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Report: Affordable Higher Education
Recommendations for Reauthorization of the Higher Education Act
Since its passage in 1965, the Higher Education Act has helped millions of individuals pursue dreams of a higher education. Without the HEA's well-structured federal financial programs, many qualified students in this country would be unable to afford the costs of college. The dividends of this federal investment are clear: in the national economy, in the health of our democracy, and in the individual liberty our country's citizens possess.
However, for many students, unacceptable barriers still exist as they pursue the dream of a college education. Students are now borrowing and working more than ever before in order to pay for the costs of a higher education. Without adequate financial assistance to help cover the price of higher education, too many individuals are faced with the difficult decision of not going to college at all, or of taking on excessive debt and working long hours in order to afford a college degree.
Making college more affordable for students depends on two solutions: (1) greater investment in existing federal need-based grant programs on the front end of students' college careers, and (2) policy that offsets some of the cost of student borrowing on the back end.
This first solution, of increasing grant aid, is the most fundamental improvement that Congress can make in its changes to the HEA. To a large degree, increased financial support to the Pell Grant program and other federal grant programs would ensure increased access to higher education for students without requiring individuals to borrow heavily or work long hours.
The second underlying solution to making college more affordable, better student borrowing policy, supplements the first solution and acknowledges the responsibility that students and families have in sharing part of college costs. Student loans play an important role in helping many individuals to finance their college education. However, as part of the goal of affordable higher education, Congress has a responsibility to ensure that students do not leave school with unmanageable student loan debt.
To help relieve debt burden, Congress should take steps to make loan repayment more affordable for students. The bulk of most students' financial aid packages are loans. By ensuring that interest rates on student loans are kept low, and that students have the opportunity to take advantage of tax incentives and flexible payment plans, Congress will provide debt relief to the millions of students who borrowed in order to afford their college education.
By addressing each of these solutions in the upcoming Reauthorization of the HEA, Congress will help to ensure that even greater numbers of students graduate with college degrees and pursue their dreams. However, without these changes, the problems that stem from a lack of affordable higher education, as discussed in greater detail below, will continue to burden students and deprive this country of some of its greatest talents.
There is an increasing gap between the resources that students receive to finance their college education and the actual costs of that education. Even with parental assistance, grants, work-study, and loans, the average low-income student faces unmet need totaling $3,800 for one year at a four-year public institution. This gap likely discourages some low-income students from attaining a higher education, which explains why, even among highly qualified high school graduates, only 47 percent of students with high unmet need attend college, as opposed to 67 percent of those students with low unmet need.
Excessive In-School Work
Bridging the gap of unmet need often requires students to work excessive hours while enrolled in school, which can detract from a student's educational experience and harm their academic performance. Nearly three quarters of all full-time students now work while attending school, and of these individuals, 46 percent worked 25 hours or more each week, according to data from the 1999-2000 National Postsecondary Student Aid Survey (NPSAS) analyzed in At What Cost?, a report released by the state PIRGs in April 2002. Without working such long hours, many of these students would likely have lacked the financial resources necessary to attain a higher education.
Burdensome Student Debt
Beyond forcing many students to make a difficult choice between forgoing college altogether, or working excessively in order to afford higher education, unmet need also contributes to a second significant problem: unmanageable student debt. To bridge the gap between tuition costs and available resources, 65 percent of students now borrow federal education loans to finance their college career. The average student graduates with nearly $17,000 student loan debt, and student loan debt for Pell recipients, who represent the lowest income sectors of students, are even higher, nearly $20,000 on average, according to The Burden of Borrowing, a state PIRGs' report.
Student loans and in-school employment are key resources for students to help them cover college costs. However, too many students borrow and/or work excessively, which all too often detracts from students' academics, as well as community and leadership participation while they are in school. The experience of a college education extends beyond the doors of the classroom, yet students who work long hours each week cannot take advantage of these opportunities. For students who borrow, heavy student debt can mean struggling to make monthly repayments, and possibly entering into default on those loans.
Unmet need and increasingly high debt levels signal that college is neither affordable for students while they attend school, nor even after they graduate from school, when large numbers of students can spend in excess of twenty years repaying loans taken to pay for their higher education degree.
Therefore, the state PIRGs have approached proposals for Reauthorization of the HEA from this two-point perspective of making college affordable for students: our first series of policy proposals seek to assist students while they are in school, while our second series of proposals intend to deal with the problems too many student borrowers face after they leave school. In addition, we have included a section on the importance of strengthening consumer rights for students, as students are too often the prey of an aggressive and complex marketplace.
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