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In Short The price of a public college education has increased rapidly, in large part because of inadequate public funding. Promising free tuition would be a giveaway to the relatively wealthy. Str...

The idea that online learning might revolutionize higher education, lowering the cost of high-quality learning opportunities for students with limited access to traditional higher education, follows similar hopes for earlier technologies, including radio and television. If such a revolution is to come, it is still far from a reality. Strong evidence indicates that students with weak academic backgrounds and other risk factors struggle most in fully online courses, creating larger socioeconomic gaps in outcomes than those in traditional classroom environments. The central problem appears to be the lack of adequate personal interaction between students and instructors, as well as among students. Hybrid learning models do not exhibit the same problems and there is potential for online learning to develop strategies for overcoming these difficulties. Meanwhile, narrowing gaps in educational opportunities and outcomes requires considerable skilled human interaction.

Media anecdotes about individuals with student debt are unrepresentative and misleading. The general perception of a student debt “crisis” misses the reality that most education borrowing improves people’s lives by increasing educational opportunities. Higher-income people carry more student debt than lower-income people. However, specific groups of people and specific types of debt cause serious difficulties. Finding solutions to the very real problems requires pinpointing the problems, targeting the solutions, and recognizing the responsibilities of both borrowers and taxpayers.

The general perception of a student debt “crisis” misses the reality that most education borrowing improves people’s lives by increasing educational opportunities. Higher income people carry more student debt than lower income people. However, specific groups of people and specific types of debt cause serious difficulties. Default rates are disturbingly high, but the biggest problems are among students who do not complete their programs and among those who attended for-profit institutions. Finding solutions to the very real problems requires pinpointing the problems, targeting the solutions, and recognizing the responsibilities of both borrowers and taxpayers. The most important strategy for ameliorating student debt problems is preventing people from borrowing for programs they are unlikely to complete and institutions that won’t serve them well. Major steps for dealing with existing debt include an improved income-driven payment system that appropriately supports borrowers while expecting most t...

Thirteen percent of adults in the United States ages 25 and older hold advanced degrees — master’s, doctoral or professional degrees. The first brief in this series reported that bachelor’s degree recipients from low-income households are less likely than other graduates to pursue advanced degrees and are less likely than students from more affluent backgrounds to complete them. High tuition prices and living expenses may provide one explanation for these unequal outcomes. This brief examines how students finance their graduate and professional education. It summarizes the sources of funds used to cover the tuition and fees universities charge, as well as living expenses. Institutions set a “cost of attendance” (COA) for students, estimating the average budget for one academic year (fall through spring). COA includes tuition and fees, books and supplies, room and board, transportation, and other living expenses, and it establishes the maximum amount students can borrow in federal student loans to attend a particular school. These official budgets serve as the foundation for the discussion that follows about how graduate and professional degree students pay for their education. It is critical to understand that COA is subjective. Since most graduate students do not live in campus housing, actual living expenses depend on local prices for food and housing, as well as the lifestyle choices students make. As the data below reveal, the budgets institutions set for graduate and professional students are frequently quite generous relative to budgets set for undergraduate students and living standards set by the federal government. Many students use earnings from employment and federal loans to fund their graduate and professional education. But financing patterns differ a great deal across and within types of programs. This brief explores these patterns by describing average budgets for graduate and professional degree students and the funding sources used to cover these budgets.

Although concerns about student debt most often focus on undergraduate students, borrowing rates and average debt are higher among graduate and professional degree students than undergraduates. Their high levels of debt contribute significantly to aggregate student debt. Policy solutions focusing only on undergraduates cannot appropriately address the issues of student debt in the United States. Moreover, examination of borrowing patterns among students pursuing advanced degrees can help identify barriers to enrollment in these programs as well as potential repayment problems. There is wide variation in how students cover tuition and living expenses while they pursue graduate and professional degrees. As reported in the third brief in this series, The Price of Graduate and Professional School: How Much Students Pay, most research doctoral degree students attending public and private nonprofit schools benefit from generous institutional fellowships and assistant ships that cover a significant portion of their expenses. But master’s degree students in all sectors cover most of their expenses with earnings from employment and federal student loans. Borrowing is particularly important for professional degree students, most of whom have neither earnings from employment during the academic year nor grants and fellowships to cover tuition and living expenses while they are enrolled. This brief reviews borrowing patterns and trends among advanced degree students, disaggregating by demographic characteristics as well as type of program and institutional sector.

Differences in data sources, definitions, and concepts affect the answers to key attainment and completion questions: how students with different characteristics fare, how well individual instituti...

Like tuition and fees for undergraduate students, prices for graduate and professional study have risen rapidly over time. But average published prices tell us little about how much students actually pay. Despite high sticker prices, many students enrolled in research doctoral degree programs pay no tuition and fees because institutional grant aid, fellowships and tuition waivers cover these charges. Master’s degree students and those in professional practice degree programs are much less likely to receive this assistance. In 2011–12, one-third of full-time graduate and professional degree students received grant aid from their institutions. This included 71 percent of research doctoral students, compared with 38 percent of master’s and 42 percent of professional degree students. After an overview of how graduate school prices have changed over time, this brief provides detailed information on published and net prices for students continuing their education beyond a bachelor’s degree.

The main purpose of federal student loans is to solve cash flow problems, not to pay part of the cost of education. Grant aid is the best way to provide subsidies to disadvantaged students. But some borrowers need help paying back their loans because their education does not pay off as well as anticipated. Measures of the amounts individual students borrow are generally more meaningful than the total amount of debt outstanding and there is quite a bit of variation in the borrowing patterns of different students. For example, older students and graduate students tend to carry more debt than others. Default rates are disturbingly high, but the biggest problems are among students who do not complete their programs and among those who attended for-profit institutions.

The most important strategy for ameliorating student debt problems is preventing people from borrowing for programs they are unlikely to complete and institutions that won’t serve them well. There should also be stricter limits on borrowing for graduate students, parents, and some undergraduates. Major steps for dealing with existing debt include an improved income-driven payment system that appropriately supports borrowers while expecting most to repay their debts in full and improving the structures surrounding the repayment and collection processes—but not forgiving all or most debt. Other promising policy changes include easing the restrictions on discharging student debt in bankruptcy, eliminating the privileged category of private student loans, and making it easier for students to borrow less than the maximum allowed.

Over the past year, we have discussed college prices, college quality, and student financial aid with elected officials and staff from several state legislatures, financial aid administrators from ...

(2007). It's Time for Serious Reform of the Student-Aid System. Change: The Magazine of Higher Learning: Vol. 39, No. 2, pp. 15-20.

Historically, the primary role of financial aid was to increase educational opportunities for those with inadequate resources. In recent years, however, as institutions have come to view financial aid as a tool for crafting entering classes and increasing financial stability, a growing percentage of institutional aid is based on criteria unrelated to financial need. Political forces have led to state grant policies designed to subsidize academically successful youth. Federal subsidies, increasingly funded through the tax system, are less focused on those with the greatest financial need. In this era, middle- and upperincome families are fighting for a larger and larger share of the limited funds available to help students pay for college, and families view financial aid as a bargaining chip. This reality reinforces the institutional tendency to redirect dollars from the mission of improving access to higher education to the goal of outpacing the competition in the race to recruit the best, the brightest, and the most likely to contribute to the capital campaign. Each postsecondary institution has its own story, strengths, and vulnerabilities. The few colleges and universities with a large endowment and the luxury of pursuing the idealistic goals of their mission statement while increasing their financial strength can vigorously pursue an equity agenda. The many institutions with fewer resources and a more socioeconomically diverse student body have fewer options. Experiencing financial strain and struggling to maintain enrollment levels, they are searching for more

This overview of postsecondary education in the United States reviews the dramatic changes over the past fifty years in the students who go to college, the institutions that produce higher education, and the ways it is financed. The article, by Sandy Baum, Charles Kurose, and Michael McPherson, creates the context for the articles that follow on timely issues facing the higher education community and policy makers. The authors begin by observing that even the meaning of college has changed. The term that once referred primarily to a four-year period of academic study now applies to virtually any postsecondary study—academic or occupational, public or private, two-year or four-year—that can result in a certificate or degree. They survey the factors underlying the expansion of postsecondary school enrollments; the substantial increases in female, minority, disadvantaged, and older students; the development of public community colleges; and the rise of for-profit colleges. They discuss the changing ways in which federal and state governments help students and schools defray the costs of higher education as well as more recent budget tensions that are now reducing state support to public colleges. And they review the forces that have contributed to the costs of producing higher education and thus rising tuitions. The authors also cite evidence on broad measures of college persistence and outcomes, including low completion rates at community and for-profit colleges, the increasing need for remedial education for poorly prepared high school students, and a growing gap between the earnings of those with a bachelor’s degree and those with less education. They disagree with critics who say that investments in higher education, particularly for students at the margin, no longer pay off. A sustained investment in effective education at all levels is vital to the nation’s future, they argue. But they caution that the American public no longer seems willing to pay more for more students to get more education. They therefore urge the higher education community to make every effort to find innovations, including creative uses of information technology, that can hold down costs while producing quality education.

The increasing role that immigrants and their children, especially those from Latin America, are playing in American society, Sandy Baum and Stella Flores argue, makes it essential that as many young newcomers as possible enroll and succeed in postsecondary education. Immigrant youths from some countries find the doors to the nation's colleges wide open. But other groups, such as those from Latin America, Laos, and Cambodia, often fail to get a postsecondary education. Immigration status itself is not a hindrance. The characteristics of the immigrants, such as their country of origin, race, and parental socioeconomic status, in addition to the communities, schools, and legal barriers that greet them in the United States, explain most of that variation. Postsecondary attainment rates of young people who come from low-income households and, regardless of income or immigration status, whose parents have no college experience are low across the board. Exacerbating the financial constraints is the reality that low-income students and those whose parents have little education are frequently ill prepared academically to succeed in college. The sharp rise in demand for skilled labor over the past few decades has made it more urgent than ever to provide access to postsecondary education for all. And policy solutions, say the authors, require researchers to better understand the differences among immigrant groups. Removing barriers to education and to employment opportunities for undocumented students poses political, not conceptual, problems. Providing adequate funding for postsecondary education through low tuition and grant aid is also straightforward, if not easy to accomplish. Assuring that Mexican immigrants and others who grow up in low-income communities have the opportunity to prepare themselves academically for college is more challenging. Policies to improve the elementary and secondary school experiences of all children are key to improving the postsecondary success of all.

The evolution of higher education from a privilege for the elite to an economic and social necessity for broad segments of the population has created financing challenges, along with new opportunities, for students and their families. Governments that were able to provide free or low-priced access to universities for the select few have found it necessary to charge rising levels of tuition, even as less-affluent citizens aspire to enroll. In a number of countries—including Canada, Chile, and England—students have taken to the streets to protest tuition policies. Students are less militant in the United States; but there, as elsewhere, rising college prices and stagnating incomes have led to the widespread perception that postsecondary education is “unaffordable” for more and more people.Yet, it is not obvious what “unaffordable” means. What price is relevant—the published price of postsecondary study, the price people actually pay, or the price people should be expected to pay? Efforts to increase educational opportunity can be hindered if policymakers do not have a clear idea of the meaning of an “affordable” or “unaffordable” education.