This week, you've heard from students and graduates with debt far beyond the average amounts. How far beyond? According to The Project on Student Debt, in 2008, a whopping 67% of graduating students at four-year colleges had debt: averaging $20,000 at public colleges, and nearly $28,000 at private schools.
Their stories aren't outliers. Higher education experts agree that reform is badly needed and solutions too often don't provide as much help as they could. State budget cuts, runaway building programs, top-heavy administrations and ever-expanding academic choices have all played a roll in runaway costs.
A combination of weak legislature, state budget cuts and student service expansion has pushed college tuition -- public and private -- nearly out of reach. Today, we grade the various parties and participants based on our reporting to show what's being done and what needs to be improved.
WHO'S FAILING AND FLAILING
Private Loan Institutions: D. Private loans are still the riskiest bet for students and lack the same protections federal student loans carry, including loan deferment, forgiveness, bankruptcy and flexible repayment programs. "[Students] tend to underestimate their eligibility for aid and also discount the benefits of federal student loans. [Students] think, 'Well all I'm going to get is loans anyway, I won't bother,' but ... they're leaving themselves without the safest option for borrowing if that's how they need to pay for college," says Laura Asher, president of The Institute for College Access and Success.
State legislatures: C-. Across the nation, state legislatures have been willing to cut broadly and deeply into higher education budgets, since universities can always (in theory) raise tuition to make up the difference. But this approach is too heavy-handed and does great harm beyond simply forcing students to take out more loans: Staff and sometimes professors lose their jobs; classes and occasionally entire departments get axed; universities end up with debt they can't pay off; and the quality of education suffers.
Top-heavy administrations: F. School bureaucracies grow with new academic programs and departments, each of which needs support staff and mid-level managers to help things run. But over time, administrative offices sap school funding and don't always directly benefit students. "What I haven't seen is substantial changes in the administrative works" as state schools have cut their budgets, says think tank president David Longanecker. "We still pay our presidents an awful lot of money, and we still give them an awful lot of staff." What do these staff members do, exactly? Well, they don't teach classes, for starters. And in many cases, they simply create unneeded redundancy: Loyola University Chicago's new School of Communication, for example, hired a Student Media Manager in 2009 at $80,000-plus a year to oversee other faculty advisers running student publications and the radio station. That's right: An adviser for all the advisers. "I saw [him] often getting coffee for various staff members," one Loyola communications student told Money College. "I still have no idea exactly what he was there to do."
REMEDIAL ACTION REQUIRED
Student Aid and Fiscal Responsibility Act (SAFRA): C+. The law raises need-based Pell Grants incrementally, but won't do much to help students currently in college or recent grads. SAFRA falls short when providing financial support to students that are already in college, says Dr. Andrew Nichols a senior research analyst at The Pell Institute."The challenge is once [students] get to college, how do they stay there?" Nichols says that the Department of Education needs to look into more initiatives to help these students, who might become so indebted while in college that they are forced to drop out. "They might not be able to get returns on their own personal investment ... then who really wins are institutions," he said.
Free Application for Federal Student Aid (FAFSA): B-. It is important for students to know that the FAFSA is still one of the best ways to get financial help for college. "The FAFSA is the gateway for state, federal and college aid," says Asher. The federal government has simplified the FAFSA process by reducing the amount of questions and allowing students applying for aid this year to have their FAFSA pre-filled out with their tax data. Asher hopes these steps will help the 2.3 million Pell Grant eligible students in the country who have not applied for aid to reconsider.
Pell Grants: C+. Chances are Sen. Clairborne Pell, who passed away in 2009, hasn't stopped rolling over in his grave over what's happened to his pioneering program. With the new maximum for Pell Grants at $5,550 and the maximum independent student loan at $9,500, lower income students still have much more in loans than grants. According to The Project on Student Debt, 87 percent of Pell Grant recipients had taken out loans. "Having a Pell Grant that's over $10,000 will mean that the students will not need to borrow to pay for their education," FinAid.org founder Mark Kantrowitz says.
TOP OF THE CLASS
No-loan policies: A-. The 70-odd colleges and universities that are replacing loans with grants for low- and middle-income students are making some of the single biggest differences in lowing debt for their students. It's "absolutely" the best way for private colleges to help low income students, says Asher. "Having to borrow can be a disincentive, and particularly concerns about having to borrow a lot are pretty well grounded," she says, "We don't want people borrowing more than they need to." Students such as Jorge Alvarado in part III of this series will graduate with little or no debt because of these programs.
Replacing staff with technology: A-. More colleges, public and private, should take a cue from Metropolitan State College of Denver, which is making a raft of hardware and software changes to help it save money. Yes, that means some people will lose their jobs as a result, and that makes efforts like this unpopular. But Metro State is also one of few universities taking concrete and substantial steps to cut back its costs. At too many institutions, growing numbers of staff and administrators are adding costs while providing students with little in the way of direct benefits.
High school counseling for college enrollment and aid: B. In 2006, the Chicago Public Schools decided to put the names of students who had not completed the FAFSA form directly into the hands of high school counselors, something no one had ever done. In 2007, just 64 percent of students completed the aid form. By last year, that number shot up to 81 percent and could go higher this year, says Gred Darnieder, who made the change while working in the Chicago Public Schools and now works on similar issues at the U.S. Department of Education. That's important because there's a direct link between completing the FAFSA and increasing college enrollment, he says.
As our week of stories draws to an end--look for two features to close out the Tuition Ignition series this weekend--the story does not end here. Share with us your episodes of struggle and triumph in paying for college, managing loans, and making the financial end of higher ed work for you--even if and when you felt like quitting. Address your letters to MoneyCollege@WalletPop.com.