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Intro Financial Barriers to Higher Education In the United States: 1980 to Present European Access Network University of Zagreb Zagreb, Croatia June 27, 2012 Tom Mortenson Senior Scholar, The Pell Institute for the Study of Opportunity in Higher Education Higher Education Policy Analyst, Postsecondary Education OPPORTUNITY Financial Barriers to Higher Education In the United States • • • • Identification of financial barriers Measurement of financial barriers Consequences of financial barriers Proposals to address financial barriers Identification of financial barriers: • Direct costs • Tuition and fees • Books and supplies • Indirect costs • Room and board • Transportation • Personal and medical • Opportunity costs • Foregone income National Average Direct and Indirect Costs (2011-12 academic year) • • • • Public 2-year (commuter): $15,286 Public 4-year (resident): $21,447 Public 4-year (nonresident): $33,973 Private 4-year: $42,224 Source: The College Board Measuring Financial Need Direct + indirect costs of college attendance Less: Expected family contribution Equals: Financial need Expected family contribution: • Total income and assets • Offset by standard maintenance allowance • Controls for: family size, number in college, age of oldest parent, etc. Financial need is met through financial aid: • • • • Grants, scholarships, waivers/discounts Education loans, repaid from earnings from future employment Earnings from current employment Other sources Financial Barriers to Higher Education In the United States • • • • Identification of financial barriers Measurement of financial barriers Consequences of financial barriers Proposals to address financial barriers Policy Eras in the United States 1862 to 1980: The Progressive Policy Era: • Morrill Land Grant Act created state universities • Teachers colleges for universal K-12 education • Community colleges • Need-based financial aid for students • GI Bill for returning World War II military veterans • Supportive services for students 1980 to Present: The Regressive Policy Era: • Federal shift from grants to loans, abandon needs-test • State reduction in higher education investment efforts • State shift from need-based grants to merit scholarships • Universities and colleges lust for prestige and revenue Mean Student Work/Loan Burden in Private 4-Yr Mean Student Work/Loan Burden Parents Income-Inst Control & Level Mean Net Price to Family by Parents Income Quartiles Mean Net Price to Family in Public 4-Yr by Parents Income quartiles Mean Net Price to Family in Public 2-Yr Inst by Parents Income Quartiles Mean Net Price to Family in Private 4-Yr Inst by Parents Income quartiles Mean Net Price Family by Parents Income Inst Control & Level for Bottom 2 Parental inc Mean Net Price to Family as % of Parents Income Mean Net Price to Family as % of Parents Income in Public 4-yr inst by parents income quartiles Mean Net Price to Family as a % of parents inc in Public 2-yr Inst by parents income quartiles Mean Net Price to Family as % Parents income in Private 4-yr Inst Parents income quartiles Mean Net Price to Family % of Parents Income by Parents Income & Inst control & level Financial Barriers to Higher Education In the United States • • • • Identification of financial barriers Measurement of financial barriers Consequences of financial barriers Proposals to address financial barriers Change in Estimated Bachelor’s Degree Attain rate by Age 24 Family Income Quartile HS Grad Rates by Family Income Quartiles 18 to 24 yr olds Change in HS Grad Rate by Income Quartile College Continuation Rates by Family Income Quartiles Change in College Continuation Rate by Income Quartile Estimated Bach Degree Completion age 24, FamilyInc Quartile, dependent Change in Estimated Completion rate by Income quartile Low Income Student Shares of Totals Tertiary Type-A Degree Attain 25-34 yr olds OECD 2003 Tertiary Type-A Degree Attain 25-34 OECD 2009 Change in Tertiary Type-A Degree Attain 25-34 OECD 2000-2009 Projected Tertiary Type-A Degree attain OECD 2020 Projected Tertiary Type-A Degree Attain 25-34 OECD 2026 Financial Barriers to Higher Education In the United States • • • • Identification of financial barriers Measurement of financial barriers Consequences of financial barriers Proposals to address financial barriers Pell Grant Maximum Award • Increase to $13,000 • Half of any Pell Grant financed by 50:50 state match • Eliminates unmet financial need for students from low income families • Reduces need for excessive term-time student employment • Reduces education loan balance • Improves access to 4-year colleges and universities Super Pell Grant Award • Additional need-based grant beyond Pell Grant maximum award • Funded by federal government • Calculated by not zeroing-out negative values in EFC calculation (current practice) • Available to student for either: • Family support while in college, or • Reduce student work/loan obligation Contact Information: Download 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