Best Practices

College affordability is a greater challenge for students and families today than at any time in the past decade. College tuition and fee hikes averaging 10 percent in the public sector and 6 percent at private colleges are causing deep concern about how low- and middle-income families can pay for college.

This situation is exacerbated by stagnant family incomes and recent job losses. During the 1990s,
while public and private college tuitions increased by 38 percent, median family income grew by only
8 percent. While higher-income families saw their incomes keep pace with tuition increases over the
past decade, affordability has become a much greater problem for lower-income families. In 2002, public college prices amounted to 60 percent, and private college prices 160 percent, of the yearly income of low income families, according to the College Board.

Except for loans, financial aid has not kept pace with increasing college prices. The federal Advisory
Committee on Student Financial Assistance reports that low-income students at four-year public colleges face $3,800 in “unmet need” after loans, Federal Work- Study funds and family contributions.

Lower-income students also are more price-sensitive than middle- and upper-income students when making decisions about college. Tuition increases that are not offset by increases in need-based financial aid result in reduced enrollment of low-income students. Financial barriers prevent an estimated 48 percent of college-qualified, low-income high school graduates from attending a four-year college and 22 percent from attending any college within two years of graduation, according to the
Advisory Committee on Student Financial Assistance. Among those low-income students who do go to college, many encounter difficulties as a result of the financial pressures they face. Some work long hours and compromise their academic performance. Others borrow heavily and report feeling more burdened by their debt than do middle-income students. Ultimately, less than 10 percent of low-income students earn bachelor’s degrees by age 25, compared with more than 50 percent of upper income students, according to an analysis by Thomas G. Mortenson, an independent higher education analyst and senior scholar at the Pell Institute in Washington, D.C.

Many students who start college without sufficient resources see their college dreams become financial
nightmares. Recent interviews with nine graduates of Boston-area college outreach programs for low-income and first-generation students tell a sad story. Eight borrowed $4,000 or more a year, and would have accumulated $16,000 to $20,000 in debt by the time they graduated. Seven of the nine worked while in college. Five students had unmet need after the other aid they received, including loans and Work Study. This unmet need was covered by “credit” extended by the colleges (on top of the loans the students had taken).

Of the nine, four left college after their first year, all for financial reasons. They could not pay the outstanding balances they owed their colleges. They could not transfer to a lower-cost institution, thereby deferring their loans, because with an outstanding balance due, the colleges would not release their transcripts. Their student loans went into repayment within six months because they were no longer in school. Three of the four eventually defaulted on their student loans because they were not earning enough to make the payments. Starting, but not completing college, compromised these
students’ futures.

Student financial difficulties also negatively affect the standing of individual colleges. Because degree completion is among key criteria on which publications like U.S. News & World Report rank colleges, colleges with higher attrition rates get lower rankings. Dropouts default on student loans at higher rates than other students, so negatively impact college loan default rates, which, in turn, can jeopardize an institution’s eligibility for federal student aid. Dropouts also result in loss of the financial
investment that institutions make in students’ education beyond the costs students pay directly. Finally, dropouts require institutions to spend money bringing in new students to replace those who leave before graduating.

Five strategies to make college affordable
While reducing college costs and increasing student aid are the obvious ways of making college more
affordable, they are not options in times of severe fiscal constraints. Instead, policymakers and education leaders need to consider other alternatives.

The following options reduce college costs without substantial new resources.

1. Reduce the time it takes for students to earn a college degree. Expand opportunities for students to earn college credits while in high school through Advanced Placement (AP) courses. Federal funds are available through state departments of education to support school district efforts to expand AP offerings and improve the success rates of disadvantaged students on AP examinations. The College Board’s College Level Examination Program (CLEP) provides another option for students to earn college credits by examination. Originally designed for adults returning to school, high school students increasingly are taking CLEP exams as a way to reduce college costs.

Dual-enrollment programs such as Tech Prep provide another way for students to earn college credits while in high school, as do “early college high schools,” which allow students to earn up to two years
of college credit concurrently with completing their highs school graduation requirements. The state of Utah and Bard College have successfully piloted early college high schools, and the Bill & Melinda Gates Foundation is supporting a major initiative to create 70 additional schools nationwide.

Another option for reducing time to degree is to reduce the time that students spend taking non-graduation credit in early college years. Currently, nearly half of students who begin college must take remedial courses in order to develop basic skills that they did not develop in high school, according to research by U.S. Education Department analyst Clifford Adelman. This problem could be remedied by assessing students’ college readiness early in high school and aligning high school curricula with the first-year expectations of colleges. The College Board’s PSAT score reports provide individualized information regarding students’ academic preparedness for college that schools could use for
alignment purposes, but many do not. In addition, some community colleges, such as Cape Cod Community College, administer placement tests designed for freshmen to students in feeder high schools to give both students and teachers a concrete picture of where students need to develop skills in order to be ready for regular first-year college courses.

2. Provide families with better information and guidance before students enroll in college.
Honestly inform students and families about college affordability and how much of total college charges are likely to be covered by financial aid. Help families understand the negative impact on academic performance (and progress toward a degree) of working more than 15 hours a week while enrolled. Help students understand how borrowing can help them graduate faster and accrue the financial benefits of entering the educated workforce sooner. Explain to families the role of being well-prepared academically for college in helping students qualify for more financial aid and avoid remedial college courses, and the options for students to earn college credits before enrolling.

Working collaboratively, colleges and universities, state financial aid agencies and student loan organizations can design and communicate clear and consistent messages for students and families in their printed information, on web sites and through financial aid workshops and high school financial aid nights. High school counselors, TRIO and GEAR UP programs, and community organizations that help students plan for college also play an important role. Boston’s Higher Education Information Center and the Vermont Student Assistance Corp. are two examples of organizations working extensively on financial aid information issues with students and families.

3. Facilitate movement of students between lowercost and higher-cost colleges. Create policies and inter-institutional partnerships that encourage students to fill general education requirements at lower-cost public institutions and complete their majors at institutions, perhaps higher-cost, that offer the best academic program for their interests. This would reduce costs to students and families while preserving choice. The former director of a special admissions program at Emerson College helped students having problems with tuition make arrangements to spend several semesters at a community college completing their general education requirements. He advised students on which courses Emerson would accept for transfer and helped them transition from one institution to another. An additional example is the Rhode Island Baccalaureate Bound Program, in
which Community College of Rhode Island (CCRI) students enroll in special honors classes, participate in enrichment activities and receive personal assurance in transferring to one of 75 colleges and universities with which CCRI has agreements.

Making the transfer process less cumbersome and more transparent also would facilitate students attending several different institutions as a cost-saving measure. One approach is to guarantee students admission to a four-year college at the time they are admitted to a community college. Massachusetts public four-year colleges and universities provide a 33 percent tuition discount for Massachusetts community college students enrolled in a designated transfer program who earn 60 credits and a 3.0 grade point average (GPA).

4. Reward college readiness and college persistence. Provide pre-college incentives to encourage students to take a full complement of college-preparatory courses and earn a GPA of 2.5 or better. The Rhode Island Children’s Crusade offers last-dollar scholarships up to the amount of the in-state tuition at a Rhode Island public college to low-income students who sign a pledge to work hard in school, get good grades and attend a postsecondary program full-time within a year of graduating
high school. Provide differential aid to reward students who progress steadily toward degrees. Massachusetts awards a Performance Bonus Grant of $350 to $500 to state scholarship recipients enrolled in a Massachusetts postsecondary program full-time who have earned 24 college credits with a cumulative GPA of 3.0 or higher.

5. Integrate state financial aid policies and higher education financing policies to protect
low-income students from cost increases. Recent studies by Jane Wellman of the Washington, D.C.-based Institute for Higher Education Policy and others have shown that students who can least afford college do not receive the state support they need in part because student aid is managed as a supplemental, categorical program rather than being integrated with state higher education financing policies. These studies call for integrating tuition, appropriations and financial aid policies to maximize student participation and success. The Western Interstate Commission for Higher Education (WICHE) recently completed case studies describing the experiences of five states (Arizona, Connecticut, Florida, Missouri and Oregon) that have committed to making such changes. The case studies are available on
the Internet at www.wiche.org.

Evaluate policies regularly to determine their effectiveness in maintaining affordability for those students with the greatest financial need. Currently, evaluations of state aid are apt to be narrow accounts of fund use, rather than analyses of aid effectiveness in ensuring access and affordability.

Many innovative ways to help students overcome financial barriers to college do not require major infusions of new resources. Instead, some involve strengthening partnerships between high schools and higher education institutions and among public and private, two and four-year institutions. Others require reallocating resources, with funds targeting the same students in ways that increase incentives for academic achievement, college readiness and degree completion. Everyone has a stake in enabling students from all backgrounds to succeed in college.

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Ann Coles is senior vice president of The Education
Resources Institute (TERI) and director of the
Pathways to College Network, an alliance of 32 national
organizations and funders, including the U.S.
Department of Education, working together to improve
college access and success for underserved youth.