appreciate the contribitors dicussing the UNDER funding of Community College.
My roommate is in her 40's and trying to go back to school for a mid life career change in Dallas. After waiting for months for financial aid and having the date of her distribution changed three times the college disenrolled her from classes due to non-payment.
She was able to get different classes, but I had to borrow money from my 401k plan as a loan to get her books and her tuition paid for. Now it's three weeks in to classes and she still hasn't heard from the Finanical Aid office.
It wasn't like this when I was attending a private undergrad college in the late 80's or grad school in the early 90's.
I think the real question is why the cost of tuition is so high? Instead of looking for ways to pour more money into universities, someone should look at the real problem. Why it increased so much in the last 10 years? Is the amount paid in tuition goes directly towards better education or to research, salaries (GWU president making >$1M, >100% increase from predecessor) and other PR programs that make the university look good without increasing the quality of education??
The rate of inflation of higher education has outpaced inflation in general and this has added to the financial burden faced by all students. I would hazard a guess that the use of money for building, sports and non-education related expenses have driven up the tuition costs. This coupled with a lack of pressure to reduce costs has allowed this crisis to build. The availability of larger and larger amounts of cash through grants and loans made to students allows the universities to increase tuition and housing costs.
Would leveling off any increases in the availability of money for grants and loans force the universities to "live within their means" and slow the outrageous rate of inflation?
I disagree with the speaker who said Community Colleges are a great opportunity. My CC is of low quality, has lost accreditations and has teachers that just see it as a easy paycheck. As a state institution, it has suffered the same legarthy many automatically funded institutions have and I am so tired of hearing that private institutions abuse federal funding, it is the CC's and the state colleges, etc. that are protected, that have. I would love to be able to afford a real education at a private school. As I live in poverty, I can not afford to finish my CC degree, what is more it isn't even worth pursuing because of the poor quality of education. These schools push out degrees that aren't even needed, the market is flooded with already. It is a waste to fund them. Beyond this right now there are NO JOBS. Why educate people that WILL NOT HAVE JOB OPPORTUNITIES ??? Nothing but money making machines that don't serve the students....
Please speak about whole families attending college--last year 3 out of 5 of our family was in a degree program, breadwinner was unemployed. Lots of student loans as one son had already graduated college and we had a PLUS loan there (expecting income to have stayed same).
Grad school costs are not accounted for on FAFSA, impairing our ability to show expenses.
Another irony: WE can co-sign for a student loan for our youngest son, but we ca take out a PLUS loan due to "good credit history'. Ridiculous!
Univ of NH just lost 45% of it's funding last year. My son is in state system.
As a community college trustee at a great college in MI, I believe that a few things can be done for students. In MI we are working hard on making college credits transferable to 4 years. The Cherry Commission Report was a great resource for us to begin this work. We have made agreements with universities for 2 + 2 and 3+1 programs so the transition is much easier. In many programs of study students can get an associates degree and their bachelors degrees in a short time.
The other issue you need to remember is that community colleges accept almost all students. We are unable to pick the cream of the crop. We take all students and try to make college graduates out of them. We issue many certificates of study for those seeking specialized training. We have early/middle college and take students that are identified as probable drop outs and get them thru high school and their associates degree. Community Colleges have a great place that offer great affordable educations.
College is not the only option for career and income advancement. What about vocational schools? There are many technical positions which are unfilled due to the lack of technical training provided by vocational schools including informational technology, manufacturing and engineering. There is an opportunity for vocational schools to partner with two year schools to provide students with training for highly demanded courses with lucrative income.
Correction: we CANNOT cosign for our son's private loan but we CAN take out a Parent Plus loan. That is the irony. WE add to our debt--?
We sent 5 children to 4 year schools and grad school with financial aid playing a major role. All have gone on to become good wage earners ( making at least $60,000). They contribute greatly to our country's economic base.
Giving them loans and grants retroactively, after they earn their degrees wouldn't have helped our children much. We would not have been able to pay for college tuition up front as we made $40,000.
What will our children do when their children need to attend college?
Doesn't our nation understand this? We can shell out Trillions for war but little for education.
While students struggle to find a way to pay for a college education and faculty members accept pay cuts to keep the doors open, no one talks about the salaries paid to the college president. I live in Ohio and our local paper recently published the salary and benefits paid to Gordon Gee at OSU. It exceeds one million and tops the salary paid to the President of the United States. Couple that with what they pay to the football coach and it's no wonder the students are bearing higher burdens.
To the speakers..one of the biggest mistakes we make is giving hb1s. There are not enough jobs here for our own citizens. Job creation first, supporting a crippled education system second; priorities. Any other agenda shows an alternative agenda that does not take care of American Citizens First.
riga: If you are recommending our mostly fraudulent proprietary vocational and technical colleges you are sadly ill-informed.
I am always interested in conversations about the 'college experience'. I could not afford to go to any type of college today but I don't think that going to college means you have to go away, live in a dorm and have your parents pay/borrow 20K or more a year for school. Since I received my GED & did not have family financial support I went to Junior College (now called community college) back in the late 70s on PELL grants and worked full time all the way through college. I made damn sure that every course I took would transfer to the college I would attend for Junior/Senior year. It took me 7 years to get my AA in Biology and then BA Chemistry. I only borrowed 2500 all the way through but tuition was MUCH lower MUCH lower and PELL grants and a small scholarship covered most of tuition and books. Looking at income and cost of college today there is no way I could afford to go to college. It is really very sad state of affairs. I beleive community colleges are essential and I think they are a better environment than many 4 years schools with respect to students who are focused on their goals.
As for student loans, I returned to school to work on my Ph.D. in Biochemistry and while I received a stipend I borrowed too much money on student loans and am now saddled with a large loan payment which I am happy to pay but if I had to do it over I would have not borrowed nearly as much. No degree is guarantee for big income - particularly in science.
As to amenities, we should not base our college choice on superficial impressions. Superb recreational facilities, student life centers and posh commons accommodation are irrelevant to outcome. The quality of teaching does not depend on the student teacher ratio alone. The best teachers in history are neither remembered for the size of their paychecks, nor the square footage of their classrooms, nor the splendid architecture of the buildings in which they were lecturing. They are remembered for what they taught. Success, however, depends on the student as much as on the teacher. The prospective student must find the school that may help her/him best to develop the path they wish to pursue.
Read more here on the value of education:
http://brainmindinst.blogspot.com/2008/01/on-value-of-education.html