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Tuesday, April 9, 2013
“There is no doubt that college has become too expensive, and it shows no signs of getting cheaper anytime soon,” according to Sen. Mike Enzi, R-Wyo.
“College has increasingly become out of reach for lower income and working families as a result of increasing costs,” Sen. Tom Harkin, D-Iowa, said during a Senate hearing last year.
College affordability and access to higher education is an issue on which both Republicans and Democrats have reached an agreement.
The senators both make powerful statements that not only address a national concern but a growing concern here in Virginia and the New River Valley. Increases in college costs are threatening access to public higher education.
Public higher education operates on the premise that the state should invest money in colleges and universities to aid in lowering the costs of attendance. The rationale for doing this is to serve both a normative and a positivist (economic) end.
Increasing access to higher education for members of the public generates societal benefits — in the form of functioning, productive members of society — that are greater than the costs.
A well-educated society is more productive and prosperous.
Increasing costs correlated with increased borrowing and higher debt shares among those who attend college are generating a threat to publicly held values.
The number of students relying on loans, and the dollar amount of loans being borrowed, has a correlation when examining the costs of attendance among Virginia’s higher education institutions.
Groups below the median household income level have seen large rates of change in total enrollments in higher education despite the fact that their income earnings have remained relatively stagnant over the years.
Low-income students’ enrollments are up, so they must be able to afford the increasing costs of higher education through financial aid and grant monies, right?
Unfortunately, loans have continually made up more than 50 percent of total financial aid for in-state students at four-year institutions from 2006 through 2011.
The greatest increases in enrollment have occurred among the lowest-income groups over the 2006-11 period; income groups that fall below the median household income threshold not only make up the majority share of the total enrollment, but account for the greatest percentage increase in enrollment at Virginia’s public higher education institutions.
Lower-income groups are disproportionately affected by changes in costs.
When costs of attendance increase, it seems to have a more significant impact on those lower-income groups. Each (below median household income) group has experienced a larger proportional share of their income being consumed when taking into account not only the costs of attendance, but also borrowing costs each year.
A Moody’s Investors Service report this year states that a tipping point has arrived. The ability of colleges to continue to finance growth through increasing dependence and reliance on tuition and fees has reached its limit.
“The rising burden of loans on students and increase in student loan defaults is ... leading more people to question the value of a college degree ... [U]niversities that serve low-income populations have very high default rates,” the report stated.
So while the value of a degree has been unquestionably marketed as providing benefit (in the long term), the biggest hurdle that many students and families are facing in Virginia is access and affordability.
A four-year degree may provide tremendous benefit once it is attained, but particular segments of our population are facing a more difficult path in attaining that coveted degree despite the publicly held values in regard to public higher education.
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